Established by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the CFPB’s mission to “protect consumers from unfair, deceptive, or abusive practices and [to] take action against companies that break the law” has garnered some political controversy and may quite possibly be amended. To date, the CFPB has worked with more than 31 million consumers, recovering $12.4 billion in relief through their enforcement actions and has handled over 1.5 million complaints. However, in its present state, the CFPB also serves to “arm people with the information, steps, and tools that they need to make smart financial decisions”. This is something many consumers, including veterans, rely on.
One of the ways this bureau accomplishes this is through the CFPB Financial Coaching Initiative launched in May of 2015. This program has 60 certified financial coaches, 38 dedicated to serving veterans and 22 who serve both the veteran and civilian populations nationwide. This initiative has assisted over 170 RRRP clients since we began working with them in 2016. This initiative focuses largely on financial planning, literacy and credit repair. The referral process is seamless, the coaches are knowledgeable and responsive, and our clients are usually very satisfied with the services they are receiving.
CFPB Financial Coaches tailor their approach depending on the unique needs and strengths of each client. Financial coaching through CFPB focuses on the priorities and strengths of each consumer they work with, with the goal of making progress in the most important aspects of their financial life. By emphasizing behavior change, this financial coaching program is distinguished from other financial education approaches.
Financial coaching through this initiative has proven to lead to gains in three key areas: financial behaviors; objective financial health (savings, debt levels and credit score); and subjective feelings of financial confidence and financial well-being. A study evaluating the impacts and implementation approaches of various financial coaching programs conducted by the Urban Institute under contract with the CFPB showed that on average, people offered access to CFPB style of financial coaching, relative to those not offered access to financial coaching:
- Were more likely to pay bills on time and increased frequency of savings deposits.
- Increased savings by almost $1,200.
- Reduced debt by over $10,000.
- Increased credit scores by 21 points.
- Reported an increased sense of confidence in their finances and reduced feelings of financial stress.
Overall, Urban Institute found that people with access to coaching did better than those without. Those who met with a coach even once improved their money management skills and saw meaningful gains on a range of financial outcomes. No matter where one stands on the ideological split regarding what the Consumer Financial Protection Bureau role is, I hope that it is easy to see that many of the initiatives and services championed by the CFPB are essential in empowering individuals, civilians and veterans alike, to achieve sustainable, long term financial stability.