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- op ed
'Making Libraries Community Hubs for Financial Education'
But I think we also need to share something else: not just the substance of this goal, but a sense of its urgency. We have just suffered through the most serious financial crisis of our lifetimes – the most dislocating economic event in this country since the Great Depression. Families lost trillions of dollars in household wealth; many lost their homes and their life savings. We are slowly recovering, but the harm has been deep and broad, and its effects on social and economic behavior may well be lasting. People have been shaken in their deeply held belief that if they work hard and behave responsibly, they will get ahead in life and pass on a higher standard of living to their children.
Out of this crisis, lessons must be learned and changes must be made. To begin with, we need to make sure that consumer financial markets are not rigged against people. At the Consumer Financial Protection Bureau, we are intent on making those markets work better by providing reasonable rules, consistent oversight, and evenhanded enforcement of the law. People expect and deserve to be treated fairly, so we are aiming to ensure that disclosures are transparent, that products are devoid of predatory features, and that marketing is not deceptive or misleading. If we do our work well, then consumers should be enabled to navigate the financial marketplace more easily and to exert more effective control over their economic futures.
But it is also fundamental that consumers need to be able to protect themselves – to avoid problems in the first place and know what to do when they do experience a problem. Our new agency is uniquely positioned to help bridge the widening gap between people’s actual financial capability and the increasingly complex financial decisions they have to make. In order to do that, we must consciously devote ourselves to the crucial importance of financial education in our society. At present, we do very little – if anything at all – to equip Americans to fight through the complexity and make sound and sensible decisions. In fact, at the Consumer Bureau we now hear every day from people who lament the choices they made, often expressing anguished regret that they did not know more about the risks involved at the time they made key financial decisions.
So today we are announcing an important partnership to help us achieve this goal of a more financially educated public. Together with several national partners and help from nine library systems across the country, we are beginning a pilot project to make our already trusted libraries into neighborhood centers of financial education.
Libraries already play an important role in communities across the United States. They are great centers of learning. They are repositories of information that give every citizen equal access to their resources. They are community spaces and welcoming places of safety.
Like many of you, I have loved libraries all my life. I can still recall the excitement I felt going into the library as a young boy and discovering books I had never heard of before: Tom Swift and his marvelous scientific inventions; Homer Price and his runaway doughnut machine; and eventually classics like Ivanhoe and the Three Musketeers. I also remember the thrill I had in third grade when doing well in class meant that we were allowed to go down to the school library and read anything we wanted for the class period. Was I a nerd? It sure sounds like it, doesn’t it? But the odd combination of peacefulness and adventure that I found in the library has always been a special sanctuary for me.
When I was a student at Oxford University in England, my classmates and I felt our continuity with students over many centuries as we ordered books out of a folio index to be delivered to a designated desk in one of the reading rooms, sitting where perhaps John Locke or William Gladstone once sat. We were not permitted to check out any of the books or articles we were advised to read, and we took the age-old oath not to kindle flame or fire in the library, though in my day the oath had been translated from the original Latin. Now I am pleased to see that my children love the library too, though my wife actually loves it most of all. We are proud to have award-winning libraries in Ohio, including the Columbus Metropolitan Library, which is one of the partners we are announcing today.
So we owe a deep debt of gratitude to Benjamin Franklin, whose fertile mind first conceived the idea of a subscription library. But libraries have changed enormously over the years, with some of the greatest changes occurring just since I first started visiting them. They are no longer just about books and other paper-and-ink materials. They are digital and video and audio. They are about trusted resources for career development. They serve families, offer free Internet, and provide skill-building programs and community referrals. According to the Institute of Museum and Library Services, in 2010 our libraries served nearly 298 million Americans – which means that they achieved virtually total penetration of our population.
As Lady Bird Johnson described it, “Perhaps no place in any community is so totally democratic as the town library. The only entrance requirement is interest.” And she did not mean the financial kind.
Our public libraries have also been affected by hard economic times. Declining budgets, less operating revenue, fewer service hours, and cuts to staffing have hit many libraries quite hard. But hard times change habits for library customers too, which means that visits and participation in library programs across the country are actually up, despite all these woes.
Another study tells us that one-quarter of all computer users at public libraries log on either for commercial needs or to manage their financial affairs. So we already know that many people are going to their libraries to find out important information about personal finances. But librarians are not necessarily skilled when it comes to financial literacy. That is not what they were trained for, and they may not feel comfortable dealing with these issues. In order to fill that role, our libraries need help in identifying unbiased and accurate materials. They need help in identifying reliable community partners who can help them establish, host, and present programs. And libraries need resources to help them advertise financial education programs, both to regular patrons inside the library, and to citizens who may not yet be coming to the library.
Our Community Financial Education Project that we are announcing today is a partnership with other federal agencies like the Institute of Museum and Library Services, the Federal Deposit Insurance Corporation, the Federal Reserve Bank of Chicago and the USDA’s Cooperative Extension System, as well as other national organizations like the FINRA Investor Education Foundation, the American Library Association, and local public libraries across the country.
The first nine of these libraries have helped us identify their needs, and the possibilities, and they have helped us shape the strategies we are now beginning to implement. They include libraries literally “from sea to shining sea” – from Brooklyn to San Francisco and places in between: Fresno, California; Orlando, Florida; Georgetown, South Carolina; Florence, South Carolina; Pelham, Alabama; the Menominee Nation in Wisconsin; and (again) my own stomping grounds of Columbus, Ohio.
Our goal is to provide librarians with a collection of financial education resources and tools. We want to help libraries identify and connect with local partners in their communities. We want to help them build an online community for local financial education librarians. And we want to be able to provide helpful trainings for library staff and managers. As part of these efforts, we will conduct online trainings. And we will continue to visit libraries across the country for in-person trainings.
Through this partnership, we hope to gain more foot soldiers on the ground with the ability and the commitment to talk with people, learn about their needs, and help them become better consumers. We want Americans to have the tools and resources available to them so that they can be financially capable and develop the self-reliance to look out for themselves.
We also want the libraries, librarians, and their patrons to help us develop the best consumer education materials possible. Some of that will be original content from the Consumer Bureau or one of our partners, but we can also identify and recommend some of the excellent resources that have been developed elsewhere. We view this project as helping us learn more from consumers about how they feel themselves to be best served as they are seeking to learn more about financial matters.
We believe it is an uncanny fit for libraries to be the key community resource for helping people master their personal financial issues. We envision a United States where libraries are one of the trusted sources that people turn to in order to find information about how to take out a responsible mortgage. Or they may turn to their local library to learn what things they should be considering as they seek to finance higher education through student loans. Or they may go to their library to get tips on how to manage their credit card debt. We want consumers to feel comfortable walking into a library and asking their librarian where they can find basic information about budgeting, savings, investments, and credit.
And we want librarians to feel comfortable pointing them in the right direction, as they already do for so many Americans on so many topics every day. Our partnership will put them in position to provide people with unbiased, easy-to-understand, plain language help. Maybe they will point the consumer to our website with our “Ask CFPB” resource, which is a database of over a thousand expert answers to commonly asked questions about consumer finance. Or maybe they will point the consumer to some portion of the FDIC’s renowned MoneySmart curriculum. Or maybe they will point the consumer to FINRA’s advice for avoiding investment fraud or some other book or pamphlet that has been demonstrated to be reliable and trustworthy. Whatever the source, consumers need to be able to count on being able to get the kind of quality information they are looking for.
The FINRA Investor Education Foundation and the American Library Association broke ground in this space back in 2007 with their “Smart Investing at Your Library” grant program. We now will join this effort to build on the foundations they laid. MoneySmart Week, led by the Chicago Fed, has also encouraged hundreds of libraries to participate in their annual campaign. But we have thousands more libraries across the country that do not offer any financial education at all. So today’s pilot project is just the beginning, and we foresee rapid expansion to any and all libraries interested in joining with us to strengthen the financial foundation for all Americans.
In closing, let me note that April is Financial Literacy Month and this week is MoneySmart Week. This is the perfect time for both the libraries joining us today, as well as all others who may be interested in joining up in the next round, to consider what is at stake with this initiative.
The United States cannot continue to miss the mark on the importance of financial education. Other developed countries around the world – including Australia and the United Kingdom, most recently – now require such instruction in their schools. We cannot afford to fall behind, and to fail our young people, in this truly fundamental respect. Indeed, we should be ashamed to do so. Our democratic system rests on the effective operation of a free market economy. This societal arrangement demands strong and effective consumers.
Just as each citizen is entitled to vote and to participate equally in our civic life, each is also expected and required to manage his or her own financial affairs. From the time we become adults, each of us is on our own and responsible for the choices we make. The freedom and liberty that we cherish to direct our lives depends on being able to manage the ways and means of our lives. And so we must arm our fellow citizens with the wherewithal to stand on their own two feet and make sustainable economic choices. We have built the greatest system of economic liberty in the history of mankind, but it will only endure if we are willing to take the necessary steps to strengthen that system from the bottom up, starting with the individual.
By working in coordination with all those who are dedicated to achieving these goals, we can bolster financial capability in this country. We are glad to join with you to do that. Thank you.
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The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.