WASHINGTON — Consumer Financial Protection Bureau Director Richard Cordray is pushing businesses to implement stronger financial education offerings in the workplace.
Speaking at the Clinton Global Initiative Conference in Chicago on Friday, Cordray said employers "play a critical role" in strengthening consumers' financial capability. He made a handful of suggestions that employees could implement, such as broadening direct deposit options for employees so they allocate paychecks across various savings and investment accounts.
"Many employers already enroll their employees automatically in retirement accounts, but they could move toward a higher percentage of pay as the auto-enrollment default choice to encourage more retirement savings," Cordray said in prepared remarks. "Employers could also provide options — including default options — that automatically increase the amount contributed to retirement plans over time, as pay increases."
The agency has most recently been pushing for stronger financial education systems in schools. But Cordray noted in his speech that the responsibility also rests with businesses. He noted a recent survey by PricewaterhouseCoopers that found more than half of workers say they are financially distressed and one-third admitted they spent time in the office worrying about money.
"That distress negatively affects their work. It reduces their productivity and distracts from their focus and commitment to the job," he said. "It increases their absenteeism and undermines their health."
Cordray said he also wanted to see more companies offer financial education benefits and savings options as well as be "much more conscious" in making sure employees are aware of such programs.
"Employers offering financial education and savings programs should organize them in one central location so that employees know where to turn to access resources and assistance," he said. "Employers with an open enrollment season for choosing insurance benefits could use that time to promote their financial education and savings programs as well."
Cordray said internally that the CFPB launched a program this year focused on financial "best practices" for employees based on their own research. This includes in-office seminars on topics like retirement savings and financial wellness. He offered to share their own practices with employers at the conference.
"If you leave this conference committed to implementing some or all of the various options we have discussed, you will make a positive difference for your workforce," he said. "And if we take on these issues together, then we can make important strides for the future of this country."