CFPB Announces Research Pilot on Consumer Saving; American Express to Assist

The Consumer Financial Protection Bureau (CFPB) announced Friday a Project Catalyst research pilot to analyze the effectiveness of certain practices designed to encourage positive saving habits. The research will focus on saving behavior among low- and moderate-income prepaid card users who often do not have access to traditional savings accounts and who may face unique challenges building regular saving habits.

“Developing saving habits can help people reach their short-term and long-term financial goals,” said CFPB Director Richard Cordray. “This project can help us better understand how to promote saving among consumers, especially those who may be low-income and economically vulnerable.”

The Dodd-Frank Wall Street Reform and Consumer Protection Act mandates that the CFPB work to empower consumers to make better informed financial decisions. As part of this effort, promoting saving among consumers has been a focus for the CFPB.

As part of the CFPB’s Project Catalyst initiative, American Express has agreed to share insights with the Bureau from its trial program focused on encouraging saving among certain prepaid card users. Through its program, American Express is evaluating the effectiveness of a product feature that allows prepaid card users to set money aside in a savings “wallet” that is separate from funds used for regular transactions. The information shared by American Express will be de-identified, and appropriate precautions will be taken to ensure that individual consumers cannot be identified through the data.

Over the past three years the Bureau has launched a series of initiatives focused on empowering consumers with resources and tools to help increase their financial capability and to build savings. These efforts include Your Money Your Goals, a nationwide effort to provide financial education and tools to low-income consumers. It also includes CFPB’s Ready? Set. Save! initiative to promote tax-time savings among low-to-moderate income consumers and raise awareness about their options for saving a portion of their tax refund.

The Bureau’s Project Catalyst initiative is designed to encourage consumer-friendly developments in markets for consumer financial products and services. The Bureau views this initiative as an important means of fulfilling its mandate under the Dodd-Frank Wall Street Reform and Consumer Protection Act to provide all consumers access to fair, transparent, competitive, and innovative markets.

More information about Project Catalyst will be available at: http://www.consumerfinance.gov/projectcatalyst

A summary of the research pilot will be available at: http://files.consumerfinance.gov/f/201412_cfpb_project-catalyst-announcement.pdf