CFPB Project Catalyst Study Finds Savings Offers Double the Number of Consumers Saving
October 03, 2016 / Source: CFPB
Project Also Finds Savings Persist After Offers End
September, 29, 2016, the Consumer Financial Protection Bureau (CFPB) released the results of a Project Catalyst research project finding that offering a small incentive to prepaid card users to put some of their money into a savings “wallet” doubled uptake of the wallet. The study also found that the consumers who chose to save using the wallet continued to save after the pilot ended. And it found that participants who were offered an incentive to open the savings wallet reported significantly less payday loan use than those who were not offered the incentive.
“Promoting savings among consumers is an important goal for the Consumer Bureau. This Project Catalyst research shows that encouraging and enabling users of prepaid cards to set aside funds can help people reach their short-term financial goals,” said CFPB Director Richard Cordray. “Importantly, it also shows that consumers who are encouraged to save can reduce their use of payday loans.”
A summary of the research is available at: http://www.consumerfinance.gov/data-research/research-reports/tools-saving-using-prepaid-accounts-set-aside-funds/
The Dodd-Frank Wall Street Reform and Consumer Protection Act mandates that the CFPB provide assistance regarding the offering of financial services to underserved populations and conduct research on the experiences of such consumers in the financial marketplace. Across all incomes, consumers report a desire to save more than they actually do. But many consumers, especially those who are low income, may not have savings accounts. These consumers often must instead rely on a single checking or prepaid account for both day-to-day expenses as well as saving, which can make it challenging to develop regular saving habits.