For Richard Cordray, the equation is simple: In the Land of the Free and the home of the free market, American citizens should be as informed about and capable of self-governance in their personal finances as they are in the democratic process, especially when it comes to borrowing for a mortgage.
In a speech Tuesday before the federal Financial Literacy and Education Commission, Cordray, the director of the U.S. Consumer Financial Protection Bureau (CFPB), urged the need for American businesses to teach employees the importance of saving and making more sound financial decisions when it comes to major investments, such as buying a home.
Cordray called upon business owners and managers to leverage such milestone moments in their employees' lives to teach specific skills they will need in order to make good decisions for their future.
Cordray's speech is the latest effort in a growing trend to help American citizens better understand what it means to borrow money to buy a home. Cordray said the lack of good consumer education was a key factor in the wave of foreclosures since the Great Recession started squeezing American throats five years ago.
He added that the CFPB fields daily calls from distressed homeowners watching their version of the American dream erode due to the poor decisions they've come to regret making.
Cordray's challenge to American businesses builds on a January 27 report he made to the House Committee on Financial Services. In that speech, Cordray compared what he called "troubling similarities" between the student loan crisis plaguing young people and "the broken mortgage market before the crisis."
The troubling similarities include borrowers who took out loans with much worse rates than they could have qualified for and the disastrous consequences of not knowing what kinds of questions to ask in order to secure more favorable loans.
Not all news from the CFPB camp is grim, however. Cordray said last month that the bureau's efforts to educate Americans about the risks and consequences of their financial endeavors has yielded much fruit in the past two years. As more citizens become aware of the bureau's education programs and consumer tools, he said, the more they have righted their troubled ships.
Still, Cordray says, there is much uneasy water to traverse. He called upon U.S. employers Tuesday to help employees understand and diversify their personal savings and to increase information about major financial decisions as well as increase access to information regarding employee retirement and benefits programs.
Only when the finances of American workers are in order, he said, are homebuyers in a true position to understand what getting a mortgage is all about.