Mike Staten isn’t exaggerating when he mentions his lifetime of knowledge about consumer finance issues in the United States.
As a Ph.D. student and economics professor, Staten witnessed the “stagflation” period of the late 1970s, the “Black Monday” stock market crash of 1987, the dotcom bubble/burst era of the late 1990s, and the subprime mortgage crisis and recession in 2007-08, and studied their effects on individuals and families.
Staten, Bart Cardon Associate Dean for Career and Academic Services in the College of Agriculture and Life Sciences, has been appointed to a two-year term on the federal Consumer Financial Protection Bureau’s Academic Research Council, where he will use his depth of experience to advise the CFPB on what consumer finance questions it should be researching as it regulates the consumer financial services industry.
Staten will be one of seven members of the Council, joining research faculty from Indiana University, the University of Michigan, Cornell University, George Washington University, Mississippi State University, and George Mason University.
“I’m honored to have been appointed to the Committee at this stage of my career,” Staten said. “I view this as a capstone experience that allows me to reach back over almost 40 years of work in the field to provide them a long perspective on the industry and the effects of both regulation of products and consumer education.”
CFPB created to protect consumers
The Washington, D.C.-based CFPB, formed in 2011 after passage of the Dodd-Frank Act, is an independent bureau that serves as the primary federal regulator of the $20 trillion consumer finance industry. The CFPB provides oversight, supervision, and enforcement for financial institutions such as banks, credit unions, and finance companies, as well as credit reporting firms, student loan companies, and all debt collection activities.
The creation of the CFPB consolidated federal regulation of consumer financial transactions that had formerly been spread across more than a half dozen agencies like the Federal Reserve Board and the Federal Trade Commission into a single agency focused on promoting fairness and transparency and preventing consumer abuse in financial transactions.
“Basically, any transaction that has to do with deposit accounts and lending (in the United States) is squarely in their purview,” Staten said. “They’re the primary regulator now, although the public is generally unfamiliar with them. But the financial services industry takes them very seriously. The CFPB would like the public to learn more about them because they provide a wide array of consumer financial education tools and advice on topics such as mortgage transactions, student loans, and saving for college.”
Staten said another important service created by the CFPB is a hotline for reporting complaints about experiences with financial institutions regarding just about any financial transaction. More than 600,000 consumer complaints have been logged in the CFPB Consumer Complaint Database since it launched in 2012.
“Financial institutions closely monitor any mention of their company in the CFPB Complaint Database, because they know the agency will use this feedback to launch investigations when there appears to be repeated abuse,” he added.
Playing ‘critical role’ in monitoring credit industry
Staten and his colleagues on the Academic Research Council will play an influential advisory role just as the global economy begins taking steps toward recovery from the COVID pandemic. Staten admits it’s almost impossible to know what the big picture is going to look like in a post-COVID economy, which will amplify the CFPB’s role as a watchdog and protector of average consumers.
“We’re still wondering what the economic fallout is going to look like from this,” he said. “We’ve had a reprieve in this country from some of the damage over the summer and fall because of the early stimulus package, but a lot of that financial assistance to workers and small businesses has already ended. We are seeing regular reports now of more layoffs, massive for some industries like travel and hospitality. So the economic hardship on consumers is far from over. The CFPB is playing a critical role in monitoring the credit industry and the way that temporary forbearance programs for credit card and mortgage payments are being conducted. Credit scores have not yet reflected the economic damage that’s been under the radar. Managing a return to normalcy will be a primary task of the bureau for the next year.”
Helping students develop financial literacy
Staten arrived at the University of Arizona in late 2007 after two decades of public policy research on consumer and mortgage credit markets, first at Purdue University and later in Washington D.C. at Georgetown University and George Washington University. He served as director of the Take Charge America Institute in the CALS Norton School of Family and Consumer Sciences from 2007-16, developing and scaling up financial education programs, including the award-winning Take Charge Today personal finance curriculum for high school and middle school classrooms.
“During my first year here at UArizona, the mortgage crisis unfolded nationally, with Arizona at ground zero for the foreclosure meltdown that followed,” he said. “Retail financial service stories were in the headlines nearly every day. Two things were clear to me: First, the meltdown in the subprime mortgage market and subsequent severe recession constituted an enormous teachable moment for improving financial literacy, especially among young people and young adults. Second, our students in the Norton School needed to know more about the retail financial services industry as well as financial planning – and were actually hungry to do so. Over the next decade we ended up building programs to tackle all of this.”
Overseeing CALS academics growth
In his current role at CALS, Staten is responsible for all academic programs for 3,600 students in the college, across 18 undergraduate degrees in 10 academic departments, as well as more than 40 graduate degree and certificate programs. One of those undergraduate degree programs is a new degree in Personal and Family Financial Planning, launched by the Norton School in 2018.
“We take very seriously what economists like to refer to as our ‘implicit contract’ with admitted students that we’ll partner with them to get them to and through graduation and prepared to launch into successful careers,” Staten said.
Four years ago, Staten’s team in Career and Academic Services embarked on a recruiting and marketing campaign that highlighted the Bachelor of Science focus on all of the undergraduate degrees in the college.
“The objective was to more effectively tell our ‘We Put Science to Work’ story to inspire our student prospects about the broad range of career paths accessible through our applied degrees,” he said. “Since then, we have increased student credit hours taught by the college by 22 percent and increased the size of our entering class (freshmen and transfers) by 14 percent. We are also laser-focused on undergraduate student retention and graduation rates, and our numbers inside CALS are at or significantly above the UA averages in both areas.”