To establish the Financial Literacy Commission, and for other purposes.

July 31 (legislative day, JULY 21), 2003

Ms. STABENOW (for herself, Mr. ENZI, Mr. JOHNSON, Mr. HAGEL, Mr. SCHUMER, Mr. BAYH, Mr. CARPER, and Mr. CORZINE) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs

To establish the Financial Literacy Commission, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Financial Literacy Community Outreach Act'.

SEC. 2. FINDINGS.

Congress finds that--

(1) although the evolution of our financial system has offered families in the United States many new opportunities to build wealth and security, the ready availability of credit, an overwhelming array of investment and savings options, and the shifting of responsibility for retirement savings from employer to employee has made the understanding of personal finance ever more important;

(2) many young adults within the United States have demonstrated difficulty understanding basic financial concepts;

(3) in surveys of high school seniors conducted by the JumpStart Coalition for Personal Financial Literacy--

(A) in 1997 participants, on average, failed, and answered only 57 percent of the questions correctly;

(B) in 2000, the average score fell to 51 percent; and

(C) in 2002, disturbingly, on average, only 50 percent of the questions were answered correctly;

(4) in a survey of consumers 18 years and older conducted by the American Association of Retired Persons in late 1998, only 11 percent of respondents correctly answered 4 basic financial questions;

(5) a similar survey of 800 defined benefit contribution plan participants conducted by John Hancock in 2002 found that 50 percent of respondents said they spend half an hour or less per month managing their retirement funds;

(6) households in the United States are not reaching their full potential in financial management, and as a result--

(A) the personal savings rate fell to only 1.6 percent of disposable income in 2001;

(B) from 1990 to 2000, outstanding credit card debt among households more than tripled from $200,000,000,000 to $600,000,000,000;

(C) in 2001, the total household debt exceeded total household disposable income by nearly 10 percent;

(D) less than half of all households hold stock in any form, including mutual funds and 401(k)-style pension plans; and

(E) almost half of all workers have accumulated less than $50,000 for their retirement, and 1/3 have saved less than $10,000;

(7) many Government agencies recognize that the people of the United States lack expertise in financial literacy and are working to help them, including efforts by--

(A) the Department of Labor and the Federal Deposit Insurance Corporation, which have joined together to create `Money Smart', a training program to help adults enhance their money-management skills;

(B) the Department of the Treasury, which has formed the `Financial Services Education Council', and has published a guide called `Helping People in Your Community Understand Basic Financial Services';

(C) the Department of the Treasury in promoting a middle school curriculum called `Money Math: Lessons for Life';

(D) the Federal Trade Commission, which publishes information about credit, including `Credit Matters: How to qualify for credit, keep a good credit history, and protect your credit';

(E) the Department of Agriculture, which runs the `Family Economics Program' to assist educators who deliver basic consumer education and teach personal financial management skills to young people;

(F) the Securities and Exchange Commission, which has an Office of Investor Education and Assistance;

(G) the Board of Governors of the Federal Reserve System, which has developed materials explaining how to use credit responsibly, obtain a mortgage, build wealth, and lease a car;

(H) the Department of Housing and Urban Development in funding housing counseling agencies nationwide that provide advice on how to save for and buy a home; and

(I) the Government Services Administration in hosting the Federal Consumer Information Center, which has an electronic catalogue of information about Federal financial literacy programs;

(8) there is very little coordination among Federal programs, resulting in duplication of effort and a confusing array of information spread among many agencies;

(9) there is a serious problem with financial illiteracy among many low-income consumers, who often--

(A) do not have a relationship with a mainstream financial services provider;

(B) lack experience and information about personal finance; and

(C) are ill-prepared to make informed financial decisions;

(10) many people in the United States--

(A) are in a precarious financial position because they lack an understanding of economic and financial fundamentals and of financial planning;

(B) are forgoing opportunities to build wealth by failing to target their investments to higher yielding, yet secure savings vehicles; and

(C) are failing to adequately plan and save for retirement; and

(11) financial literacy is the foundation that supports--

(A) economic independence for the citizens of the United States; and

(B) the functioning of our free market economy.

SEC. 3. DEFINITIONS.

As used in this Act--

(1) the term `Commission' means the Financial Literacy Commission established under section 101; and

(2) the term `financial literacy' means basic personal income and household money management and planning skills, including--

(A) saving and investing;

(B) building wealth;

(C) managing spending, credit, and debt effectively;

(D) tax and estate planning;

(E) the ability to ascertain fair and favorable credit terms and avoid abusive, predatory, or deceptive credit offers;

(F) the ability to understand, evaluate, and compare financial products, services, and opportunities; and

(G) all other related skills.

TITLE I--FINANCIAL LITERACY COMMISSION

SEC. 101. ESTABLISHMENT OF FINANCIAL LITERACY COMMISSION.

(a) IN GENERAL- There is established a commission to be known as the Financial Literacy Commission.

(b) PURPOSE- The Commission shall serve to improve the financial literacy of persons in the United States by overseeing, implementing, and reporting upon the effects of the performance of the duties of the Commission set forth in section 102.

(c) MEMBERSHIP-

(1) COMPOSITION- The Commission shall be composed of not more than 19 members, including--

(A) the Comptroller of the Currency;

(B) the Secretary of Agriculture of the Department of Agriculture;

(C) the Secretary of Education of the Department of Education;

(D) the Secretary of Housing and Urban Development of the Department of Housing and Urban Development;

(E) the Secretary of Labor of the Department of Labor;

(F) the Secretary of the Treasury;

(G) the Chairman of the Federal Deposit Insurance Corporation;

(H) the Chairman of the Board of Governors of the Federal Reserve System;

(I) the Chairman of the Federal Trade Commission;

(J) the Administrator of General Services of the General Services Administration;

(K) the Commissioner of the Internal Revenue Service;

(L) the Chairman of the National Credit Union Administration Board;

(M) the Director of the Office of Thrift Supervision;

(N) the Chairman of the Securities and Exchange Commission;

(O) the Administrator of the Small Business Administration;

(P) the Commissioner of the Social Security Administration; and

(Q) at the discretion of the President, not more than 3 individuals appointed by the President from among the administrative heads of any other Federal agency, department, or other Government entity, whom the President believes would be helpful in implementing the purpose of the Commission.

(2) DESIGNEES- The individuals referred to in paragraph (1) may appoint a designee from within the department or agency of that individual to serve as a member of the Commission.

(d) FEDERAL EMPLOYEE REQUIREMENT- Each member of the Commission shall be an officer or employee of the United States.

(e) CHAIRPERSON- The Commission shall select a Chairperson from among its members. The Secretary of the Treasury, or the designee thereof under subsection (c)(2), shall chair the initial meeting of the Commission.

(f) VICE CHAIRPERSON- The Commission shall select a Vice Chairperson from among its members.

(g) VACANCIES- Any vacancy in the Commission shall be filled in the same manner as the original appointment or designation, as provided under subsection (c).

(h) INITIAL MEETING- The Commission shall hold its first meeting not later than 60 days after the date of enactment of this Act.

(i) MEETINGS-

(1) SEMIANNUAL MEETINGS- The Commission shall hold, at the call of the Chairperson, 1 meeting every 6 months to conduct necessary business. All such meetings shall be open to the public.

(2) DISCRETIONARY MEETINGS- The Commission may hold, at the call of the Chairperson, such other meetings as the Chairperson sees fit to carry out this Act.

(j) QUORUM- A majority of the members of the Commission shall constitute a quorum, but a lesser number of members may hold hearings.

(k) EXECUTIVE COMMITTEE-

(1) IN GENERAL- The Commission shall establish an Executive Committee comprised of--

(A) the Chairperson;

(B) the Vice Chairperson; and

(C) 3 at-large members selected by the Commission from among members appointed under subsection (c).

(2) TERM- Members of the Executive Committee selected under paragraph (1)(C) shall serve for such time as determined by the Commission.

(3) MEETINGS- The Executive Committee shall hold, at the call of the Chairperson, 1 meeting every 2 months to conduct necessary administrative business.

(4) QUORUM- A majority of the members of the Executive Committee shall constitute a quorum.

SEC. 102. DUTIES OF THE COMMISSION.

(a) IN GENERAL- The Commission, through the authority of the members referred to in section 101(c), shall take such actions as it deems necessary to streamline, improve, or augment the financial literacy programs, materials, and grants of the Federal Government.

(b) WEBSITE-

(1) IN GENERAL- The Commission shall establish and maintain a website, and attempt to register the domain name `FinancialLiteracy.gov', or, if such domain name is not available, a similar domain name.

(2) PURPOSES- The website established under paragraph (1) shall--

(A) serve as a clearinghouse of information about Federal financial literacy programs;

(B) provide a coordinated entry point for accessing information about all Federal publications, grants, and materials promoting enhanced financial literacy;

(C) offer information on all Federal grants to promote financial literacy, and offer information to the public on how to target, apply for, and receive a grant that is most appropriate under the circumstances;

(D) as the Commission considers appropriate, feature website links to private sector efforts, such as the JumpStart Coalition for Personal Financial Literacy, and feature information about private sector financial literacy programs, materials, or campaigns;

(E) highlight information about best practices for teaching and promoting financial literacy; and

(F) offer such other information as the Commission finds appropriate to share with the public in the fulfillment of its purpose.

(c) TOLL FREE HOTLINE- The Commission shall establish a toll-free telephone number that shall be made available to members of the public seeking information about issues pertaining to financial literacy.

(d) DEVELOPMENT AND DISSEMINATION OF MATERIALS- The Commission shall--

(1) develop materials to promote financial literacy; and

(2) disseminate such materials to the general public.

(e) ADMINISTRATION OF GRANT PROGRAMS-

(1) AUTHORITY- The Commission shall be authorized to establish and implement grant programs to promote financial literacy.

(2) ELIGIBILITY- Grants awarded under paragraph (1) may be awarded to schools, non-profit organizations, units of general local government, faith-based organizations, and such other entities as determined eligible by the Commission.

(3) PREFERENCES- In awarding grants under paragraph (1), the Commission shall--

(A) give preference to entities that have a demonstrated record of serving communities with people who have historically had either limited or no access to financial literacy education; and

(B) to the extent practicable, award grants to as many entities eligible under paragraph (2) as possible.

(f) INITIAL AND ANNUAL REPORTS-

(1) INITIAL REPORT-

(A) IN GENERAL- Not later than 18 months after the date of the first meeting of the Commission, the Commission shall issue an initial report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives on the progress of the Commission in carrying out this Act.

(B) CONTENTS- The report required under subparagraph (A) shall--

(i) identify all Federal programs, materials, and grants which seek to improve financial literacy, and assess the effectiveness of such programs; and

(ii) identify all actions that the Commission has taken to streamline, improve, or augment the financial literacy programs, materials, and grants of the Federal Government.

(2) ANNUAL REPORT-

(A) IN GENERAL- Not later than November 30 of each year, the Commission shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report detailing the activities of the Commission during the preceding fiscal year, and making recommendations on ways to enhance financial literacy in the United States.

(B) CONTENTS- The report required under subparagraph (A) shall include--

(i) information concerning the content and public use of the website established under subsection (b);

(ii) information concerning the usage of the toll-free telephone number established under subsection (c);

(iii) summaries of the financial literacy materials developed under subsection (d), and data regarding the dissemination of such materials;

(iv) information about the activities of the Commission planned for the next fiscal year;

(v) a summary of all Federal efforts to reach out to communities that have historically lacked access to financial literacy materials and education; and

(vi) such other materials relating to the duties of the Commission as the Commission deems appropriate.

(g) PERIODIC STUDIES- The Commission may conduct periodic studies regarding the state of financial literacy in the United States, as the Commission determines appropriate.

SEC. 103. POWERS OF THE COMMISSION.

(a) HEARINGS- The Commission may hold such hearings, sit and act at such times and places, take such testimony, and receive such evidence as the Commission considers advisable to carry out this Act.

(b) ADVISORY COMMITTEES- The Commission shall establish not fewer than 1 advisory committee, consisting of representatives of lending institutions, financial literacy nonprofit organizations, consumer advocates, State and local governments, and such other individuals that the Commission believes could contribute to the work of the Commission.

(c) INFORMATION FROM FEDERAL AGENCIES- The Commission may secure directly from any Federal department or agency such information as the Commission considers necessary to carry out this Act. Upon the request of the Chairman, the head of such department or agency shall furnish such information to the Commission.

(d) GIFTS- The Commission may accept, use, and dispose of gifts or donations of services or property.

SEC. 104. COMMISSION PERSONNEL MATTERS.

(a) COMPENSATION OF MEMBERS- Each member of the Commission shall serve without compensation in addition to that received for their service as an officer or employee of the United States.

(b) TRAVEL EXPENSES- The members of the Commission shall be allowed travel expenses, including per diem in lieu of subsistence, at rates authorized for employees of agencies under subchapter I of chapter 57 of title 5, United States Code, while away from their homes or regular places of business in the performance of services for the Commission.

(c) STAFF-

(1) IN GENERAL- The Chairperson of the Commission may, without regard to civil service laws and regulations, appoint and terminate an executive director and such other additional personnel as may be necessary to enable the Commission to perform its duties. The employment of an executive director shall be subject to confirmation by members of the Commission.

(2) COMPENSATION- The Chairperson of the Commission may fix the compensation of the executive director and other personnel without regard to the provisions of chapter 51 and subchapter III of chapter 53 of title 5, United States Code, relating to classification of positions and General Schedule pay rates, except that the rate of pay for the executive director and other personnel may not exceed the rate payable for level V of the Executive Schedule under section 5316 of title 5, United States Code.

(3) DETAIL OF GOVERNMENT EMPLOYEES- Any Federal Government employee may be detailed to the Commission without reimbursement, and such detail shall be without interruption or loss of civil service status or privilege.

(4) TEMPORARY AND INTERMITTENT SERVICES- The Chairperson of the Commission may procure temporary and intermittent services under section 3109(b) of title 5, United States Code, at rates for individuals which do not exceed the daily equivalent of the annual rate of basic pay prescribed for level V of the Executive Schedule under section 5316 of title 5, United States Code.

SEC. 105. TERMINATION.

The Commission shall terminate on September 30, 2013.

SEC. 106. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated to the Commission such sums as may be necessary to carry out this Act, including administrative expenses of the Commission.

END