[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 2654 Introduced in Senate (IS)]








109th CONGRESS
  2d Session
                                S. 2654

To protect consumers, and especially young consumers, from skyrocketing 
    consumer debt and the barrage of credit card solicitations, to 
establish a financial literacy and education program in elementary and 
   secondary schools to help prepare young people to be financially 
             responsible consumers, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 26, 2006

 Mr. Menendez introduced the following bill; which was read twice and 
  referred to the Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
To protect consumers, and especially young consumers, from skyrocketing 
    consumer debt and the barrage of credit card solicitations, to 
establish a financial literacy and education program in elementary and 
   secondary schools to help prepare young people to be financially 
             responsible consumers, 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 ``Protection of Young Consumers Act of 
2006''.

SEC. 2. PROTECTION OF YOUNG CONSUMERS FROM PRESCREENED CREDIT OFFERS.

    (a) In General.--Section 604(c)(1)(B) of the Fair Credit Reporting 
Act (15 U.S.C. 1681(c)(1)(B)) is amended--
            (1) in clause (ii), by striking ``and'' at the end; and
            (2) in clause (iii), by striking the period at the end and 
        inserting the following: ``; and
                    ``(iv) the consumer report indicates that the 
                consumer is age 21 or older, except that a consumer who 
                is at least 18 years of age may elect, in accordance 
                with subsection (e)(7), to authorize the consumer 
                reporting agency to include the name and address of the 
                consumer in any list of names provided by the agency 
                pursuant to this paragraph.''.
    (b) Opt-in for Young Consumers.--Section 604(e) of the Fair Credit 
Reporting Act (15 U.S.C. 1681(e)) is amended--
            (1) by striking the subsection heading and inserting the 
        following:
    ``(e) Election of Consumers Regarding Lists.--''; and
            (2) by adding at the end the following:
            ``(7) Opt-in for underage consumers.--
                    ``(A) In general.--A consumer who is at least 18 
                years of age, but has not attained his or her 21st 
                birthday may elect to have the name and address of the 
                consumer included in any list provided by a consumer 
                reporting agency under subsection (c)(1)(B) in 
                connection with a credit or insurance transaction that 
                is not initiated by the consumer by notifying the 
                agency in accordance with subparagraph (B) that the 
                consumer consents to the use of a consumer report 
                relating to the consumer in connection with any credit 
                or insurance transaction that is not initiated by the 
                consumer.
                    ``(B) Manner of notification.--An election by a 
                consumer described in subparagraph (A) shall be in 
                writing, using a signed notice of election form issued 
                or made available electronically by the agency at the 
                request of the consumer for purposes of this paragraph.
                    ``(C) Effectiveness of election.--An election by a 
                consumer under subparagraph (A) to be included in a 
                list provided by a consumer reporting agency--
                            ``(i) shall be effective until the earlier 
                        of--
                                    ``(I) the 21st birthday of the 
                                consumer; or
                                    ``(II) the date on which the 
                                consumer notifies the agency, through 
                                the notification system established by 
                                the agency under paragraph (5), that 
                                the election is no longer effective; 
                                and
                            ``(ii) shall be effective with respect to 
                        each affiliate of the agency.
                    ``(D) Rule of construction.--An election by a 
                consumer under subparagraph (A) to be included in a 
                list provided by a consumer reporting agency may not be 
                construed to limit the applicability of this subsection 
                to any person age 21 or older, and such person may 
                elect to be excluded from any such list after the 
                attainment of his or her 21st birthday in the manner 
                otherwise provided under this subsection.''.

SEC. 3. PROMOTING YOUTH FINANCIAL LITERACY.

    (a) In General.--Title IV of the Elementary and Secondary Education 
Act of 1965 (20 U.S.C. 7101 et seq.) is amended by adding at the end 
the following:

              ``PART D--PROMOTING YOUTH FINANCIAL LITERACY

``SEC. 4401. SHORT TITLE AND FINDINGS.

    ``(a) Short Title.--This part may be cited as the `Youth Financial 
Education Act'.
    ``(b) Findings.--Congress finds the following:
            ``(1) In order to succeed in our dynamic American economy, 
        young people must obtain the skills, knowledge, and experience 
        necessary to manage their personal finances and obtain general 
        financial literacy. All young adults should have the 
        educational tools necessary to make informed financial 
        decisions.
            ``(2) Despite the critical importance of financial literacy 
        to young people, the average high school graduate lacks basic 
        skills in the management of personal financial affairs. A 
        nationwide survey conducted in 2004 by the Jump$tart Coalition 
        for Personal Financial Literacy examined the financial 
        knowledge of 4,074 12th graders. On average, survey respondents 
        answered only 52 percent of the questions correctly, up only 
        slightly from the 50 percent average score in 2002.
            ``(3) An evaluation by the National Endowment for Financial 
        Education High School Financial Planning Program undertaken 
        jointly with the Cooperative State Research, Education, and 
        Extension Service of the Department of Agriculture demonstrates 
        that as little as 10 hours of classroom instruction can impart 
        substantial knowledge and affect significant change in how 
        teens handle their money.
            ``(4) State educational leaders have recognized the 
        importance of providing a basic financial education to students 
        in kindergarten through grade 12 by integrating financial 
        education into State educational standards, but by 2004, only 7 
        States required students to complete a course that covered 
        personal finance before graduating from high school.
            ``(5) Teacher training and professional development are 
        critical to achieving youth financial literacy. Teachers should 
        be given the tools they need to educate our Nation's youth on 
        personal finance and economics.
            ``(6) Personal financial education helps prepare students 
        for the workforce and for financial independence by developing 
        their sense of individual responsibility, improving their life 
        skills, and providing them with a thorough understanding of 
        consumer economics that will benefit them for their entire 
        lives.
            ``(7) Financial education integrates instruction in 
        valuable life skills with instruction in economics, including 
        income and taxes, money management, investment and spending, 
        and the importance of personal savings.
            ``(8) The consumers and investors of tomorrow are in our 
        schools today. The teaching of personal finance should be 
        encouraged at all levels of our Nation's educational system, 
        from kindergarten through grade 12.

``SEC. 4402. STATE GRANT PROGRAM.

    ``(a) Program Authorized.--The Secretary is authorized to award 
grants, from allocations under subsection (c), to State educational 
agencies to develop and integrate youth financial education programs 
for students in elementary schools and secondary schools.
    ``(b) State Plan.--
            ``(1) Approved state plan required.--To be eligible to 
        receive a grant under this section, a State educational agency 
        shall submit an application to the Secretary that--
                    ``(A) includes a State plan in accordance with 
                paragraph (2); and
                    ``(B) is approved by the Secretary.
            ``(2) State plan contents.--The State plan referred to in 
        paragraph (1) shall include--
                    ``(A) a description of how the State educational 
                agency will use the grant funds;
                    ``(B) a description of how the programs supported 
                by the grant will be coordinated with other relevant 
                Federal, State, regional, and local programs; and
                    ``(C) a description of how the State educational 
                agency will evaluate program performance.
    ``(c) Allocation of Funds.--
            ``(1) Allocation factors.--Except as otherwise provided in 
        paragraph (2), the Secretary shall allocate the amounts made 
        available to carry out this section pursuant to subsection (a) 
        to each State according to the relative populations in all of 
        the States of students in kindergarten through grade 12, as 
        determined by the Secretary based on the most recent 
        satisfactory data.
            ``(2) Minimum allocation.--Subject to the availability of 
        appropriations, and notwithstanding paragraph (1), a State that 
        has submitted a plan under subsection (b) that is approved by 
        the Secretary shall be allocated a grant under this section 
        that is not less than $500,000 for a fiscal year.
            ``(3) Reallocation.--In any fiscal year, the Secretary 
        shall reallocate, to States with approved plans under this 
        section in accordance with paragraph (1), an allocation under 
        this subsection--
                    ``(A) for any State that has not submitted a plan 
                under subsection (b); or
                    ``(B) for any State whose plan submitted under 
                subsection (b) has been disapproved by the Secretary.
    ``(d) Use of Grant Funds.--
            ``(1) Required uses.--A grant made to a State educational 
        agency under this part shall be used--
                    ``(A) to provide funds to local educational 
                agencies and public schools to carry out financial 
                education programs for students in kindergarten through 
                grade 12, based on the concept of achieving financial 
                literacy through the teaching of personal financial 
                management skills and the basic principles involved 
                with earning, spending, saving, and investing;
                    ``(B) to carry out professional development 
                programs to prepare teachers and administrators for 
                financial education; and
                    ``(C) to monitor and evaluate programs supported 
                under subparagraphs (A) and (B).
            ``(2) Limitation on administrative costs.--A State 
        educational agency receiving a grant under subsection (a) may 
        use not more than 4 percent of the total amount of the grant in 
        any fiscal year for the administrative costs of carrying out 
        this section.
    ``(e) Report to the Secretary.--
            ``(1) In general.--Each State educational agency receiving 
        a grant under this section shall transmit a report to the 
        Secretary with respect to each fiscal year for which a grant is 
        received.
            ``(2) Content of report.--Each report required under 
        paragraph (1) shall describe--
                    ``(A) the programs supported by the grant; and
                    ``(B) the results of the State educational agency's 
                monitoring and evaluation of such programs.

``SEC. 4403. CLEARINGHOUSE.

    ``(a) Authority.--Subject to the availability of appropriations, 
the Secretary shall make a grant to, or execute a contract with, an 
eligible entity with substantial experience in the field of financial 
education, such as the Jump$tart Coalition for Personal Financial 
Literacy, to establish, operate, and maintain a national clearinghouse 
(in this part referred to as the `Clearinghouse') for instructional 
materials and information regarding model financial education programs 
and best practices.
    ``(b) Eligible Entity.--In this section, the term `eligible entity' 
means a national nonprofit organization with a proven record of--
            ``(1) cataloging youth financial literacy materials; and
            ``(2) providing support services and materials to schools 
        and other organizations that work to promote youth financial 
        literacy.
    ``(c) Application.--An eligible entity desiring to establish, 
operate, and maintain the Clearinghouse shall submit an application to 
the Secretary at such time, in such manner, and accompanied by such 
information, as the Secretary may reasonably require.
    ``(d) Basis and Term.--The Secretary shall make the grant or 
contract authorized under subsection (a) on a competitive, merit basis 
for a term of 5 years.
    ``(e) Use of Funds.--The Clearinghouse shall use the funds provided 
under a grant or contract made under subsection (a)--
            ``(1) to maintain a repository of instructional materials 
        and related information regarding financial education programs 
        for elementary schools and secondary schools, including 
        kindergartens, for use by States, localities, and the general 
        public;
            ``(2) to disseminate to States, localities, and the general 
        public, through electronic and other means, instructional 
        materials and related information regarding financial education 
        programs for elementary schools and secondary schools, 
        including kindergartens; and
            ``(3) to the extent that resources allow, to provide 
        technical assistance to States, localities, and the general 
        public on the design, establishment, and implementation of 
        financial education programs for elementary schools and 
        secondary schools, including kindergartens.
    ``(f) Consultation.--The chief executive officer of the eligible 
entity selected to establish and operate the Clearinghouse shall 
consult with the Department of the Treasury and the Securities and 
Exchange Commission with respect to its activities under subsection 
(e).
    ``(g) Submission to Clearinghouse.--Each Federal agency or 
department that develops financial educational programs and 
instructional materials for such programs shall submit to the 
Clearinghouse information on the programs and copies of the materials.
    ``(h) Application of Copyright Laws.--In carrying out this section, 
the Clearinghouse shall comply with the provisions of title 17, United 
States Code.

``SEC. 4404. EVALUATION AND REPORT.

    ``(a) Performance Measures.--The Secretary shall develop measures 
to evaluate the performance of programs assisted under sections 4402 
and 4403.
    ``(b) Evaluation According to Performance Measures.--Applying the 
performance measures developed under subsection (a), the Secretary 
shall evaluate programs assisted under sections 4402 and 4403--
            ``(1) to judge the programs' performance and effectiveness;
            ``(2) to identify which of the programs represent the best 
        practices of entities developing financial education programs 
        for students in kindergarten through grade 12; and
            ``(3) to identify which of the programs may be replicated 
        and used to provide technical assistance to States, localities, 
        and the general public.
    ``(c) Report.--
            ``(1) In general.--For each fiscal year for which there are 
        appropriations under section 4407(a), the Secretary shall 
        transmit a report to Congress describing the status of the 
        implementation of this part.
            ``(2) Contents of report.--The report required under 
        paragraph (1) shall include--
                    ``(A) the results of the evaluation required under 
                subsection (b); and
                    ``(B) a description of the programs supported under 
                section 4402.

``SEC. 4405. DEFINITIONS.

    ``In this part:
            ``(1) Financial education.--The term `financial education' 
        means educational activities and experiences, planned and 
        supervised by qualified teachers, that enable students--
                    ``(A) to understand basic economic and consumer 
                principles;
                    ``(B) to acquire the skills and knowledge necessary 
                to manage personal and household finances; and
                    ``(C) to develop a range of competencies that will 
                enable the students to become responsible consumers.
            ``(2) Qualified teacher.--The term `qualified teacher' 
        means a teacher who holds a valid teaching certification or is 
        considered to be qualified by the State educational agency in 
        the State in which the teacher works.

``SEC. 4406. PROHIBITION.

    ``Nothing in this part shall be construed to authorize an officer 
or employee of the Federal Government to mandate, direct, or control a 
State, local educational agency, or school's specific instructional 
content, curriculum, or program of instruction, as a condition of 
eligibility to receive funds under this part.

``SEC. 4407. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) Authorization.--For the purposes of carrying out this part, 
there are authorized to be appropriated $100,000,000 for each of the 
fiscal years 2007 through 2011.
    ``(b) Limitation on Funds for Clearinghouse.--The Secretary may use 
not less than 2 percent and not more than 5 percent of amounts 
appropriated under subsection (a) for each fiscal year to carry out 
section 4403.
    ``(c) Limitation on Funds for Secretary Evaluation.--The Secretary 
may use not more than $200,000 from the amounts appropriated under 
subsection (a) for each fiscal year to carry out subsections (a) and 
(b) of section 4404.
    ``(d) Limitation on Administrative Costs.--Except as necessary to 
carry out subsections (a) and (b) of section 4404 using amounts 
described in subsection (c), the Secretary shall not use any portion of 
the amounts appropriated under subsection (a) for the costs of 
administering this part.''.
    (b) Table of Contents.--The table of contents of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 6301 note) is amended by 
inserting after the item relating to section 4304 the following:

              ``PART D--PROMOTING YOUTH FINANCIAL LITERACY

        ``Sec. 4401. Short title and findings.
        ``Sec. 4402. State grant program.
        ``Sec. 4403. Clearinghouse.
        ``Sec. 4404. Evaluation and report.
        ``Sec. 4405. Definitions.
        ``Sec. 4406. Prohibition.
        ``Sec. 4407. Authorization of appropriations.''.
    (c) GAO Study.--
            (1) Study.--The Comptroller General shall conduct an annual 
        study of the effectiveness of the programs and activities 
        assisted under part D of title IV of the Elementary and 
        Secondary Education Act of 1965.
            (2) Report.--The Comptroller General shall prepare and 
        submit to Congress a report on the results of each study 
        conducted under paragraph (1). The first such report shall be 
        submitted 1 year after the date of enactment of this Act and 
        subsequent reports shall be submitted each year thereafter.
            (3) Authorization of appropriations.--There are authorized 
        to be appropriated to carry out this section such sums as may 
        be necessary for fiscal year 2007 and each of the 4 succeeding 
        fiscal years thereafter.
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