[Congressional Record Volume 149, Number 56 (Tuesday, April 8, 2003)]
[Senate]
[Pages S4961-S4962]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CORZINE:
  S. 813. A bill to amend part A of title IV of the Social Security Act 
to require a State to promote financial education under the temporary 
assistance to needy families program and to allow financial education 
to count as a work activity under that program; to the Committee on 
Finance.
  Mr. CORZINE. Mr. President, I rise today with my colleagues Senators 
Akaka and Sarbanes to introduce the Financial Literacy for Self-
Sufficiency Act.
  Our bill would require States to promote financial education through 
their TANF, Temporary Assistance to Needy Families, programs. Financial 
education--education that promotes an understanding of consumer, 
economic, and personal finance concepts--is extremely important for all 
families, and is especially important for low-income families who are 
moving from welfare to work.
  While TANF focuses on moving families off cash assistance and into 
work, it fails to provide recipients with the tools they need to 
maximize their earnings and manage their expenses in order to achieve 
financial stability once they are employed. If we truly expect to move 
these families to achieve financial independence, we must give them the 
tools they will need to make that transition.
  One of these tools is a bank account. Millions of low-income families 
remain outside of the formal banking system, with many of them spending 
too much of their hard-earned dollars at costly check cashing 
operations. In fact, more than eight million families earning under 
$25,000 a year lack a checking or savings account. A study conducted by 
the United States Department of the Treasury in 2000 found that a 
worker earning $12,000 a year would pay approximately $250 a year just 
to cash their payroll checks at such an outlet. And, nearly 16 percent 
of the checks cashed at check cashing outlets are government benefit 
checks--including welfare benefit checks.
  In addition to expanding the number of banks that do business in low-
income communities, educating low-income unbanked families about the 
benefits of formal checking and savings accounts can significantly 
improve access to financial services.
  But, financial education isn't just about bank accounts and savings. 
It is also about protecting low-income families form predatory lending 
and devastating credit arrangements. Financial education that addresses 
abusive lending practices can help prevent unaffordable loan payments, 
equity stripping, and foreclosure. I strongly support legislative 
efforts to end predatory lending practices in our country, but until we 
do, ensuring that consumers are aware of unfair and abusive loan terms 
is a measure that will provide them some protection from these tactics.
  Finally, families leaving welfare for work face many challenges, 
including securing child care and transportation. One challenge that 
often is not mentioned, however, is the challenge of transitioning from 
a benefits-based income to a wage income. Financial literacy programs 
that educate families transitioning from welfare to work about taxes 
and tax benefits that they may be eligible for, such as the Dependent 
Care Tax Credit and the Earned Income Tax Credit, will ensure that they 
have access to these important work benefits.
  The Financial Literacy for Self-Sufficiency Act will allow States to 
use their TANF funds to collaborate with community-based organizations, 
banks, and community colleges to create financial education programs 
for low-income families receiving welfare and for those transitioning 
from welfare to work. As Federal Reserve Chairman Alan Greenspan 
Chairman Greenspan has noted, ``Educational and training programs may 
be the most critical service offered by community-based organizations 
to enhance the ability of low-income households to accumulate assets.''
  I hope members of the Senate Finance Committee will join my 
colleagues and me in promoting financial education for our nation's 
TANF recipients when they act to create a reauthorization framework for 
our nation's welfare program.
  I ask unanimous consent that the text of the legislation be printed 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 813

       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 ``TANF Financial Education 
     Promotion Act of 2003''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:

[[Page S4962]]

       (1) Most recipients of assistance under the temporary 
     assistance to needy families program established under part A 
     of title IV of the Social Security Act (42 U.S.C. 601 et 
     seq.) and individuals moving toward self-sufficiency operate 
     outside the financial mainstream, paying high costs to handle 
     their finances and saving little for emergencies or the 
     future.
       (2) Currently, personal debt levels and bankruptcy filing 
     rates are high and savings rates are at their lowest levels 
     in 70 years. The inability of many households to budget, 
     save, and invest prevents them from laying the foundation for 
     a secure financial future.
       (3) Financial planning can help families meet near-term 
     obligations and maximize their longer-term well being, 
     especially valuable for populations that have traditionally 
     been underserved by our financial system.
       (4) Financial education can give individuals the necessary 
     financial tools to create household budgets, initiate savings 
     plans, and acquire assets.
       (5) Financial education can prevent vulnerable customers 
     from becoming entangled in financially devastating credit 
     arrangements.
       (6) Financial education that addresses abusive lending 
     practices targeted at specific neighborhoods or vulnerable 
     segments of the population can prevent unaffordable payments, 
     equity stripping, and foreclosure.
       (7) Financial education speaks to the broader purpose of 
     the temporary assistance to needy families program to equip 
     individuals with the tools to succeed and support themselves 
     and their families in self-sufficiency.

     SEC. 3. REQUIREMENT TO PROMOTE FINANCIAL EDUCATION UNDER 
                   TANF.

       (a) State Plan.--Section 402(a)(1)(A) of the Social 
     Security Act (42 U.S.C. 602(a)(1)(A)) is amended by adding at 
     the end the following:
       ``(vii) Establish goals and take action to promote 
     financial education, as defined in section 407(j), among 
     parents and caretakers receiving assistance under the program 
     through collaboration with community-based organizations, 
     financial institutions, and the Cooperative State Research, 
     Education, and Extension Service of the Department of 
     Agriculture.''.
       (b) Inclusion of Financial Education as a Work Activity.--
     Section 407 of the Social Security Act (42 U.S.C 607) is 
     amended--
       (1) in subsection (c)(1)--
       (A) in subparagraph (A), by striking ``or (12)'' and 
     inserting ``(12), or (13)''; and
       (B) in subparagraph (B), by striking ``or (12)'' each place 
     it appears and inserting ``(12), or (13)'';
       (2) in subsection (d)--
       (A) in paragraph (11), by striking ``and'' at the end;
       (B) in paragraph (12), by striking the period and inserting 
     ``; and''; and
       (C) by adding at the end the following:
       ``(13) financial education, as defined in subsection 
     (j).''; and
       (3) by adding at the end the following:
       ``(j) Definition of Financial Education.--In this part, the 
     term `financial education' means education that promotes an 
     understanding of consumer, economic, and personal finance 
     concepts, including the basic principles involved with 
     earning, budgeting, spending, saving, investing, and 
     taxation.''.
       (c) Effective Date.--The amendments made by this section 
     take effect on October 1, 2003.
                                 ______