[Congressional Record Volume 149, Number 113 (Monday, July 28, 2003)]
[Senate]
[Pages S10058-S10062]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SARBANES (for himself and Mr. Corzine):
  S. 1470. A bill to establish the Financial Literacy and education 
Coordinating Committee within the Department of the Treasury to improve 
the state of financial literacy and education among American consumers; 
to the Committee on Banking, Housing, and Urban Affairs.
  Mr. SARBANES. Mr. President, today I am introducing the Financial 
Literacy and Education Coordinating Act of 2003. This legislation 
creates an intergovernmental coordinating Committee whose goal is to 
improve the financial decision making of all Americans by strengthening 
education to raise financial literacy levels.
  The phrase ``financial literacy'' is one we often hear but often do 
not really understand. It is analogous in financial matters to basic 
literacy--the ability to read and understand what is read--in our 
everyday lives. We are keenly aware from our efforts to improve our 
schools and raise our students' ability to read that there are higher 
and lower levels of literacy. Numerous statistical studies indicate 
that in the field of personal finances, substantial numbers of people 
are financially illiterate. Among those who have some degree of 
literacy, the vast majority are performing below what their `grade 
level' ought to be.
  This bill addresses that problem. It reflects my long-standing 
concern that inadequate knowledge of financial issues leaves our 
consumers seriously vulnerable to exploitation, with devastating 
consequences for them and their families. As Chairman of the Committee 
on Banking, Housing and Urban Affairs, during the last Congress, I 
chaired a series of hearings to examine the state of financial literacy 
and education throughout the Nation. The Committee received testimony 
from a wide range of witnesses on the state of financial literacy and 
education among Americans of all ages and from all walks of life--from 
school age children to retirees, small investors to those without bank 
accounts, and first time workers to those saving for retirement. The 
witnesses were unanimous in the view that we needed to increase 
financial education in this country.
  Federal Reserve Chairman Alan Greenspan stated before the Committee

[[Page S10059]]

that: ``In considering means to improve the financial status of 
families, education can play a critical role by equipping consumers 
with the knowledge required to make wise decisions. . . . This is 
especially the case for populations that have traditionally been 
underserved by our financial system.'' Chairman Greenspan made the 
point that increased financial education has the potential to improve 
significantly the economic situation of the vast majority of Americans.
  The goal of this legislation is to promote better financial decision-
making among consumers. While at present substantial work is in 
progress both within the government and outside of it, it suffers from 
the lack of a single comprehensive strategy--there is too little 
coordination, and too much duplication. As Tess Canja, President of 
AARP testified before the Committee: ``We see a need for a coherent and 
coordinated national strategy for making available a well-researched 
and well-evaluated progression of financial literacy programs and 
services.'' By creating an underlying strategy to address these 
problems, the legislation will help enable Americans to make the 
financial decisions that best serve their needs and aspirations. This 
legislation seeks to address these problems and create a strategy to 
improve the financial choices and outcomes for all Americans.
  The bill creates a Coordinating Committee chaired by the Secretary of 
the Treasury, based in the Treasury Department's Office of Financial 
Education. The Committee will be responsible for coordinating and 
centralizing the various existing financial education activities in our 
government agencies as well as any future initiatives. Currently there 
are at least sixteen active financial-education programs. They operate 
in each of the Federal banking agencies--the Federal Reserve, FDIC, 
OCC, and OTS; the NCUA; the SEC; in six executive departments--
Education, Agriculture, Defense, Health and Human Services, Labor, and 
Veterans Affairs; and in such agencies as the Social Security 
Administration, Federal Trade Commission, the Commodities Futures 
Trading Commission, and the Office of Personnel Management.
  The Committee will coordinate these and other efforts. Additional 
members can be added at the discretion of the Chairperson of the 
Committee. All will benefit from the better coordination and the 
elimination of unnecessary duplication that the Committee will provide.
  In addition, many State and local governments, non-profit entities, 
and private enterprises have developed and implemented excellent 
financial education programs. A successful national strategy to 
increase financial literacy and education must involve a partnership 
that engages all levels of government, including at the State and local 
level, along with leaders of the non-profit and private sectors. As Don 
Blandin, President of the American Savings Education Council noted in 
his testimony before the Committee: ``Organizations in both the private 
and public sectors must collaborate on all levels to help educate 
Americans about the importance of taking control of their financial 
future. By combining and leveraging our comprehensive networks and 
resources, we have a better chance of reaching people that none of us 
would be able to reach alone.'' The Coordinating Committee established 
by this legislation will undertake just such a collaboration. It will 
develop a national strategy in conjunction with State and local 
governments and with the private and non-profit sectors, and will 
report its findings back to the Congress.
  It is disturbing to hear the statistics about the current situation 
and how financially under-educated the American people are. The 
Consumer Federation of America found that the typical American failed a 
14-question test of basic knowledge of personal finances. Fewer than 
one in ten, 8, answered three-quarters of the questions correctly. 
Eighty-two percent of high school seniors failed a 13-question personal 
financial quiz on such basic questions as interest rates, savings, 
loans, credit cards, and calculating net worth.
  The lack of financial education affects Americans of every age and 
background. There may be differing opinions on issues of financial 
security for retirees, but I suspect there is little disagreement on 
the importance to every family of budgeting and savings for retirement. 
We have data showing that households with a savings plan save twice as 
much as those without a plan, and yet surveys indicate that half of all 
Americans have not taken the basic step of calculating how much they 
will need to save for retirement. Teaching families how to budget and 
develop a savings plan as well as the importance of doing so would 
enhance many Americans' financial security.
  There are far too many people today who lack a bank account, which is 
the passport for access to mainstream financial services. The Wall 
Street Journal, in an article appearing June 28, 2001, estimated that 
10 million adult Americans have no relationship with a mainstream 
financial services provider. Of the millions of households that have no 
relationship with a bank, one-third are African American and 29 percent 
are Hispanic. The large costs of failing to bring people into the 
mainstream financial system makes it imperative to pursue all avenues 
to bring them in. A lack of basic consumer financial education on how a 
checking and a savings account work and why it's important to have such 
an account is one explanation for these disturbing figures. Once people 
enter into the financial mainstream a lot of the protections and 
safeguards which have been developed for the board mass of the public 
are enjoyed by these newly banked people.
  The Banking Committee heard from witnesses that many college students 
have access to significant credit through credit cards, but have little 
experience and often little to no education on how to use them 
responsibly. Kentucky State Treasurer Jonathan Miller, who has held a 
series of hearings on financial literacy throughout his state, 
testified before the Banking Committee that: ``for a significant and 
growing minority of college students, credit card use and misuse can be 
devastating.'' The Department of Education estimates that the average 
credit card debt among college students was over $3,000 in the year 
2000. College students are not the only ones susceptible to credit card 
debt: the average credit card debt per American family is over $8,000. 
Furthermore, too many people are unaware of their own credit score, how 
to access that score, and the impact that their credit score has on 
both their access to credit and the terms on which that credit is 
offered.
  Students are entering college with insufficient knowledge of the 
financial system and as a result, they are getting into serious 
financial problems. One of the Committee's witnesses, Ms. Ellen 
Frishberg, Director of Student Financial Services at John Hopkins 
University, testified that, ``Because of the case of getting credit, 
the lack of financial savy on the part of these otherwise very bright 
students, and the unchecked solicitation and giveaways that were going 
on during orientation, in 1994 the Dean of Students decided it was best 
to prohibit credit card vendors from the Homewood campus.'' We can all 
agree that college students who are better educated in the basics of 
the financial system will be less susceptible to falling into serious 
credit card debt.
  Special attention should also be paid to immigrants, often of modest 
means who send, or remit, a significant portion of their income to 
family in their country of origin. According to a recent study by the 
Inter-American Development Bank, in the aggregate $32 billion was 
remitted out of America last year, with over $10 billion going to 
Mexico alone. It is estimated that nearly 70 percent of all Hispanic 
immigrants send money home. The financial transaction of sending money 
internationally is complex: there are transaction fees, currency 
conversion fees and exchange rate spreads. The full costs can range up 
to $50 even when the amount being sent home is $300. A survey by 
Bendixen and Associates estimated that \2/3\ of Hispanic immigrants who 
send money home are unaware of the full costs. Before the Banking 
Committee, Mr. Bendixen testified that, ``When these immigrants were 
informed that besides a fee paid in the U.S., international money 
transfer companies often provide unfavorable exchange rates or discount 
additional commissions or charges in Latin America, a large majority of 
them felt that the fees paid for the service are excessive and unfair. 
Customers should have

[[Page S10060]]

access to information about the full costs of their transactions, and 
they need a level of financial literacy that enables them to interpret 
the information. Only then will they be able to shop effectively, 
compare costs, and make wise financial choices.
  Increased financial education is a first step in the consumer 
education process but as Federal Reserve vice-Chairman Roger Ferguson 
testified before the Committee, ``legislation, careful regulation and 
education are all components of the response to these emerging consumer 
concerns.'' The legislation I introduce today will make a significant 
contribution to improving the quality of financial education in this 
country. It is modeled closely on the Trade Promotion Coordinating 
Committee established by the Export Enhancement Act of 1992.
  A number of Senators have taken a strong interest in this issue. 
Senator Corzine is a co-sponsor of this legislation and has been 
actively involved on the issue. I particularly want to acknowledge the 
outstanding leadership of Senators Stabenow and Enzi as well as Senator 
Akaka. I know that Senators Stabenow and Enzi are working on a bill and 
I look forward to working closely with them.
  I also want to express my appreciation to Senate Banking Committee 
Chairman Shelby for the time and attention is devoting to this subject. 
Tomorrow Chairman Shelby is holding a hearing in the Committee on 
``Consumer Awareness and Understanding of the Credit Granting 
Process.'' These issues are directly related.
  I ask unanimous consent that a summary of the Financial Literacy and 
Education Coordinating Act and the bill be printed in the Record 
together with letters in support of the bill. I urge my colleagues to 
work toward speedy enactment of meaningful legislation to improve the 
financial literacy and education of all Americans.
  There being no objection, the summary and letters of support were 
ordered to be printed in the Record, as follows:

       Financial Literacy and Education Coordinating Act of 2003

       This legislation establishes an interagency Committee, 
     based in the Department of the Treasury, with assistance 
     provided by Treasury's Office of Financial Education. The 
     Committee shall be chaired by the Secretary of the Treasury 
     and charged with coordinating governmental financial literacy 
     initiatives and developing a national strategy, in 
     cooperation with state and local governments, and non-profit 
     and private enterprises, to improve financial education and 
     literacy of all Americans.
       The Committee initially includes representatives from the 
     Federal Reserve Board, the Federal Deposit Insurance 
     Corporation, the Securities and Exchange Commission, the 
     Office of the Comptroller of the Currency, the Office of 
     Thrift Supervision, the National Credit Union Administration, 
     the Departments of Treasury, Agriculture, Defense, Education, 
     Health and Human Services, Labor, Veterans Affairs, the 
     Social Security Administration, the Federal Trade Commission, 
     the Commodities Futures Trading Commission, and the Office of 
     Personnel Management. The chairperson has the authority to 
     include other agencies and departments that are engaged in a 
     serious effort to improve the state of financial literacy and 
     education among any group of Americans. The Committee shall 
     meet no less than quarterly.
       There is substantial evidence that many Americans do not 
     have an adequate basis for making sound decisions about their 
     personal and household finances, especially given the myriad 
     choices of financial products and services available to them. 
     A more comprehensive financial education would help provide 
     individuals with the necessary tools to create household 
     budgets, initiative savings plans, manage debt, and make 
     strategic investment decisions for education, retirement, 
     home ownership or other savings goals. While increased levels 
     of financial literacy and education are critically important, 
     improved financial decision making by consumers, not simply 
     improved knowledge, should be the most important financial 
     education goal.
       The Committee is required to: review financial literacy and 
     education efforts throughout the federal government; identify 
     and remove duplicative financial literacy efforts within the 
     federal government; coordinate and promote financial literacy 
     efforts including partnerships between federal, state and 
     local governments, non-profit organizations and private 
     enterprises; develop within one year a national strategy to 
     promote financial literacy and education among all Americans; 
     develop and implement the strategy with the participation of 
     non-profit and private sector institutions; coordinate 
     efforts towards the implementation of the strategy; and 
     submit an annual report, providing testimony if requested, to 
     Congress detailing the state of financial literacy and 
     education as it relates to the strategy.
                                  ____



                               Consumer Federation of America,

                                                    July 25, 2003.
     Hon. Paul S. Sarbanes,
     Ranking Member, Committee on Banking, Housing and Urban 
         Affairs, U.S. Senate, Washington, DC.
       Dear Senator Sarbanes, the Consumer Federation of America 
     commends you for introducing legislation to boost financial 
     awareness and improve financial decision-making by Americans. 
     There has never been a greater need to advance financial 
     education. CFA strongly supports the creation of the 
     Financial Literacy and Education and Coordinating Committee 
     within the Department of the Treasury, as called for in this 
     bill, and looks forward to working with you to enact this 
     timely legislation.
       The financial education needs of the least affluent and 
     well-educated Americans are especially pressing, in part 
     because recent changes in the financial services marketplace 
     have increased the vulnerability of these households. In 
     particular, the dramatic expansion of high-cost and sometimes 
     predatory lending to moderate and lower income Americans in 
     the last decade has put many of these people at great 
     financial risk. Because these individuals lack financial 
     resources and often are charged high prices, they cannot 
     afford to make poor financial choices. But because of low 
     general and financial literacy levels, they often have 
     difficulty making smart financial decisions, in part because 
     they are especially vulnerable to abusive seller practices.


   This Legislation Would Establish Effective Federal Leadership on 
                          Financial Education

       While many worthwhile financial education programs exist, 
     they are not well-coordinated, effectively reach only a small 
     minority of the population, and do not reflect any broad, 
     compelling vision. Many focus only on increasing consumer 
     knowledge of how to best operate in the financial services 
     marketplace, and not on actually changing consumer behavior 
     to improve decisions about spending, saving, and the use of 
     credit. Moreover, there is no clear consensus about how to 
     effectively provide financial education, especially to those 
     who have completed their secondary education and to those 
     with low literacy levels. What is most needed is a 
     comprehensive needs assessment and plan to guide and inspire 
     financial educators and their supporters. Such a plan could 
     also convince a broad array of government, business and 
     nonprofit groups to work together to persuade the nation to 
     implement that plan.
       This legislation recognizes that, for any comprehensive 
     plan to win broad public and private support and 
     participation, the federal government must provide 
     leadership. The bill would give the Department of Treasury 
     the authority to establish a federal governmental network to 
     coordinate financial literacy efforts and requires every 
     relevant agency to participate at a high level, including the 
     Securities and Exchange Commission, the Department of 
     Education, the Federal Reserve, and the Department of 
     Defense. It emphasizes the importance of assessing the 
     federal government's capacity for promoting financial 
     literacy. It requires the Coordinating Committee to evaluate 
     different financial programs and strategies and identify 
     those that are most effective in improving consumer decision 
     making--not just awareness. It makes the Coordinating 
     Committee directly accountable to Congress for its activities 
     and accomplishments. Most importantly, it requires the 
     Coordinating Committee to develop and implement a national 
     strategy to promote basic financial literacy, with broad 
     input from business, educational and nonprofit leaders.


     lower income consumers need better financial literacy efforts

       There is no large population that would benefit more from 
     improved financial education than the tens of millions of the 
     least affluent and well-educated Americans. In 1998, 37 
     percent of all households had incomes under $25,000. With the 
     exception of older persons who had paid off home mortgages, 
     these households had accumulated few assets. In 1998, 
     according to the Federal Reserve Board's Survey of Consumer 
     Finances, most of these least affluent households had net 
     financial assets (excluding home equity) of less than $1,000. 
     Moreover, between 1995 and 1998, a time of rising household 
     incomes, the net worth of lower-income households actually 
     declined.
       For lower income households with few discretionary 
     financial resources, failing to adequately budget 
     expenditures may pressure these consumers into taking out 
     expensive credit card or payday loans. Mistakenly purchasing 
     a predatory mortgage loan could cost them most of their 
     economic assets.
       These households also need to make smart buying decisions 
     because they tend to be charged higher prices than more 
     affluent families: higher homeowner and auto insurance rates 
     because they live in riskier neighborhoods; higher loan rates 
     because of their low and often unstable incomes; higher 
     furniture and appliance prices from neighborhood merchants 
     that lack economies of scale and face relatively high costs 
     of doing business; and higher food prices in their many 
     neighborhoods without stores from major supermarket chains. 
     Lower-income families are also faced with higher prices for 
     basic banking services and they lack access to essential 
     savings options.

[[Page S10061]]

       Lower-income households with low literacy levels are 
     especially vulnerable to seller abuse. Consumers who do not 
     understand percentages may well find it impossible to 
     understand the costs of mortgages, home equity, installment, 
     and credit card, payday, and other high-cost loans. 
     Individuals who do not read well may find it difficult to 
     check whether the oral promises of salespersons were written 
     into contracts. And, those who do not write fluently are 
     limited in their ability to resolve problems by writing to 
     merchants or complaint agencies. Consumers who do not speak, 
     read, or write English well face special challenges 
     obtaining good value in their purchases.


     More Available Credit Has Increased Financial Education Needs

       Over the past decade, the financial vulnerability of low- 
     and moderate-income households has increased simply because 
     of the dramatic expansion of the availability of credit. The 
     loans that subjected the greatest number of Americans to 
     financial risk were made with credit cards. From 1990 to 
     2000, fueled by billions of mail solicitations annually and 
     low minimum monthly payments of 2-3 percent, credit card debt 
     outstanding more than tripled from about $200 billion to more 
     than $600 billion. Just as significantly, the credit lines 
     made available just to bankcard holders rose to well over $2 
     trillion. By the middle of the decade, having saturated 
     upper- and middle-class markets, issuers began marketing to 
     lower-income households. By the end of the decade, an 
     estimated 80 percent of all households carried at least one 
     credit card. Independent experts agree that expanding credit 
     card debt has been the principal reason for rising consumer 
     bankruptcies.
       Also worrisome has been the expansion of high-priced 
     mortgage loans and stratospherically-priced smaller consumer 
     loans. In the 1990s, creditors began to aggressively market 
     subprime mortgage loans carrying interest rates greater than 
     10 percent and higher fees than those charged on conventional 
     mortgage loans. By 1999, the volume of subprime mortgage 
     loans peaked at $160 billion. Mortgage borrowers in low-
     income neighborhoods were three times more likely to have 
     subprime loans than mortgage borrowers in high-income 
     neighborhoods. A significant minority of these subprime 
     borrowers would have qualified for much less expensive 
     conventional mortgage loans. Some of these borrowers were 
     victimized by exorbitantly priced and frequently refinanced 
     predatory loans that ``stripped equity'' from the homes of 
     many lower-income households.
       The 1990s also saw explosive growth in predatory small 
     loans--payday loans, car title pawn, rent-to-own, and refund 
     anticipation loans--typically carrying effective interest 
     rates in triple digits. The Fannie Mae Foundation estimates 
     that these ``loans'' annually involve 280 million 
     transactions worth $78 billion and carrying $5.5 billion in 
     fees. The typical purchaser of these financial products has 
     income in the $20,000 to $30,000 range with a 
     disproportionate number being women.
       Both proper regulation and education are necessary to 
     insure that lower and moderate income Americans are not 
     subject to abusive lending practices and that they have the 
     knowledge to make effective decisions in an increasingly 
     complex financial services marketplace. We applaud you for 
     proposing this comprehensive and achievable vision for 
     improving financial awareness and decision-making. We look 
     forward to working with you and leaders in the House of 
     Representatives to put such an approach in law as soon as 
     possible.
           Sincerely,
                                               Travis B. Plunkett,
     Legislative Director.
                                  ____



                                                         AARP,

                                                    July 28, 2003.
     Hon. Paul Sarbanes,
     Ranking Member, Committee on Banking, Housing and Urban 
         Affairs, U.S. Senate, Washington, DC.
       Dear Senator Sarbanes: AARP is pleased to offer our support 
     for your legislation, the ``Financial Literacy and Education 
     Coordinating Act of 2003,'' that will begin to address this 
     nation's need to improve financial literacy.
       Last year, at the Senate Banking Committee's hearing on the 
     status of financial literacy and education in America, AARP 
     President Tess Canja documented in her testimony the need for 
     a coherent and coordinated national strategy to make 
     available a well-researched and well-evaluated progression of 
     financial literacy programs and services. Your legislation 
     establishes a permanent inter-agency platform for developing 
     a national financial literacy strategy, and it will begin to 
     provide the necessary coordination to integrate and to help 
     deliver educational and training programs that already exist 
     at the federal, state and local levels. For example, the 
     Congress is working to expand the availability of credit 
     reports and credit scores to all Americans. This is critical 
     information for consumers, but it does not become effective 
     knowledge until it is understood.
       The dramatic loss in stock market valuations in recent 
     years highlights the financial vulnerability facing many 
     retired Americans. The haunting prospect of an underinformed 
     generation of Baby-Boomers nearing retirement age suggest 
     that there is little time to waste in developing, testing and 
     arraying improved financial education and training services.
       We look forward to actively working with you to enact the 
     ``Financial Literacy and Education Coordination Act of 
     2003.'' If there are further questions, please do not 
     hesitate to call upon me, or have your staff contact Roy 
     Green of our Federal Affairs staff at (202) 434-3800.
           Sincerely,
                                                Michael W. Naylor,
     Director of Advocacy.
                                  ____

                                      National Council on Economic


                                                    Education,

                                                    July 25, 2003.
     Hon. Paul Sarbanes,
     U.S. Senator, Dirksen Building, Washington, DC.
       Dear Senator Sarbanes: We at the National Council on 
     Economic Education (NCEE) strongly endorse the Financial 
     Literacy and Education Coordination Committee Act. This Act, 
     which proposes establishing a committee chaired by the 
     Secretary of the Treasury, to coordinate the activities of 
     all Federal Agencies with an interest in financial and 
     literacy, could not come at a better time.
       This is a time of growing public interest in financial 
     education. Parents everywhere want their children to know how 
     the world works before they go to work in it, and to possess 
     the basic knowledge and decision-making skills that will help 
     them to become productive and responsible citizens, 
     employees, consumers, savers and investors.
       In response to the growing interest in financial literacy, 
     a number of government agencies have set up departments 
     focusing on this issue. In our opinion, the fact that the 
     Coordinating Committee will bring the various departments 
     together will reduce duplication of much needed resources, 
     and get new programs into the community more quickly. We also 
     understand that the Coordinating Committee will work with 
     non-profits, and state and local organizations--both private 
     and public--to develop strategies for improving financial 
     literacy. We welcome this inclusive approach to getting a 
     sound economic education into the hands of our young people.
       The NCEE is pleased to support the Financial Literacy and 
     Education Coordination Committee Act. Please keep us informed 
     of its progress.
           Yours sincerely,
                                                 Robert F. Duvall,
     President & Chief Executive Officer.
                                  ____

                                                Howard University,


                                      Office of the President,

                                    Washington, DC, July 25, 2003.
     Hon. Paul S. Sarbanes,
     Committee on Banking, Housing, and Urban Affairs, Senate 
         Dirksen Building, Washington, DC.
       Dear Senator Sarbanes: Last year, as a representative of 
     higher education and Historically Black Colleges and 
     Universities, I testified before the Committee in support of 
     its proposed national strategy to promote financial literacy 
     and education. Today, I remain steadfast in my advocacy of 
     this initiative.
       Financial illiteracy continues to plague many American: an 
     unfortunate reality that further underscores the urgent need 
     for The Financial Literacy and Education Coordinating Act. It 
     provides the most effective solution to establishment of a 
     nationwide program that will protect and educate our 
     citizens.
       Although financial literacy should be a lifelong program 
     beginning in elementary school, I believe that higher 
     education has a special responsibility to ensure that 
     students in postsecondary institutions develop sound 
     financial competency as early in their college careers as 
     possible.
       The typical college graduate leaves school with an average 
     of $19,400 in student loans. Throughout their matriculation, 
     students are routinely bombarded by aggressive credit card 
     companies who entice them with offers of free gifts and easy 
     credit. The addition of credit card debt creates an 
     overwhelming burden on recent graduates.
       Promoting financial education for our youth is consistent 
     with Howard University's core values. The University, in 
     collaboration with other organizations--including our 
     strategic partner Fannie Mae--is addressing the national 
     financial literacy problem as it relates to African Americans 
     and other minorities, who are already disadvantaged by the 
     wealth gap. Howard believes that the ability to make informed 
     financial decisions is an increasingly important skill.
       We have introduced a number of initiatives to empower our 
     students and members of the community by teaching them the 
     importance of effectively managing their money and improving 
     their credit so that the dream of homeownership and other 
     personal financial opportunities can become a reality.
       We now look to the Congress to enact legislation that will 
     buttress our efforts in this regard. The Financial Literacy 
     and Education Coordinating Act is indeed representative of a 
     worthy, collective, non-partisan effort that will have a 
     lasting impact on generations to come.
           Respectfully,
                                               H. Patrick Swygert,
                                                        President.

  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

[[Page S10062]]

                                S. 1470

       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 and 
     Education Coordinating Act of 2003''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) there is substantial evidence that many Americans do 
     not have an adequate basis for making sound decisions about 
     personal and household finances;
       (2) financial education could play a critical role in 
     equipping consumers with the knowledge to make wise 
     decisions, especially for lower income consumers and those 
     underserved by the mainstream financial system;
       (3) an increased awareness of the availability of credit 
     scores and credit reports, the process of accessing them, 
     their significance in obtaining credit, and their effects on 
     credit terms, are of paramount importance to consumers;
       (4) easily accessible and affordable resources which inform 
     and educate investors as to their rights and avenues of 
     recourse should be provided when an investor believes his or 
     her rights have been violated by unprofessional conduct of 
     market intermediaries;
       (5) a basic understanding of the operation of the financial 
     services industry would help consumers and their families to 
     make more informed choices about how best to progress 
     economically, avoid harmful personal debt, avoid 
     discriminatory and predatory practices, invest wisely, 
     develop financial planning skills necessary for maximizing 
     short- and long-term financial well being, and better prepare 
     for retirement;
       (6) comprehensive financial education would help to provide 
     individuals with the necessary tools to create household 
     budgets, initiate savings plans, manage debt, and make 
     strategic investment decisions for education, retirement, 
     home ownership, or other savings goals; and
       (7) improved financial decision making, not simply more 
     knowledge, should be the primary financial education goal.

     SEC. 3. FINANCIAL LITERACY AND EDUCATION COORDINATING 
                   COMMITTEE.

       (a) Establishment.--The Secretary of the Treasury shall 
     establish within the Office of Financial Education of the 
     Department of the Treasury, the Financial Literacy and 
     Education Coordinating Committee (in this Act referred to as 
     the ``Committee'').
       (b) Purposes.--The purposes of the Committee shall be--
       (1) to coordinate financial literacy and education efforts 
     among Federal departments and agencies;
       (2) to develop and implement a national strategy to promote 
     basic financial literacy and education among all Americans;
       (3) to reduce overlap and duplication in Federal financial 
     literacy and education activities;
       (4) to identify the most effective types of public sector 
     financial literacy programs and techniques, as measured by 
     improved consumer decision making;
       (5) to coordinate and promote financial literacy efforts at 
     the State and local level, including partnerships among 
     Federal, State, and local governments, nonprofit 
     organizations, and private enterprises; and
       (6) to carry out such other duties as are deemed to be 
     appropriate, consistent with this Act.

     SEC. 4. COMMITTEE DUTIES.

       (a) In General.--The Committee shall--
       (1) not later than 1 year after the date of enactment of 
     this Act, develop a national strategy to promote basic 
     financial literacy among all American consumers;
       (2) coordinate Federal efforts to implement the strategy 
     developed under paragraph (1);
       (3) not later than 1 year after the date of enactment of 
     this Act, and annually thereafter, submit a report to the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate and the Committee on Financial Services of the House 
     of Representatives regarding actions taken and progress made 
     by the Committee in carrying out this Act during the 
     reporting period, and any challenges remaining to 
     implementation of such purposes; and
       (4) provide testimony by the chairperson of the Committee 
     to either Committee referred to in paragraph (3), upon 
     request.
       (b) Strategy.--The strategy to promote basic financial 
     literacy required to be developed under subsection (a)(1) 
     shall provide for--
       (1) participation by State and local governments and 
     private, nonprofit, and public institutions in the creation 
     and implementation of such strategy;
       (2) the development of methods--
       (A) to increase the general financial education level of 
     current and future consumers of financial services and 
     products; and
       (B) to enhance the general understanding of financial 
     services and products;
       (3) review of Federal activities designed to promote 
     financial literacy and education and development of a plan to 
     improve coordination of such activities;
       (4) the identification of areas of overlap and duplication 
     among Federal financial literacy and education activities and 
     proposed means of eliminating any such overlap and 
     duplication; and
       (5) a proposal to the President of a Federal financial 
     literacy and education budget that supports such strategy and 
     eliminates funding for such areas of overlap and duplication.

     SEC. 5. COMMITTEE MEMBERSHIP.

       (a) Composition.--The Committee shall be comprised of--
       (1) the Secretary of the Treasury, who shall serve as the 
     chairperson of the Committee; and
       (2) a representative from--
       (A) each Federal banking agency (as defined in section 3 of 
     the Federal Deposit Insurance Act), the National Credit Union 
     Administration, the Securities and Exchange Commission, each 
     of the Departments of Education, Agriculture, Defense, Health 
     and Human Services, Labor, and Veterans Affairs, the Social 
     Security Administration, the Federal Trade Commission, the 
     Commodity Futures Trading Commission, and the Office of 
     Personnel Management; and
       (B) a representative from any other department or agency 
     that the Secretary determines to be engaged in a serious 
     effort to improve financial literacy and education.
       (b) Assistance.--The Director of the Office of Financial 
     Education of the Department of the Treasury shall provide to 
     the Committee, upon request, such assistance as may be 
     necessary.
       (c) Member Qualifications.--Members of the Committee shall 
     be appointed by the heads of their respective departments or 
     agencies. Each member and each alternate designated by any 
     member unable to attend a meeting of the Committee, shall be 
     an individual who exercises significant decisionmaking 
     authority.
       (d) Meetings.--Meetings of the Committee shall occur not 
     less frequently than quarterly, and at the call of the 
     chairperson.
       (e) Consultation.--The Committee shall consult with private 
     and nonprofit organizations and State and local agencies, as 
     determined appropriate by the chairperson and the Committee.
                                 ______