[Congressional Record Volume 149, Number 116 (Thursday, July 31, 2003)]
[Senate]
[Pages S10658-S10661]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. STABENOW (for herself, Mr. Enzi, Mr. Johnson, Mr. Hagel, 
        Mr. Schumer, Mr. Bayh, Mr. Carper, and Mr. Corzine):
  S. 1532. A bill to establish the Financial Literacy Commission, and 
for other purposes; to the Committee on Banking, Housing, and Urban 
Affairs.
  Ms. STABENOW. Mr. President, I rise today to introduce the Financial 
Literacy Community Outreach Act of 2003. This bill, which I am proud to 
introduce with my colleague and friend, Mr. Enzi, is the product of 
several months of work. We have reached out to financial literacy 
advocates, financial institutions, Federal agencies, and other 
interested parties to craft a comprehensive bill to streamline, 
augment, and improve our government's approach to financial literacy.
  The need for this legislation is clear. Studies show alarming 
shortcomings in the state of financial literacy in America. For 
example, 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. A study 
by the Jump$tart Coalition for Personal Financial Literacy found that, 
in 2002, on average, high school seniors could correctly answer only 
about 50 percent of a set of financial answers put to them a failing 
grade.
  In addition, from 1990 to 2000, the outstanding credit card debt 
among households more than tripled from $200 billion to $600 billion. 
And, a 2002 study by John Hancock found that, in a study it did, 50 
percent of respondents said they spend half an hour or less per month 
managing their retirement funds.
  These are all very disturbing statistics and, just a few examples of 
why I feel the need to act to improve our government's approach to this 
problem. We need a clear and effective strategy to address these 
problems.
  The Federal Government understands that financial literacy is 
essential to a healthy economy and the protection of consumers. That is 
why many Federal departments and agencies have employed their resources 
and expertise to educate the public about how to accomplish such goals 
as realizing the dreams of homeownership, saving for a child's college 
education, and planning for a secure retirement. These agencies do this 
through grant programs, through special training, and by developing 
financial literacy materials.
  Unfortunately, what Mr. Enzi and I, as well as others active on this 
issue, have come to realize is that these programs are uncoordinated 
and, in some places, duplicative. There is no mechanism for these 
agencies to interact and assess the good work they are doing. That is 
why, in our legislation, we set up a Federal Financial Literacy 
Commission.
  Made up of Federal decision makers with jurisdiction over one or more 
financial literacy programs, including the Federal Reserve, the FDIC, 
the Treasury Department, the Department of Housing and Urban 
Development, the Securities and Exchange Commission, and the Small 
Business Administration, our Commission, and its constituent members, 
will take all necessary steps to coordinate, streamline and improve 
existing programs. The Commission will also make recommendations to 
Congress on legislation that may be needed to improve financial 
education.
  I am pleased to say that this new Commission will operate as a nexus 
for all Federal financial literacy materials, grants, and information; 
spearhead efforts to reach out to the public with financial literacy 
messages; manage a toll free hotline; operate a website promoting 
financial literacy and highlighting Federal grants, materials, and 
programs; and, it may feature private and non-profit resources 
available to the public.
  Improving the state of financial literacy is a common sense thing to 
do. It is something that we can do through cooperation and strategic 
thinking about our Federal resources. And, it can be done with the 
input of all concerned interests. Many people in the Senate have worked 
diligently on the subject of financial literacy, including Mr. 
Sarbanes, the Ranking Member of the Banking, Housing, and Urban Affairs 
Committee who has done important work on this subject.
  I am pleased that Mr. Enzi is the lead Republican sponsor of this 
legislation; he is a true leader and cares passionately about this 
issue. And, I appreciate the leadership of the bipartisan group of 
Senators who have agreed to cosponsor our bill: Mr. Hagel, Mr. Johnson, 
Mr. Schumer, Mr. Bayh, Mr. Carper, and Mr. Corzine. I look forward to 
working with them and all of my other colleagues in the Senate to 
ensure that we have an effective, coordinated, and comprehensive 
Federal approach to improving financial literacy in our country.
  I ask unanimous consent that the text of this legislation be printed 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1532

       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;

[[Page S10659]]

       (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,

[[Page S10660]]

     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.

  Mr ENZI. Mr. President, the U.S. economy is still the greatest 
economy in the world and our credit markets have helped to make that 
happen. During the past decade, our credit markets have taken advantage 
of technology and innovation in order to provide more consumers with 
more timely credit approvals and with more financing options. Nowhere 
is there a better example of this than our housing market.
  Today, the time it takes to review a mortgage application and approve 
it has been cut drastically by our financial institutions. Consumers 
find that they have a wide array of financing options they can choose 
from to secure the purchase of a home--from fixed-rated loans to 
variable-rate loans, or even adjustable rate loans. While the wide 
variety of choices has helped more families to purchase homes in the 
past decade, even more families could buy homes if they understood how 
the credit market works.
  Although there are many pluses to the expansion of the availability 
of credit there is also a downside. Individuals may get in over their 
heads when too much credit is made available to them. In addition, 
identity theft is a bigger problem than it has been before. Consumers 
need to educate themselves about the potential problems they might face 
and how to avoid them. Increasing consumer financial literacy is not 
just about providing information, however, it is about giving families 
the proper informational tools so that they can put their financial 
affairs in order.
  Today, my friend and colleague, Senator Stabenow and I are 
introducing the ``Financial Literacy Community Outreach Act'' to help 
to bring together all of the federal government's financial literacy 
programs under one roof.
  The Department of Treasury, the Federal Deposit Insurance 
Corporation, the Federal Trade Commission, the Securities and Exchange 
Commission, the Department of Housing and Urban Development, and the 
Department of Labor are just a few of the many federal agencies that 
have established excellent financial literacy programs and initiatives. 
These programs cover a wide variety of topics ranging from how to save, 
spend, and invest to programs that provide guidance on how to prepare 
for retirement, select a pension plan, or purchase a home. Still others 
help individuals avoid the threat of identity theft.
  Unfortunately, consumers attempting to find financial literacy 
information from the federal government may find that information 
scattered throughout the government. Our bill would provide a one-stop-
shop where consumers could find the appropriate financial literacy 
programs for their needs. A single web site and a toll-free number will 
go a long way toward bringing this vital information to the individuals 
and families who need it.
  In addition, the bill establishes the Financial Literacy Commission, 
a body comprised of the heads of the federal agencies with financial 
literacy programs. The Commission will ensure that the federal 
government has a cohesive and coordinated federal policy on financial 
literacy as it provides Congress with vital information on what can be 
improved in our government's financial literacy outreach efforts. In 
addition to the web site and the toll-free number, the Commission will 
highlight successful public/private partnerships already existing 
around the country.
  One such partnership is thriving in my home state of Wyoming. The 
Wyoming Partners in HomeBuyer Education, led by the Wyoming Community 
Development Authority, includes local banks, real estate agents, the 
University of Wyoming, the U.S. Department of Agriculture, the U.S. 
Department of Housing and Urban Development, and Fannie Mae, in the 
effort to provide distance learning to potential home-buyers through 
the use of compressed video technology. This training program is 
perfect for a state like Wyoming in that home-buyers in rural 
communities have access to all of the essential elements of the home 
buying experience just like their urban community counterparts.
  To date, more than 3,000 individuals have completed the training 
program and it has led to making the home-buying process easier and 
more understandable for rural and urban families alike.
  I strongly believe that this bill will help millions of families find 
the appropriate financial literacy materials they need to make better 
credit and investment decisions.

[[Page S10661]]

  It is my pleasure to be cosponsoring this bill with Senator Stabenow 
because of our shared concern about making financial literacy available 
to more families across the country. In addition, I would like to 
recognize Senator Sarbanes' tremendous effort to focus our attention on 
financial literacy, both when he was Chairman of the Committee on 
Banking, Housing and Urban Affairs last year and as Ranking Member of 
the Committee this year. He has been an extraordinary advocate for this 
important issue. Chairman Shelby of the Committee has also recognized 
the importance of this issue, as just this week, it was the subject of 
a hearing by the Committee. I look forward to working with my 
colleagues on the Committee and in the full Senate to ensure that we 
expand and build upon the government's present financial literacy 
efforts to help individuals and families increase their knowledge of 
and access to our credit and investment markets.
                                 ______