[Congressional Record Volume 151, Number 53 (Wednesday, April 27, 2005)]
[Senate]
[Pages S4418-S4419]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CORZINE (for himself, Mr. Akaka, Ms. Stabenow, Mr. 
        Lautenberg, and Mr. Obama):
  S. 923. 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 for Needy Families (TANF) 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 to introduce the TANF 
Financial Education Promotion Act of 2005 in order to call attention to 
an important issue for low-income families financial literacy. I am 
proud to be reintroducing this bill during the month of April, which is 
Financial Literacy Month.
  One of the goals of the Temporary Assistance for Needy Families 
(TANF) Program is to help low-income families transition from welfare 
to work. However, there is more to leaving poverty than just finding a 
job. Welfare recipients must learn the skills that will help them build 
savings and establish good credit so that they can stay off welfare. 
Currently, TANF does not offer financial education to low-income 
individuals, leaving welfare recipients at risk of dependence upon 
public assistance.
  Furthermore, millions of low-income families, including families 
receiving TANF, are unbanked. These households tend to do their banking 
at check-cashing outlets that charge exorbitant fees for such services. 
A lack of basic consumer finance education, including lack of 
familiarity with how a checking or savings account works, has been 
cited as a major reason why millions of Americans do not set up such 
accounts.
  Not only are low-income people more likely to be unbanked than other 
individuals, but they are also the most vulnerable to abusive lending 
practices and hostile credit arrangements. Those with the fewest 
financial resources end up paying the most to obtain financing. 
Financial education that addresses predatory lending will help prevent 
low-income families from becoming victims of unaffordable loan 
payments, equity stripping, and foreclosure.
  Burdened by significant financial needs, welfare recipients need 
practical information on the fundamentals of saving, household 
budgeting, taxes, and credit. With this knowledge, individuals will be 
better equipped to move toward self-sufficiency and maintain financial 
independence.
  The TANF Financial Education Promotion Act makes strides in financial 
literacy for welfare recipients by requiring states to use 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.
  I am not alone in advocating financial literacy for TANF recipients. 
Federal Reserve Chairman Alan Greenspan has said, ``Educational and 
training programs may be the most critical service offered by 
community-based organizations to enhance the ability of lower-income 
households to accumulate assets.''
  I urge my colleagues to join me in helping the most vulnerable 
families in the United States get access to the tools they will need to 
successfully make the transition from welfare to work.
  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:

                                 S. 923

       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 2005''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) Most recipients of assistance under the Temporary 
     Assistance for Needy Families (TANF) 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 TANF 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.''.

[[Page S4419]]

       (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, 2005.
                                 ______