S 2628 IS

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.

June 17, 2002

Mr. CORZINE (for himself, Mr. TORRICELLI, and Mr. KENNEDY) introduced the following bill; which was read twice and referred to the Committee on Finance

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.

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 2002'.

SEC. 2. FINDINGS.

Congress makes the following findings:

(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)' 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, 2002.

END