Young Americans Financial Literacy Act

I 118TH CONGRESS 1ST SESSION H. R. 2821 To establish a grant program in the Bureau of Consumer Financial Protection to fund the establishment of centers of excellence to support research, development and planning, implementation, and evaluation of effective programs in financial literacy education for young people and families ages 8 through 24 years old, and for other purposes. IN THE HOUSE OF REPRESENTATIVES APRIL 25, 2023 Mr. CARSON (for himself, Ms. LEE of California, Ms. BARRAGA´N, Mrs. BEATTY, Mr. BLUMENAUER, Ms. BROWN, Mr. CARBAJAL, Mr. CARTER of Louisiana, Mr. CASE, Mr. GARCI´A of Illinois, Ms. GARCIA of Texas, Mr. COHEN, Ms. CROCKETT, Mr. DAVIS of Illinois, Ms. DEAN of Pennsyl- vania, Mr. DESAULNIER, Mr. ESPAILLAT, Mr. EVANS, Ms. WILSON of Florida, Mrs. HAYES, Ms. NORTON, Mr. KEATING, Ms. KUSTER, Mr. MCGOVERN, Ms. OMAR, Mr. SMITH of Washington, Ms. JACOBS, Mr. JOHNSON of Georgia, Mr. SABLAN, Ms. SCHOLTEN, Mr. SOTO, Mr. THOMPSON of Mississippi, Ms. TITUS, Ms. TLAIB, Ms. TOKUDA, Mr. TORRES of New York, Mr. TRONE, Mr. VEASEY, and Mrs. WATSON COLEMAN) introduced the following bill; which was referred to the Com- mittee on Financial Services, and in addition to the Committee on Edu- cation and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall with- in the jurisdiction of the committee concerned A BILL To establish a grant program in the Bureau of Consumer Financial Protection to fund the establishment of centers of excellence to support research, development and plan- ning, implementation, and evaluation of effective pro- grams in financial literacy education for young people VerDate Sep 11 2014 22:52 May 01, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H2821.IH H2821 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 2821 IH and families ages 8 through 24 years old, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Young Americans Fi- 4 nancial Literacy Act’’. 5 SEC. 2. FINDINGS. 6 The Congress finds as follows: 7 (1) That 88 percent of Americans believe fi- 8 nance education should be taught in schools and 92 9 percent of K–12 teachers believe that financial edu- 10 cation should be taught in school, but only 12 per- 11 cent of teachers actually teach the subject. 12 (2) According to a 2020 survey, less than half 13 of States require high school students to take a 14 course on personal finance, and less than 17 percent 15 of high schoolers were required to take a one semes- 16 ter personal finance course. 17 (3) For the fourth year in a row, more than 18 one-third of surveyed consumers gave themselves a 19 ‘‘B’’ when grading their own level of basic financial 20 literacy. Less than one-fifth of Americans gave 21 themselves an ‘‘A’’. Most adults feel that their finan- 22 cial literacy skills are inadequate, yet they do not 23 rely on anyone else to handle their finances; they 24 VerDate Sep 11 2014 22:52 May 01, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2821.IH H2821 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 2821 IH feel it is important to know more but have received 1 no financial education. 2 (4) The sudden disruptions caused by the 3 spread of COVID–19 are presenting economic chal- 4 lenges with growing consequences. While some fac- 5 tors affecting financial well-being are beyond indi- 6 vidual control, financial literacy can help people bet- 7 ter manage their finances through times of hardship. 8 (5) It is necessary to respond immediately to 9 the pressing needs of individuals faced with the loss 10 of their financial stability; however increased atten- 11 tion must also be paid to financial literacy education 12 reform and long-term solutions to prevent future 13 personal financial disasters. 14 (6) There is an urgent need to respond to the 15 COVID–19 economic recovery with research-based 16 financial literacy education programs to reach indi- 17 viduals at all ages and socioeconomic levels, particu- 18 larly those facing unique and challenging financial 19 situations, such as high school graduates entering 20 the workforce, soon-to-be and recent college grad- 21 uates, young families, and the unique needs of mili- 22 tary personnel and their families. 23 (7) High school and college students who are 24 exposed to cumulative financial education show an 25 VerDate Sep 11 2014 22:52 May 01, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2821.IH H2821 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 2821 IH increase in financial knowledge, which in turn drives 1 increasingly responsible behavior as they become 2 young adults. 3 (8) The majority (52 percent) of young adults 4 between the ages of 23–28 consider ‘‘making better 5 choices about managing money’’, the single most im- 6 portant issue for individual Americans to act on 7 today. 8 (9) According to the Government Accountability 9 Office, giving Americans the information they need 10 to make effective financial decisions can be key to 11 their well-being and to the country’s economic 12 health. The current pandemic, in which 88 percent 13 of Americans say is causing stress on their personal 14 finances, underscores the need to improve individ- 15 uals’ financial literacy and empower all Americans to 16 make informed financial decisions. This is especially 17 true for young people as they are earning their first 18 paychecks, securing student aid, and establishing 19 their financial independence. Therefore, focusing 20 economic education and financial literacy efforts and 21 best practices for young people between the ages of 22 8–24 is of utmost importance. 23 VerDate Sep 11 2014 22:52 May 01, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2821.IH H2821 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 2821 IH SEC. 3. AUTHORIZATION FOR FUNDING THE ESTABLISH- 1 MENT OF CENTERS OF EXCELLENCE IN FI- 2 NANCIAL LITERACY EDUCATION. 3 (a) IN GENERAL.—The Consumer Financial Protec- 4 tion Act of 2010 (12 U.S.C. 5481 et seq.) is amended— 5 (1) by redesignating section 1037 as section 6 1038; and 7 (2) by inserting after section 1036 the fol- 8 lowing: 9 ‘‘SEC. 1037. AUTHORIZATION FOR FUNDING THE ESTAB- 10 LISHMENT OF CENTERS OF EXCELLENCE IN 11 FINANCIAL LITERACY EDUCATION. 12 ‘‘(a) IN GENERAL.—The Director of the Bureau, in 13 consultation with the Financial Literacy and Education 14 Commission established under the Financial Literacy and 15 Education Improvement Act, shall make competitive 16 grants to and enter into agreements with eligible institu- 17 tions to establish centers of excellence to support research, 18 development and planning, implementation, and evalua- 19 tion of effective programs in financial literacy education 20 for young people and families ages 8 through 24 years 21 old. 22 ‘‘(b) AUTHORIZED ACTIVITIES.—Activities author- 23 ized to be funded by grants made under subsection (a) 24 shall include the following: 25 VerDate Sep 11 2014 22:52 May 01, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2821.IH H2821 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 2821 IH ‘‘(1) Developing and implementing comprehen- 1 sive research based financial literacy education pro- 2 grams for young people— 3 ‘‘(A) based on a set of core competencies 4 and concepts established by the Director, in- 5 cluding goal setting, planning, budgeting, man- 6 aging money or transactions, tools and struc- 7 tures, behaviors, consequences, both long- and 8 short-term savings, managing debt and earn- 9 ings; and 10 ‘‘(B) which can be incorporated into edu- 11 cational settings through existing academic con- 12 tent areas, including materials that appro- 13 priately serve various segments of at-risk popu- 14 lations, particularly minority and disadvantaged 15 individuals. 16 ‘‘(2) Designing instructional materials using 17 evidence-based content for young families and con- 18 ducting related outreach activities to address unique 19 life situations and financial pitfalls, including bank- 20 ruptcy, foreclosure, credit card misuse, and preda- 21 tory lending. 22 ‘‘(3) Developing and supporting the delivery of 23 professional development programs in financial lit- 24 VerDate Sep 11 2014 22:52 May 01, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2821.IH H2821 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 2821 IH eracy education to assure competence and account- 1 ability in the delivery system. 2 ‘‘(4) Improving access to, and dissemination of, 3 financial literacy information for young people and 4 families. 5 ‘‘(5) Reducing student loan default rates by de- 6 veloping programs to help individuals better under- 7 stand how to manage educational debt through sus- 8 tained educational programs for college students. 9 ‘‘(6) Conducting ongoing research and evalua- 10 tion of financial literacy education programs to as- 11 sure learning of defined skills and knowledge, and 12 retention of learning. 13 ‘‘(7) Developing research-based assessment and 14 accountability of the appropriate applications of 15 learning over short and long terms to measure effec- 16 tiveness of authorized activities. 17 ‘‘(c) PRIORITY FOR CERTAIN APPLICATIONS.—The 18 Director shall give a priority to applications that— 19 ‘‘(1) provide clear definitions of ‘financial lit- 20 eracy’ and ‘financially literate’ to clarify educational 21 outcomes; 22 ‘‘(2) establish parameters for identifying the 23 types of programs that most effectively reach young 24 people and families in unique life situations and fi- 25 VerDate Sep 11 2014 22:52 May 01, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2821.IH H2821 kjohnson on DSK79L0C42PROD with BILLS 8 •HR 2821 IH nancial pitfalls, including bankruptcy, foreclosure, 1 credit card misuse, and predatory lending; 2 ‘‘(3) include content that is appropriate to age 3 and socioeconomic levels; 4 ‘‘(4) develop programs based on educational 5 standards, definitions, and research; 6 ‘‘(5) include individual goals of financial inde- 7 pendence and stability; 8 ‘‘(6) establish professional development and de- 9 livery systems using evidence-based practices; 10 ‘‘(7) address the needs of one or more at-risk 11 populations; 12 ‘‘(8) incorporate sensitivities to specific cul- 13 tural, linguistic, or demographic characteristics; 14 ‘‘(9) enhance opportunities for asset building, 15 such as increasing savings for lower income house- 16 holds and investments into the stock, bond, and real 17 estate markets; 18 ‘‘(10) include an evaluation component to en- 19 sure the work’s effectiveness in increasing financial 20 literacy or consumer access to appropriate financial 21 products or services, or that the provider has evi- 22 dence of such effectiveness; 23 ‘‘(11) promise future replication or can be sus- 24 tained beyond the program period; and 25 VerDate Sep 11 2014 22:52 May 01, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2821.IH H2821 kjohnson on DSK79L0C42PROD with BILLS 9 •HR 2821 IH ‘‘(12) will make effectiveness data (if any) that 1 is generated from the work available to others in the 2 financial education community. 3 ‘‘(d) APPLICATION AND EVALUATION STANDARDS 4 AND PROCEDURES; DISTRIBUTION CRITERIA.—The Di- 5 rector shall establish application and evaluation standards 6 and procedures, distribution criteria, and such other 7 forms, standards, definitions, and procedures as the Direc- 8 tor determines to be appropriate. 9 ‘‘(e) CONTENT DELIVERY.—An eligible institution re- 10 ceiving a grant under this section shall— 11 ‘‘(1) ensure that content is delivered in an ac- 12 cessible way to young people, through traditional 13 educational methods and digital methods, including 14 over appropriate social media platforms; and 15 ‘‘(2) to the extent content is delivered through 16 a website, ensure that the website is user friendly, 17 visually appealing, and doesn’t bombard users with 18 dense content that is difficult to comprehend. 19 ‘‘(f) GRANT AMOUNTS.— 20 ‘‘(1) IN GENERAL.—The aggregate amount of 21 grants made under this section during any fiscal 22 year— 23 ‘‘(A) shall be at least $27,500,000; and 24 ‘‘(B) may not exceed $55,000,000. 25 VerDate Sep 11 2014 22:52 May 01, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2821.IH H2821 kjohnson on DSK79L0C42PROD with BILLS 10 •HR 2821 IH ‘‘(2) TERMINATION.—No grants may be made 1 under this section after the end of fiscal year 2025. 2 ‘‘(g) REPORT TO CONGRESS.—The Director shall 3 issue an annual report to Congress containing— 4 ‘‘(1) a list of grant recipients under this sec- 5 tion, including the amount of such grant; and 6 ‘‘(2) for each grant recipient, a description of 7 the specific populations being served by such grant. 8 ‘‘(h) DEFINITIONS.—For purposes of this section the 9 following definitions shall apply: 10 ‘‘(1) ELIGIBLE INSTITUTION.—The term ‘eligi- 11 ble institution’ means a partnership of two or more 12 of the following: 13 ‘‘(A) An institution of higher education. 14 ‘‘(B) A State or local government agency 15 which specializes in financial education pro- 16 grams. 17 ‘‘(C) A nonprofit agency, organization, or 18 association. 19 ‘‘(D) A financial institution. 20 ‘‘(E) A small organization that is 21 partnering with, but is not itself, a person de- 22 scribed under subparagraph (A) through (D). 23 ‘‘(2) INSTITUTION OF HIGHER EDUCATION.— 24 The term ‘institution of higher education’ has the 25 VerDate Sep 11 2014 22:52 May 01, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2821.IH H2821 kjohnson on DSK79L0C42PROD with BILLS 11 •HR 2821 IH meaning given such term in section 101 of the High- 1 er Education Act of 1965 (20 U.S.C. 1001(a)).’’. 2 (b) CLERICAL AMENDMENT.—The table of contents 3 under section 1(b) of the Dodd-Frank Wall Street Reform 4 and Consumer Protection Act is amended by striking the 5 item relating to section 1037 and inserting the following: 6 ‘‘Sec. 1037. Authorization for funding the establishment of centers of excellence in financial literacy education. ‘‘Sec. 1038. Effective date.’’. Æ VerDate Sep 11 2014 22:52 May 01, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6301 E:\BILLS\H2821.IH H2821 kjohnson on DSK79L0C42PROD with BILLS