A bill to expand and improve housing counseling services by increasing financial education and counseling services available to homeowners and prospective homebuyers in financial turmoil or who seek credit or other personal financial assistance, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Financial Education and Counseling 
Assistance Act of 2007''.

SEC. 2. FINANCIAL EDUCATION AND COUNSELING.

    (a) Demonstration Program.--Section 106 of the Housing and Urban 
Development Act of 1968 (12 U.S.C. 1701x) is amended by adding at the 
end the following:
    ``(g) Financial Education and Counseling.--
            ``(1) Purposes.--The purposes of this subsection are to--
                    ``(A) increase financial education and counseling 
                services available to homeowners and prospective 
                homebuyers;
                    ``(B) assist homeowners and prospective homebuyers 
                to develop monthly budgets, build personal savings, 
                finance or plan for major purchases, reduce their debt, 
                improve their financial stability, and set and reach 
                their financial goals;
                    ``(C) help homeowners and prospective homebuyers 
                understand their credit histories and its relationship 
                to their credit score, so as to improve their credit 
                score;
                    ``(D) educate homeowners and prospective homebuyers 
                about the options available to build savings or plan 
                for retirement; and
                    ``(E) provide financial education and counseling 
                for homeowners and prospective homebuyers seeking to 
                understand or improve their credit, savings, bill 
                payments, or other personal financial needs.
            ``(2) Authority.--The Secretary of Housing and Urban 
        Development shall carry out a grant program to assist eligible 
        organizations to provide financial education and counseling 
        services to homeowners and prospective homebuyers.
            ``(3) Grants.--
                    ``(A) In general.--The Secretary shall make grants 
                to eligible organizations to enable such organization 
                to provide a range of financial education and 
                counseling services to homeowners and prospective 
                homebuyers.
                    ``(B) Selection.--The Secretary shall select 
                organizations to receive assistance under this 
                subsection based on their experience and ability to 
                provide financial education and counseling services to 
                homeowners and prospective homebuyers.
                    ``(C) Preference.--The Secretary shall give 
                preference to established community-based financial 
                education and counseling organizations capable of 
                providing in-person services.
            ``(4) Eligible organizations.--To be eligible to receive a 
        grant under this subsection, an eligible organization shall be 
        a--
                    ``(A) housing counseling agency certified by the 
                Secretary under subsection (e);
                    ``(B) nonprofit organization organized under 
                section 501(c)(3) of the Internal Revenue Code;
                    ``(C) State, local, or tribal government agency; or
                    ``(D) community development financial institution 
                (as defined in section 103(5) of the Community 
                Development Banking and Financial Institutions Act of 
                1994 (12 U.S.C. 4702(5)) or a credit union.
            ``(5) Eligible uses.--A grant awarded to an eligible 
        organization under this subsection shall be used to provide a 
        range of financial education and counseling services, 
        including--
                    ``(A) assisting in the expansion of mortgage and 
                housing-related financial counseling services;
                    ``(B) providing information on important financial 
                topics to homeowners and prospective homebuyers; and
                    ``(C) assisting homeowners and prospective 
                homebuyers to--
                            ``(i) develop sustainable monthly budgets;
                            ``(ii) understand their credit history and 
                        their credit scores, so as to improve their 
                        credit score;
                            ``(iii) develop a plan to manage their 
                        bills, reduce their debt, and improve their 
                        savings; and
                            ``(iv) set and reach their financial goals.
            ``(6) Counseling activities.--
                    ``(A) Regulations.--The Secretary shall develop and 
                issue guidelines and regulations to carry out the 
                financial education and counseling program established 
                under this subsection.
                    ``(B) Content of regulations.--The guidelines and 
                regulations required under subparagraph (A) shall be 
                modeled on the regulations issued by the Secretary 
                pursuant to the housing counseling program under 
                subsection (c) and shall require each eligible 
                organization under this subsection to--
                            ``(i) conduct a preliminary interview with 
                        a homeowner or prospective homebuyer to 
                        determine the financial needs of such homeowner 
                        or renter;
                            ``(ii) develop a financial plan tailored to 
                        meet the financial needs of such homeowner or 
                        prospective homebuyer; and
                            ``(iii) help each such homeowner or 
                        prospective homebuyer achieve their financial 
                        goals.
            ``(7) Coordination with the financial literacy and 
        education commission.--In developing the guidelines and 
        regulations required under paragraph (6) and in carrying out 
        the grant program established under this subsection, the 
        Secretary shall seek advice from and work in coordination with 
        the Financial Literacy and Education Commission established 
        under section 513 of the Fair and Accurate Credit Transactions 
        Act of 2003 (20 U.S.C. 9702) in order to avoid duplication and 
        to utilize the resources and experience of the Commission.
            ``(8) Outreach.--
                    ``(A) To individuals.--The Secretary, in 
                cooperation with eligible organizations, shall--
                            ``(i) carry out outreach efforts to ensure 
                        that homeowners and prospective homebuyers are 
                        aware of the financial education and counseling 
                        opportunities under this subsection; and
                            ``(ii) make an special effort to serve 
                        individuals who--
                                    ``(I) qualify for the earned income 
                                tax credit under section 32 of the 
                                Internal Revenue Code;
                                    ``(II) have a low credit score, 
                                damaged credit, or are without 
                                sufficient data to create a credit 
                                score;
                                    ``(III) are in danger of filing for 
                                bankruptcy;
                                    ``(IV) are subject to, or are in 
                                danger of, becoming subject to 
                                foreclosure proceedings; and
                                    ``(V) have low levels of personal 
                                saving, low net-worth, or high levels 
                                of debt.
                    ``(B) To grantees.--The Secretary shall also make 
                an effort to publish grant opportunities under this 
                subsection to eligible organizations who may not 
                typically seek out such Federal funding.
            ``(9) Study and report on effectiveness and impact.--
                    ``(A) In general.--Not later than 2 years after the 
                date of enactment of the Financial Education and 
                Counseling Assistance Act of 2007, the Inspector 
                General of the Department of Housing and Urban 
                Development shall conduct a study and 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 effectiveness and 
                impact of the grant program established under this 
                subsection.
                    ``(B) Content of study.--The study required under 
                subparagraph (A) shall include the following:
                            ``(i) The effectiveness of the grant 
                        program established under this subsection in 
                        improving the financial situation of homeowners 
                        and prospective homebuyers served by the grant 
                        program.
                            ``(ii) The impact of the financial 
                        education and counseling services provided 
                        under this subsection on reducing debt, 
                        building savings, and improving the overall 
                        financial well-being of homeowners and 
                        prospective homebuyers served by the grant 
                        program.
                            ``(iii) An evaluation of the effectiveness 
                        and quality of the counselors providing 
                        financial education and counseling services 
                        under the grant program.
            ``(10) Authorization of appropriations.--There are 
        authorized to be appropriated such sums as are necessary to 
        carry out this subsection.''.
    (b) Certification of Financial Counselors.--Section 106(e)(1) of 
the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x(e)(1)) 
is amended by striking ``(c), or (d),'' and inserting ``(c), (d), or 
(g)''.

Summary: Financial Education and Counseling Assistance Act of 2007 - Amends the Housing and Urban Development Act of 1968 to require the Secretary of Housing and Urban Development (HUD) to carry out a grant program to assist eligible organizations to provide financial education and counseling services to homeowners and prospective homebuyers. Requires the Secretary to give preference to established community-based financial education and counseling organizations capable of providing in-person services. Prohibits an organization from receiving such financial assistance unless its financial counselors are HUD-certified.