II 

109TH CONGRESS 

2D SESSION S. 2654 

To protect consumers, and especially young consumers, from skyrocketing 

consumer debt and the barrage of credit card solicitations, to establish 

a financial literacy and education program in elementary and secondary 

schools to help prepare young people to be financially responsible consumers, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 26, 2006 

Mr. MENENDEZ introduced the following bill; which was read twice and 

referred to the Committee on Health, Education, Labor, and Pensions 

A BILL 

To protect consumers, and especially young consumers, from 

skyrocketing consumer debt and the barrage of credit 

card solicitations, to establish a financial literacy and 

education program in elementary and secondary schools 

to help prepare young people to be financially responsible 

consumers, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Protection of Young 

5 Consumers Act of 2006’’. 


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1 SEC. 2. PROTECTION OF YOUNG CONSUMERS FROM 

2 PRESCREENED CREDIT OFFERS. 

3 (a) IN GENERAL.—Section 604(c)(1)(B) of the Fair 

4 Credit Reporting Act (15 U.S.C. 1681(c)(1)(B)) is 

5 amended— 

6 (1) in clause (ii), by striking ‘‘and’’ at the end; 

7 and 

8 (2) in clause (iii), by striking the period at the 

9 end and inserting the following: ‘‘; and 

10 ‘‘(iv) the consumer report indicates that 

11 the consumer is age 21 or older, except that a 

12 consumer who is at least 18 years of age may 

13 elect, in accordance with subsection (e)(7), to 

14 authorize the consumer reporting agency to in15 clude the name and address of the consumer in 

16 any list of names provided by the agency pursu17 ant to this paragraph.’’. 

18 (b) OPT-IN FOR YOUNG CONSUMERS.—Section 

19 604(e) of the Fair Credit Reporting Act (15 U.S.C. 

20 1681(e)) is amended— 

21 (1) by striking the subsection heading and in22 serting the following: 

23 ‘‘(e) ELECTION OF CONSUMERS REGARDING

24 LISTS.—’’; and 

25 (2) by adding at the end the following: 

26 ‘‘(7) OPT-IN FOR UNDERAGE CONSUMERS.— 


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1 ‘‘(A) IN GENERAL.—A consumer who is at 

2 least 18 years of age, but has not attained his 

3 or her 21st birthday may elect to have the 

4 name and address of the consumer included in 

5 any list provided by a consumer reporting agen6 cy under subsection (c)(1)(B) in connection 

7 with a credit or insurance transaction that is 

8 not initiated by the consumer by notifying the 

9 agency in accordance with subparagraph (B) 

10 that the consumer consents to the use of a con11 sumer report relating to the consumer in con12 nection with any credit or insurance transaction 

13 that is not initiated by the consumer. 

14 ‘‘(B) MANNER OF NOTIFICATION.—An 

15 election by a consumer described in subpara16 graph (A) shall be in writing, using a signed 

17 notice of election form issued or made available 

18 electronically by the agency at the request of 

19 the consumer for purposes of this paragraph. 

20 ‘‘(C) EFFECTIVENESS OF ELECTION.—An 

21 election by a consumer under subparagraph (A) 

22 to be included in a list provided by a consumer 

23 reporting agency— 

24 ‘‘(i) shall be effective until the earlier 

25 of— 


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1 ‘‘(I) the 21st birthday of the con2 sumer; or 

3 ‘‘(II) the date on which the con4 sumer notifies the agency, through the 

5 notification system established by the 

6 agency under paragraph (5), that the 

7 election is no longer effective; and 

8 ‘‘(ii) shall be effective with respect to 

9 each affiliate of the agency. 

10 ‘‘(D) RULE OF CONSTRUCTION.—An elec11 tion by a consumer under subparagraph (A) to 

12 be included in a list provided by a consumer re13 porting agency may not be construed to limit 

14 the applicability of this subsection to any per15 son age 21 or older, and such person may elect 

16 to be excluded from any such list after the at17 tainment of his or her 21st birthday in the 

18 manner otherwise provided under this sub19 section.’’. 

20 SEC. 3. PROMOTING YOUTH FINANCIAL LITERACY. 

21 (a) IN GENERAL.—Title IV of the Elementary and 

22 Secondary Education Act of 1965 (20 U.S.C. 7101 et 

23 seq.) is amended by adding at the end the following: 


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1 ‘‘PART D—PROMOTING YOUTH FINANCIAL 

2 LITERACY 

3 ‘‘SEC. 4401. SHORT TITLE AND FINDINGS. 

4 ‘‘(a) SHORT TITLE.—This part may be cited as the 

5 ‘Youth Financial Education Act’. 

6 ‘‘(b) FINDINGS.—Congress finds the following: 

7 ‘‘(1) In order to succeed in our dynamic Amer8 ican economy, young people must obtain the skills, 

9 knowledge, and experience necessary to manage their 

10 personal finances and obtain general financial lit11 eracy. All young adults should have the educational 

12 tools necessary to make informed financial decisions. 

13 ‘‘(2) Despite the critical importance of financial 

14 literacy to young people, the average high school 

15 graduate lacks basic skills in the management of 

16 personal financial affairs. A nationwide survey con17 ducted in 2004 by the Jump$tart Coalition for Per18 sonal Financial Literacy examined the financial 

19 knowledge of 4,074 12th graders. On average, sur20 vey respondents answered only 52 percent of the 

21 questions correctly, up only slightly from the 50 per22 cent average score in 2002. 

23 ‘‘(3) An evaluation by the National Endowment 

24 for Financial Education High School Financial 

25 Planning Program undertaken jointly with the Coop26 erative State Research, Education, and Extension 


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1 Service of the Department of Agriculture dem2 onstrates that as little as 10 hours of classroom in3 struction can impart substantial knowledge and af4 fect significant change in how teens handle their 

5 money. 

6 ‘‘(4) State educational leaders have recognized 

7 the importance of providing a basic financial edu8 cation to students in kindergarten through grade 12 

9 by integrating financial education into State edu10 cational standards, but by 2004, only 7 States re11 quired students to complete a course that covered 

12 personal finance before graduating from high school. 

13 ‘‘(5) Teacher training and professional develop14 ment are critical to achieving youth financial lit15 eracy. Teachers should be given the tools they need 

16 to educate our Nation’s youth on personal finance 

17 and economics. 

18 ‘‘(6) Personal financial education helps prepare 

19 students for the workforce and for financial inde20 pendence by developing their sense of individual re21 sponsibility, improving their life skills, and providing 

22 them with a thorough understanding of consumer 

23 economics that will benefit them for their entire 

24 lives. 


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1 ‘‘(7) Financial education integrates instruction 

2 in valuable life skills with instruction in economics, 

3 including income and taxes, money management, in4 vestment and spending, and the importance of per5 sonal savings. 

6 ‘‘(8) The consumers and investors of tomorrow 

7 are in our schools today. The teaching of personal 

8 finance should be encouraged at all levels of our Na9 tion’s educational system, from kindergarten 

10 through grade 12. 

11 ‘‘SEC. 4402. STATE GRANT PROGRAM. 

12 ‘‘(a) PROGRAM AUTHORIZED.—The Secretary is au13 thorized to award grants, from allocations under sub14 section (c), to State educational agencies to develop and 

15 integrate youth financial education programs for students 

16 in elementary schools and secondary schools. 

17 ‘‘(b) STATE PLAN.— 

18 ‘‘(1) APPROVED STATE PLAN REQUIRED.—To 

19 be eligible to receive a grant under this section, a 

20 State educational agency shall submit an application 

21 to the Secretary that— 

22 ‘‘(A) includes a State plan in accordance 

23 with paragraph (2); and 

24 ‘‘(B) is approved by the Secretary. 


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1 ‘‘(2) STATE PLAN CONTENTS.—The State plan 

2 referred to in paragraph (1) shall include— 

3 ‘‘(A) a description of how the State edu4 cational agency will use the grant funds; 

5 ‘‘(B) a description of how the programs 

6 supported by the grant will be coordinated with 

7 other relevant Federal, State, regional, and 

8 local programs; and 

9 ‘‘(C) a description of how the State edu10 cational agency will evaluate program perform11 ance. 

12 ‘‘(c) ALLOCATION OF FUNDS.— 

13 ‘‘(1) ALLOCATION FACTORS.—Except as other14 wise provided in paragraph (2), the Secretary shall 

15 allocate the amounts made available to carry out 

16 this section pursuant to subsection (a) to each State 

17 according to the relative populations in all of the 

18 States of students in kindergarten through grade 12, 

19 as determined by the Secretary based on the most 

20 recent satisfactory data. 

21 ‘‘(2) MINIMUM ALLOCATION.—Subject to the 

22 availability of appropriations, and notwithstanding 

23 paragraph (1), a State that has submitted a plan 

24 under subsection (b) that is approved by the SecVerDate Aug 31 2005 01:21 Apr 29, 2006 Jkt 049196 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2654.IS S2654

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1 retary shall be allocated a grant under this section 

2 that is not less than $500,000 for a fiscal year. 

3 ‘‘(3) REALLOCATION.—In any fiscal year, the 

4 Secretary shall reallocate, to States with approved 

5 plans under this section in accordance with para6 graph (1), an allocation under this subsection— 

7 ‘‘(A) for any State that has not submitted 

8 a plan under subsection (b); or 

9 ‘‘(B) for any State whose plan submitted 

10 under subsection (b) has been disapproved by 

11 the Secretary. 

12 ‘‘(d) USE OF GRANT FUNDS.— 

13 ‘‘(1) REQUIRED USES.—A grant made to a 

14 State educational agency under this part shall be 

15 used— 

16 ‘‘(A) to provide funds to local educational 

17 agencies and public schools to carry out finan18 cial education programs for students in kinder19 garten through grade 12, based on the concept 

20 of achieving financial literacy through the 

21 teaching of personal financial management 

22 skills and the basic principles involved with 

23 earning, spending, saving, and investing; 


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1 ‘‘(B) to carry out professional development 

2 programs to prepare teachers and administra3 tors for financial education; and 

4 ‘‘(C) to monitor and evaluate programs 

5 supported under subparagraphs (A) and (B). 

6 ‘‘(2) LIMITATION ON ADMINISTRATIVE COSTS.— 

7 A State educational agency receiving a grant under 

8 subsection (a) may use not more than 4 percent of 

9 the total amount of the grant in any fiscal year for 

10 the administrative costs of carrying out this section. 

11 ‘‘(e) REPORT TO THE SECRETARY.— 

12 ‘‘(1) IN GENERAL.—Each State educational 

13 agency receiving a grant under this section shall 

14 transmit a report to the Secretary with respect to 

15 each fiscal year for which a grant is received. 

16 ‘‘(2) CONTENT OF REPORT.—Each report re17 quired under paragraph (1) shall describe— 

18 ‘‘(A) the programs supported by the grant; 

19 and 

20 ‘‘(B) the results of the State educational 

21 agency’s monitoring and evaluation of such pro22 grams. 

23 ‘‘SEC. 4403. CLEARINGHOUSE. 

24 ‘‘(a) AUTHORITY.—Subject to the availability of ap25 propriations, the Secretary shall make a grant to, or exeVerDate Aug 31 2005 01:21 Apr 29, 2006 Jkt 049196 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2654.IS S2654

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1 cute a contract with, an eligible entity with substantial ex2 perience in the field of financial education, such as the 

3 Jump$tart Coalition for Personal Financial Literacy, to 

4 establish, operate, and maintain a national clearinghouse 

5 (in this part referred to as the ‘Clearinghouse’) for in6 structional materials and information regarding model fi7 nancial education programs and best practices. 

8 ‘‘(b) ELIGIBLE ENTITY.—In this section, the term 

9 ‘eligible entity’ means a national nonprofit organization 

10 with a proven record of— 

11 ‘‘(1) cataloging youth financial literacy mate12 rials; and 

13 ‘‘(2) providing support services and materials to 

14 schools and other organizations that work to pro15 mote youth financial literacy. 

16 ‘‘(c) APPLICATION.—An eligible entity desiring to es17 tablish, operate, and maintain the Clearinghouse shall 

18 submit an application to the Secretary at such time, in 

19 such manner, and accompanied by such information, as 

20 the Secretary may reasonably require. 

21 ‘‘(d) BASIS AND TERM.—The Secretary shall make 

22 the grant or contract authorized under subsection (a) on 

23 a competitive, merit basis for a term of 5 years. 


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1 ‘‘(e) USE OF FUNDS.—The Clearinghouse shall use 

2 the funds provided under a grant or contract made under 

3 subsection (a)— 

4 ‘‘(1) to maintain a repository of instructional 

5 materials and related information regarding finan6 cial education programs for elementary schools and 

7 secondary schools, including kindergartens, for use 

8 by States, localities, and the general public; 

9 ‘‘(2) to disseminate to States, localities, and the 

10 general public, through electronic and other means, 

11 instructional materials and related information re12 garding financial education programs for elementary 

13 schools and secondary schools, including kinder14 gartens; and 

15 ‘‘(3) to the extent that resources allow, to pro16 vide technical assistance to States, localities, and the 

17 general public on the design, establishment, and im18 plementation of financial education programs for ele19 mentary schools and secondary schools, including 

20 kindergartens. 

21 ‘‘(f) CONSULTATION.—The chief executive officer of 

22 the eligible entity selected to establish and operate the 

23 Clearinghouse shall consult with the Department of the 

24 Treasury and the Securities and Exchange Commission 

25 with respect to its activities under subsection (e). 


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1 ‘‘(g) SUBMISSION TO CLEARINGHOUSE.—Each Fed2 eral agency or department that develops financial edu3 cational programs and instructional materials for such 

4 programs shall submit to the Clearinghouse information 

5 on the programs and copies of the materials. 

6 ‘‘(h) APPLICATION OF COPYRIGHT LAWS.—In car7 rying out this section, the Clearinghouse shall comply with 

8 the provisions of title 17, United States Code. 

9 ‘‘SEC. 4404. EVALUATION AND REPORT. 

10 ‘‘(a) PERFORMANCE MEASURES.—The Secretary 

11 shall develop measures to evaluate the performance of pro12 grams assisted under sections 4402 and 4403. 

13 ‘‘(b) EVALUATION ACCORDING TO PERFORMANCE

14 MEASURES.—Applying the performance measures devel15 oped under subsection (a), the Secretary shall evaluate 

16 programs assisted under sections 4402 and 4403— 

17 ‘‘(1) to judge the programs’ performance and 

18 effectiveness; 

19 ‘‘(2) to identify which of the programs rep20 resent the best practices of entities developing finan21 cial education programs for students in kindergarten 

22 through grade 12; and 

23 ‘‘(3) to identify which of the programs may be 

24 replicated and used to provide technical assistance to 

25 States, localities, and the general public. 


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1 ‘‘(c) REPORT.— 

2 ‘‘(1) IN GENERAL.—For each fiscal year for 

3 which there are appropriations under section 

4 4407(a), the Secretary shall transmit a report to 

5 Congress describing the status of the implementa6 tion of this part. 

7 ‘‘(2) CONTENTS OF REPORT.—The report re8 quired under paragraph (1) shall include— 

9 ‘‘(A) the results of the evaluation required 

10 under subsection (b); and 

11 ‘‘(B) a description of the programs sup12 ported under section 4402. 

13 ‘‘SEC. 4405. DEFINITIONS. 

14 ‘‘In this part: 

15 ‘‘(1) FINANCIAL EDUCATION.—The term ‘finan16 cial education’ means educational activities and ex17 periences, planned and supervised by qualified teach18 ers, that enable students— 

19 ‘‘(A) to understand basic economic and 

20 consumer principles; 

21 ‘‘(B) to acquire the skills and knowledge 

22 necessary to manage personal and household fi23 nances; and 


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1 ‘‘(C) to develop a range of competencies 

2 that will enable the students to become respon3 sible consumers. 

4 ‘‘(2) QUALIFIED TEACHER.—The term ‘quali5 fied teacher’ means a teacher who holds a valid 

6 teaching certification or is considered to be qualified 

7 by the State educational agency in the State in 

8 which the teacher works. 

9 ‘‘SEC. 4406. PROHIBITION. 

10 ‘‘Nothing in this part shall be construed to authorize 

11 an officer or employee of the Federal Government to man12 date, direct, or control a State, local educational agency, 

13 or school’s specific instructional content, curriculum, or 

14 program of instruction, as a condition of eligibility to re15 ceive funds under this part. 

16 ‘‘SEC. 4407. AUTHORIZATION OF APPROPRIATIONS. 

17 ‘‘(a) AUTHORIZATION.—For the purposes of carrying 

18 out this part, there are authorized to be appropriated 

19 $100,000,000 for each of the fiscal years 2007 through 

20 2011. 

21 ‘‘(b) LIMITATION ON FUNDS FOR CLEARING22 HOUSE.—The Secretary may use not less than 2 percent 

23 and not more than 5 percent of amounts appropriated 

24 under subsection (a) for each fiscal year to carry out sec25 tion 4403. 


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1 ‘‘(c) LIMITATION ON FUNDS FOR SECRETARY EVAL2 UATION.—The Secretary may use not more than $200,000 

3 from the amounts appropriated under subsection (a) for 

4 each fiscal year to carry out subsections (a) and (b) of 

5 section 4404. 

6 ‘‘(d) LIMITATION ON ADMINISTRATIVE COSTS.—Ex7 cept as necessary to carry out subsections (a) and (b) of 

8 section 4404 using amounts described in subsection (c), 

9 the Secretary shall not use any portion of the amounts 

10 appropriated under subsection (a) for the costs of admin11 istering this part.’’. 

12 (b) TABLE OF CONTENTS.—The table of contents of 

13 the Elementary and Secondary Education Act of 1965 (20 

14 U.S.C. 6301 note) is amended by inserting after the item 

15 relating to section 4304 the following: 

‘‘PART D—PROMOTING YOUTH FINANCIAL LITERACY 

‘‘Sec. 4401. Short title and findings. 

‘‘Sec. 4402. State grant program. 

‘‘Sec. 4403. Clearinghouse. 

‘‘Sec. 4404. Evaluation and report. 

‘‘Sec. 4405. Definitions. 

‘‘Sec. 4406. Prohibition. 

‘‘Sec. 4407. Authorization of appropriations.’’. 

16 (c) GAO STUDY.— 

17 (1) STUDY.—The Comptroller General shall 

18 conduct an annual study of the effectiveness of the 

19 programs and activities assisted under part D of 

20 title IV of the Elementary and Secondary Education 

21 Act of 1965. 


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1 (2) REPORT.—The Comptroller General shall 

2 prepare and submit to Congress a report on the re3 sults of each study conducted under paragraph (1). 

4 The first such report shall be submitted 1 year after 

5 the date of enactment of this Act and subsequent re6 ports shall be submitted each year thereafter. 

7 (3) AUTHORIZATION OF APPROPRIATIONS.— 

8 There are authorized to be appropriated to carry out 

9 this section such sums as may be necessary for fiscal 

10 year 2007 and each of the 4 succeeding fiscal years 

11 thereafter. 

Æ 


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