II 

109TH CONGRESS 

2D SESSION S. 3863 

To amend part A of title IV of the Social Security Act to require a State 

to promote economic and financial education under the Temporary Assistance for Needy Families (TANF) Program and to allow economic and 

financial education to count as a work activity under that program. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 7 (legislative day, SEPTEMBER 6), 2006 

Mr. AKAKA (for himself, Mr. LAUTENBERG, Ms. STABENOW, and Mr. OBAMA) 

introduced the following bill; which was read twice and referred to the 

Committee on Finance 

A BILL 

To amend part A of title IV of the Social Security Act 

to require a State to promote economic and financial 

education under the Temporary Assistance for Needy 

Families (TANF) Program and to allow economic and 

financial education to count as a work activity under 

that program. 

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 ‘‘TANF Economic and 

5 Financial Education Promotion Act of 2006’’. 


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1 SEC. 2. FINDINGS AND PURPOSES. 

2 (a) FINDINGS.—Congress makes the following find3 ings: 

4 (1) Most recipients of assistance under the 

5 Temporary Assistance for Needy Families (TANF) 

6 Program established under part A of title IV of the 

7 Social Security Act (42 U.S.C. 601 et seq.) and indi8 viduals moving toward self-sufficiency operate out9 side the financial mainstream, paying high costs to 

10 handle their finances and saving little for emer11 gencies or the future. 

12 (2) Personal debt levels and bankruptcy filing 

13 rates are high and savings rates are at their lowest 

14 levels in 70 years. In 2005, the savings rate was 

15 negative. The inability of many households to budg16 et, save, and invest prevents them from laying the 

17 foundation for a secure financial future. 

18 (3) Financial planning can help families meet 

19 near-term obligations and maximize their longer20 term well being, especially valuable for populations 

21 that have traditionally been underserved by our fi22 nancial system. 

23 (4) Economic and financial education can give 

24 individuals the necessary financial tools to create 

25 household budgets, initiate savings plans, and ac26 quire assets. 


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1 (5) Economic and financial education can pre2 vent vulnerable customers from becoming entangled 

3 in financially devastating credit arrangements. 

4 (6) Economic and financial education that ad5 dresses abusive lending practices targeted at specific 

6 neighborhoods or vulnerable segments of the popu7 lation can prevent unaffordable payments, equity 

8 stripping, and foreclosure. 

9 (7) Economic and financial education speaks to 

10 the broader purpose of the TANF Program to equip 

11 individuals with the tools to succeed and support 

12 themselves and their families in self-sufficiency. 

13 (b) PURPOSES.—The purposes of this Act are the fol14 lowing: 

15 (1) To promote economic and financial literacy 

16 among individuals receiving assistance under Tem17 porary Assistance for Needy Families programs 

18 funded under part A of title IV of the Social Secu19 rity Act (42 U.S.C. 601 et seq.) by permitting 

20 States to include economic and financial literacy 

21 education that is provided directly to individuals as 

22 a work activity under such programs. 

23 (2) To provide individuals receiving assistance 

24 under Temporary Assistance for Needy Families 

25 programs funded under part A of title IV of the SoVerDate Aug 31 2005 00:08 Sep 13, 2006 Jkt 049196 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3863.IS S3863

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1 cial Security Act (42 U.S.C. 601 et seq.) with the 

2 skills and knowledge needed to effectively address 

3 personal financial matters and to make financial 

4 choices that will lead such individuals toward becom5 ing financially self-sufficient. 

6 SEC. 3. REQUIREMENT TO PROMOTE ECONOMIC AND FI7 NANCIAL EDUCATION UNDER TANF. 

8 (a) STATE PLAN REQUIREMENT.—Section 

9 402(a)(1)(A) of the Social Security Act (42 U.S.C. 

10 602(a)(1)(A)) is amended by adding at the end the fol11 lowing new clause: 

12 ‘‘(vii) Establish goals and take action 

13 to promote economic and financial edu14 cation in accordance with a program estab15 lished under section 404(l) among parents 

16 and caretakers receiving assistance under 

17 the program through collaboration with 

18 community-based organizations, financial 

19 institutions, business entities, the Finan20 cial Literacy and Education Commission 

21 established under section 513 of the Fair 

22 and Accurate Credit Transactions Act of 

23 2003 (20 U.S.C. 9702) and departments 

24 and agencies that are members of such 

25 Commission, including the Department of 


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1 Agriculture, the Securities and Exchange 

2 Commission, and the Board of Governors 

3 of the Federal Reserve System.’’. 

4 (b) PROGRAM REQUIREMENTS.—Section 404 of the 

5 Social Security Act (42 U.S.C. 604) is amended by adding 

6 at the end the following new subsection: 

7 ‘‘(l) ECONOMIC AND FINANCIAL EDUCATION.— 

8 ‘‘(1) IN GENERAL.—Subject to the succeeding 

9 paragraphs of this subsection, a State to which a 

10 grant is made under section 403— 

11 ‘‘(A) shall use the grant or State funds 

12 that are qualified State expenditures (as de13 fined in section 409(a)(7)(B)(i)) to establish a 

14 program to provide economic and financial edu15 cation directly for parents and caretakers re16 ceiving assistance under the State program 

17 funded under this part; and 

18 ‘‘(B) may count a parent’s or caretaker’s 

19 hours of participation in such program as being 

20 engaged in work for purposes of determining 

21 monthly participation rates under section 

22 407(b)(1)(B)(i). 

23 ‘‘(2) REQUIREMENTS.—A State shall ensure 

24 that the economic and financial literacy activities 


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1 conducted under the program established under this 

2 subsection— 

3 ‘‘(A) are accessible to the target population 

4 through curriculum geared to the general lit5 eracy level of the participants; 

6 ‘‘(B) provide relevant and practical infor7 mation to participants; 

8 ‘‘(C) include a direct delivery component; 

9 and 

10 ‘‘(D) to the extent practicable, are con11 ducted in conjunction with an asset building 

12 program conducted in the State. 

13 ‘‘(3) COLLABORATION WITH NONGOVERN14 MENTAL OR NONPROFIT ORGANIZATIONS ENCOUR15 AGED.—In carrying out economic and financial edu16 cation activities under a program established under 

17 this subsection, a State is encouraged to collaborate 

18 with nongovernmental or nonprofit organizations 

19 with a proven record of educating the public, espe20 cially at-risk populations, regarding economic and fi21 nancial literacy. 

22 ‘‘(4) EVALUATION.—A State shall conduct an 

23 evaluation of the economic and financial literacy pro24 gram established under this subsection not less than 

25 once every 3 years for the purpose of— 


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1 ‘‘(A) monitoring the number of parents 

2 and caretakers served under the program; 

3 ‘‘(B) improving program administration; 

4 ‘‘(C) facilitating replication and expansion 

5 of best practices; 

6 ‘‘(D) assessing behavioral changes of par7 ticipants; and 

8 ‘‘(E) assessing asset accumulation of par9 ticipants. 

10 ‘‘(5) DEFINITION OF ECONOMIC AND FINANCIAL

11 EDUCATION.—In this subsection, the term ‘economic 

12 and financial education’ means education that— 

13 ‘‘(A) promotes an understanding of con14 sumer, economic, and personal finance concepts, 

15 including basic economic concepts such as sup16 ply and demand and opportunity cost, as well 

17 as basic financial literacy concepts such as 

18 budgeting and money management, saving, re19 tirement planning, maintaining good credit, and 

20 the avoidance of predatory lending and financial 

21 abuse schemes; and 

22 ‘‘(B) is based on recognized standards for 

23 economic and financial education.’’. 

24 (c) EFFECTIVE DATE.— 


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1 (1) IN GENERAL.—Except as provided in para2 graph (2), the amendments made by this section 

3 take effect on October 1, 2006. 

4 (2) EXCEPTION.—In the case of a State plan 

5 under part A of title IV of the Social Security Act 

6 which the Secretary of Health and Human Services 

7 determines requires State legislation in order for the 

8 plan to meet the additional requirements imposed by 

9 the amendments made by this Act, the effective date 

10 of the amendments imposing the additional require11 ments shall be 3 months after the first day of the 

12 first calendar quarter beginning after the close of 

13 the first regular session of the State legislature that 

14 begins after the date of enactment of this Act. For 

15 purposes of the preceding sentence, in the case of a 

16 State that has a 2-year legislative session, each year 

17 of the session shall be considered to be a separate 

18 regular session of the State legislature. 

Æ 


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