I 
112TH CONGRESS 
2D SESSION 
H. R. 4394 
To provide incentives to encourage financial institutions and small businesses 
to provide continuing financial education to customers, borrowers, and 
employees, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 18, 2012 
Ms. EDDIE BERNICE JOHNSON of Texas introduced the following bill; which 
was referred to the Committee on Ways and Means, and in addition to 
the Committees on Financial Services and Small Business, for a period 
to be subsequently determined by the Speaker, in each case for consider-
ation of such provisions as fall within the jurisdiction of the committee 
concerned 
A BILL 
To provide incentives to encourage financial institutions and 
small businesses to provide continuing financial education 
to customers, borrowers, and employees, and for other 
purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘National Financial Lit-
eracy Act of 2012’’. 
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SEC. 2. FINANCIAL LITERACY PROGRAMS. 
Section 804 of the Community Reinvestment Act of 
1977 (12 U.S.C. 2903) is amended by adding at the end 
the following new subsection: 
‘‘(e) DIRECT SUPPORT FOR FINANCIAL LITERACY 
PROGRAMS TAKEN INTO ACCOUNT.— 
‘‘(1) STANDARDS ESTABLISHED FOR ELIGIBLE 
PROGRAMS.—The appropriate Federal financial su-
pervisory agencies shall jointly prescribe regulations 
establishing— 
‘‘(A) the minimum standards required to 
be met by a community-based financial literacy 
program in order to be eligible for consideration 
under paragraph (3) as a qualified community- 
based financial literacy program; 
‘‘(B) the procedures for financial institu-
tions to apply to the appropriate Federal finan-
cial supervisory agency for approval of a finan-
cial literacy program as a qualified community- 
based financial literacy program; and 
‘‘(C) a requirement that financial institu-
tions submit a regular report on how the insti-
tution supported and promoted financial lit-
eracy in its entire community, including low- 
and moderate-income neighborhoods. 
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‘‘(2) 
FACTORS.—The 
regulations 
required 
under paragraph (1) shall require at a minimum 
that a qualified community-based financial literacy 
program— 
‘‘(A) be offered by a nonprofit budget and 
counseling agency which is exempt from tax-
ation under section 501(c)(3) of the Internal 
Revenue Code of 1986; and 
‘‘(B) include adequate education to pro-
mote consumer understanding of consumer, eco-
nomic, and personal finance issues and con-
cepts, including saving for retirement, man-
aging credit, long-term care, estate planning 
and education on predatory lending, identity 
theft, and financial abuse schemes. 
‘‘(3) PROGRAMS TAKEN INTO ACCOUNT.—The 
direct support by a financial institution of a quali-
fied community-based financial literacy program 
may be taken into account by the appropriate Fed-
eral financial supervisory agency under subsection 
(a) in assessing the institution’s record of meeting 
the credit needs of its entire community, including 
low- and moderate-income neighborhoods, in such 
amount and to such extent as may be provided in 
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the joint regulations prescribed under paragraph 
(1).’’. 
SEC. 3. CREDIT AGAINST INCOME TAX FOR SMALL BUSI-
NESSES WHICH PROVIDE CONTINUING FI-
NANCIAL EDUCATION TO EMPLOYEES. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
section: 
‘‘SEC. 45S. SMALL BUSINESSES PROVIDING CONTINUING FI-
NANCIAL EDUCATION TO EMPLOYEES. 
‘‘(a) IN GENERAL.—In the case of an eligible small 
business, the continuing financial education credit deter-
mined under this section is an amount equal to 35 percent 
of the continuing financial education expenses paid or in-
curred by the taxpayer during the taxable year. 
‘‘(b) ELIGIBLE SMALL BUSINESS.—For purposes of 
this section, the term ‘eligible small business’ means any 
small business which provides without charge a qualified 
continuing financial education program to its employees 
throughout the taxable year. 
‘‘(c) QUALIFIED
CONTINUING
FINANCIAL
EDU-
CATION PROGRAM.—For purposes of this section— 
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‘‘(1) IN
GENERAL.—The term ‘qualified con-
tinuing financial education program’ means any edu-
cational program or services— 
‘‘(A) which is provided by a community- 
based budget and counseling agency which is 
described in section 501(c)(3) and exempt from 
tax under section 501(a), 
‘‘(B) which promotes consumer under-
standing of consumer, economic, and personal 
finance issues and concepts, including saving 
for retirement, managing credit, long-term care, 
estate planning and education on predatory 
lending, identity theft, and financial abuse 
schemes, 
‘‘(C) which is offered to all employees of 
the taxpayer who have at least 2 weeks of serv-
ice with the employer, and 
‘‘(D) which is offered during— 
‘‘(i) at least 24 hours of each month 
if the taxpayer is a corporation, or 
‘‘(ii) at least 16 hours of each month 
in any other case. 
‘‘(d) SMALL BUSINESS.—For purposes of this sec-
tion— 
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‘‘(1) IN GENERAL.—The term ‘small business’ 
means, with respect to any taxable year, any em-
ployer if— 
‘‘(A) such employer employed an average 
of at least 2 but not more than 50 employees 
on business days during the most recent cal-
endar year ending before such taxable year, and 
‘‘(B) such employer employed at least 2 
employees on the first day of the taxable year. 
‘‘(2) EMPLOYERS NOT IN EXISTENCE IN PRE-
CEDING YEAR.—In the case of an employer which 
was not in existence throughout the calendar year 
referred to in paragraph (1), the determination 
under paragraph (1) shall be based on the average 
number of employees that it is reasonably expected 
such employer will employ on business days in the 
taxable year. 
‘‘(3) SPECIAL RULES.— 
‘‘(A) CONTROLLED
GROUPS.—For pur-
poses of this subsection, all persons treated as 
a single employer under subsection (b), (c), 
(m), or (o) of section 414 shall be treated as 1 
employer. 
‘‘(B) PREDECESSORS.—Any reference in 
this subsection to an employer shall include a 
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reference to any predecessor of such em-
ployer.’’. 
(b) DENIAL OF DOUBLE BENEFIT.—Section 280C of 
such Code is amended by adding at the end the following 
new subsection: 
‘‘(j) CREDIT FOR SMALL BUSINESSES PROVIDING 
CONTINUING FINANCIAL EDUCATION TO EMPLOYEES.— 
No deduction shall be allowed for that portion of the ex-
penses paid or incurred during the taxable year which is 
equal to the credit determined for the taxable year under 
sections 45S(a). In the case of persons treated as a single 
employer under section 45S(d)(3)(A), this subsection shall 
be applied under rules prescribed by the Secretary similar 
to the rules applicable under subsections (a) and (b) of 
section 52.’’. 
(c) CREDIT TO BE PART OF GENERAL BUSINESS 
CREDIT.—Section 38(b) of such Code is amended by strik-
ing ‘‘plus’’ at the end of paragraph (35), by striking the 
period at the end of paragraph (36) and inserting ‘‘, plus’’, 
and by adding at the end the following new paragraph: 
‘‘(37) the continuing financial education credit 
under section 45S(a).’’. 
(d) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
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of such Code is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 45S. Small businesses providing continuing financial education to employ-
ees.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2011. 
SEC. 4. PREFERENCE IN FEDERAL CONTRACTS, LOANS, 
AND OTHER ASSISTANCE FOR SMALL BUSI-
NESSES 
AND 
CORPORATIONS 
PROVIDING 
CONTINUING FINANCIAL EDUCATION TO EM-
PLOYEES. 
(a) PREFERENCE.—In the case of any Federal con-
tract or any Federal financial or nonfinancial assistance, 
an eligible small business or an eligible corporation shall 
be given a preference when submitting a bid or proposal 
for the contract or applying for such assistance. 
(b) DEFINITIONS.—In this section: 
(1) ELIGIBLE SMALL BUSINESS.—The term ‘‘el-
igible small business’’ has the meaning provided in 
section 45S(b) of the Internal Revenue Code of 
1986. 
(2) ELIGIBLE CORPORATION.—The term ‘‘eligi-
ble corporation’’ means any corporation— 
(A) that employs 50 or more employees; 
and 
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