BILL NUMBER: SB 696	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Lieu

                        FEBRUARY 18, 2011

   An act to add Division 22 (commencing with Section 70000) to the
Financial Code, relating to financial literacy.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 696, as introduced, Lieu. California Financial Literacy
Initiative.
   The California Constitution requires the Legislature to encourage
the promotion of intellectual improvement. Existing law regulates
financial institutions and their interactions with the public.
Existing law recognizes the existence of specialized financial
institutions that provide services, including, but not limited to,
financial literacy training, to underserved communities.
   This bill would establish the California Financial Literacy
Initiative in the Controller's office for the purpose of providing
resources and instruction to Californians to improve financial
literacy. The initiative would be administered by the Controller. The
bill would establish the California Financial Literacy Fund in the
State Treasury and would authorize the Controller to deposit private
donations into the fund from entities with no direct financial
interest in any financial products. The bill would require those
moneys to be made available upon appropriation in the annual Budget
Act. The bill would require the Controller, beginning in 2012, to
report to specified committees of the Legislature annually on or
before August 30 on the implementation of the initiative, as
specified.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) The average American household consumer credit card debt is
about eight thousand five hundred dollars ($8,500).
   (b) Forty-three percent of American families spend more than they
earn, and data from the Federal Reserve states that Americans hold a
total debt of $1.9773 trillion, not including mortgage debt,
averaging eighteen thousand six hundred fifty-four dollars ($18,654)
per household.
   (c) As the mortgage crisis demonstrated, there is a severe
shortage of affordable financial advisors to counsel middle and lower
income Californians and advise them on how to plan when a fiscal
crisis hits.
   (d) Studies show that 60 percent of homeowners facing foreclosure
did not know to reach out to their lenders, which has proven the best
way to avoid foreclosure and foreclosure scams.
   (e) The first quarter of 2008 reported 169,831 foreclosure filings
in California, the highest in the country, at a rate of one in every
78 households.
   (f) High school seniors taking part in a national survey of
financial knowledge scored an average of 48.3 percent, which is a
failing grade.
   (g) Undergraduate students reported their freshman year as the
most prevalent time for obtaining credit cards, with 78 percent
reporting that they obtained their first credit card at 18 years of
age.
   (h) Sixty-five percent of 18 to 19 year olds, the average age that
college students reported getting their first credit card, failed a
financial literacy test.
   (i) Many groups are dedicated to increasing the financial literacy
of Americans and a broad range of quality personal finance
instructional materials and curricula have been created for this
purpose.
   (j) California does not have an official statewide policy or
educational plan for the teaching of financial literacy.
   (k) Financial literacy materials and resources exist in many
forms, but are not organized or collected in a systematic manner.
   (l) The teaching of financial literacy skills is vital to equip
the young people of California with the tools they need to enter the
workforce.
  SEC. 2.  Division 22 (commencing with Section 70000) is added to
the Financial Code, to read:

      DIVISION 22.  CALIFORNIA FINANCIAL LITERACY INITIATIVE


   70000.  For purposes of this division, "initiative" means the
California Financial Literacy Initiative.
   70001.  (a) The California Financial Literacy Initiative is hereby
established in the Controller's office as a program for improving
financial literacy by providing resources and instruction to
Californians.
   (b) The initiative shall be administered by the Controller.
   70002.  The California Financial Literacy Fund is hereby
established in the State Treasury. The purpose of the fund is to
implement measures defined by the initiative. The Controller may
accept private donations from entities with no direct financial
interest in any financial products and deposit those donations into
the fund, which shall be made available upon appropriation in the
annual Budget Act.
   70003.  Beginning in 2012, the Controller shall provide to the
respective chairpersons of the Assembly Committee on Banking and
Finance and the Senate Committee on Banking, Finance and Insurance an
annual report on the initiative. This report shall include, but not
be limited to, steps taken to partner with the financial services
community and governmental and nongovernmental stakeholders to
improve Californians' financial literacy, a description of the basic
financial skills information available on the Controller's Internet
Web site and plans to improve that clearinghouse of information, any
nonstate funding received for purposes of this initiative, and any
additional recommendations to enhance financial literacy in
California. This report shall be submitted no later than August 30 of
each year.