Definition of Financial Literacy in WIOA and the NPRM As shown in the table below, the WIOA legislation defines financial literacy with a list of five services. The NPRM adds three additional components, including education about identity theft, opportunities to put lessons into practice, and “other approaches to help participants gain the knowledge skills and confidence to make informed financial decisions.” By adding these additional components, the Department of Labor moved the definition of financial literacy to a “financial capability” approach where the workforce system is directed to actively engage the consumer in addition to providing information and support. Definitions of Financial Literacy in WIOA and in the WIOA NPRM WIOA-- §129(b)(2)(D)-Use of funds for NPRM-- §681.500-Youth Activities youth workforce investment activities. Under Title I, What is financial literacy education? (i) supporting the ability of participants to (a) Support the ability of participants to create household budgets, initiate savings create budgets, initiate checking and plans, and make informed financial savings accounts at banks, and make decisions about education, retirement, informed financial decisions; home ownership, wealth building, or other savings goals; (ii) supporting the ability to manage (b) Support participants in learning how to spending, credit, and debt, including credit effectively manage spending, credit, and card debt, effectively; debt, including student loans, consumer credit, and credit cards; (iii) increasing awareness of the (c) Teach participants about the availability and significance of credit significance of credit reports and credit reports and credit scores in obtaining scores; what their rights are regarding credit, including determining their their credit and financial information; how accuracy (and how to correct inaccuracies to determine the accuracy of a credit in the reports and scores), and their effect report and how to correct inaccuracies; on credit terms; and how to improve or maintain good credit; (iv) supporting the ability to understand, (d)Support a participant’s ability to evaluate, and compare financial products, understand, evaluate, and compare services, and opportunities; and financial products, services, and
Definition of Financial Literacy in WIOA and the NPRM As shown in the table below, the WIOA legislation defines financial literacy with a list of five services. The NPRM adds three additional components, including education about identity theft, opportunities to put lessons into practice, and “other approaches to help participants gain the knowledge skills and confidence to make informed financial decisions.” By adding these additional components, the Department of Labor moved the definition of financial literacy to a “financial capability” approach where the workforce system is directed to actively engage the consumer in addition to providing information and support. Definitions of Financial Literacy in WIOA and in the WIOA NPRM WIOA-- §129(b)(2)(D)-Use of funds for youth workforce investment activities. NPRM-- §681.500-Youth Activities Under Title I, What is financial literacy education? (i) supporting the ability of participants to create household budgets, initiate savings plans, and make informed financial decisions about education, retirement, home ownership, wealth building, or other savings goals; (a) Support the ability of participants to create budgets, initiate checking and savings accounts at banks, and make informed financial decisions; (ii) supporting the ability to manage spending, credit, and debt, including credit card debt, effectively; (b) Support participants in learning how to effectively manage spending, credit, and debt, including student loans, consumer credit, and credit cards; (iii) increasing awareness of the availability and significance of credit reports and credit scores in obtaining credit, including determining their accuracy (and how to correct inaccuracies in the reports and scores), and their effect on credit terms; (c) Teach participants about the significance of credit reports and credit scores; what their rights are regarding their credit and financial information; how to determine the accuracy of a credit report and how to correct inaccuracies; and how to improve or maintain good credit; (iv) supporting the ability to understand, evaluate, and compare financial products, services, and opportunities; and (d)Support a participant’s ability to understand, evaluate, and compare financial products, services, and
FinancialLiteracy_inWIOA_andtheNPRM4_29_15.docx