BILL ANALYSIS

 

 

Senate Research Center

H.B. 4655

89R1528 AMF-D

By: Hull (West)

 

Health & Human Services

 

5/12/2025

 

Engrossed

 

 

 

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

 

Texas foster youth are having severely negative experiences while transitioning into adulthood. Many are falling victim to payday loans and other subprime financial products. Others are signing rental contracts and leases that are subjecting them to negative housing experiences. Others, still, are struggling to maintain their enrollment in public assistance programs, like health insurance.

 

Regarding predatory lending, legislators have been approached by foster children who have been victimized by these practices. These transitioning youth have asked for additional resources to better understand predatory lending practices, including payday loans or buy-here-pay-here motor vehicle loans.

 

Regarding rental contacts, foster youth have approached legislators in search of remedy for negative leasing experiences. Foster youth have little experience with, or an individual to advocate for them on, leasing and rental contracts. As a result, many are signing contracts unaware of the complex nature of these documents.

 

Foster youth are also experiencing difficulty maintaining their enrollment in public assistance programs. In Texas, a substantial number of foster youth are out of the system by their 19th birthday; according to The Annie E. Casey Foundation 2023 Transition-Age Youth in Foster Care state profile, only seven percent of Texas youth were in foster care by their 19th birthday, compared to 24 percent nationwide. Being out of foster care can have detrimental effects on transition outcomes: According to the National Youth in Transition Database Outcomes Data Snapshot, 98 percent of Texas foster youth still in care at age 19 were enrolled in Medicaid, compared to only 76 percent of those who were no longer in care.

 

To address issues related to foster youth transition into adulthood, Texas has adopted the Transitional Living Services Program under the Texas Family Code, Section 264.121. The current financial literacy education program does not require foster care providers to instruct foster children on the risks of payday loans, other subprime financial products, or on maintaining enrollment in public assistance programs.

 

Since nearly all Texas foster youth are out of the foster care system by age 19, the legislature must be diligent in updating its Transitional Living Services Program to include the emerging negative transition experiences of its foster youth.

 

H.B. 4655 will add several financial literacy, housing, and public assistance enrollment instructions to the list of required topics under the Transitional Living Services Program.

 

Under the financial literacy section, foster care providers will be required to instruct transitioning foster youth on the risks of paydays loans; interest rates and usurious interest; and financing a motor vehicle, including types of financing and the risks of buy-here-pay-here motor vehicle loans.

 

Under the housing needs section, foster care providers will be required to review with transition foster youth a common rental contract.

 

This bill will also add an additional section regarding public assistance enrollment. Under this section, foster care providers will be required to instruct foster youth on securing or transferring public assistance the youth may qualify for.

 

H.B. 4655 amends current law relating to the Preparation for Adult Living Program and other services for foster children transitioning to independent living.

 

RULEMAKING AUTHORITY

 

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

 

SECTION BY SECTION ANALYSIS

 

SECTION 1. Amends Section 264.121, Family Code, by amending Subsections (a-2) and (i) and adding Subsection (j), as follows:

 

(a-2) Requires that the experiential life-skills training under Subsection (a-1) (relating to requiring the Department of Family and Protective Services (DFPS) to address the unique challenges facing foster children) include a financial literacy education program developed in collaboration with the Office of Consumer Credit Commissioner and the State Securities Board that:

 

(1) includes instruction on certain subjects, including obtaining and interpreting a credit score, including information about different scores produced by credit reporting agencies; the risks of payday loans, unsecured loans, and motor vehicle title loans; avoiding predatory lending practices, including an explanation of interest rates and usurious interest; identifying and avoiding financial scams; and using basic banking and accounting skills, including opening and using a bank account, balancing a checkbook, and creating a balanced budget; and

 

(2) for youth who are 17 years of age or older, lessons related to certain subjects, including financing a motor vehicle, including information about the types of financing available for the purchase of a motor vehicle and the risks of subprime and buy-here-pay-here motor vehicle loans, and insurance, including applying for and obtaining motor vehicle, rather than automobile, insurance and residential property insurance, including tenants insurance.

 

Makes nonsubstantive changes to this subsection.

 

(i) Requires DFPS to ensure that the transition plan for each youth 16 years of age or older includes certain provisions to assist the youth in managing the youth's housing needs after the youth leaves foster care, including provisions that require DFPS to review a common rental application and a common rental contract with the youth and ensure that the youth possesses all of the documentation required to obtain rental housing.

 

(j) Requires DFPS to ensure that the transition plan for each youth 16 years of age or older includes information about securing or transferring governmental assistance the youth may qualify for, including social security benefits; veteran or service member benefits; supplemental nutrition assistance; special supplemental nutrition assistance for women, infants, and children; temporary housing for needy families; and housing assistance.

 

SECTION 2. Effective date: September 1, 2025.