Mass. lawmaker files bill to require financial literacy for graduation, adopt SEC Reg BI as state standard

State Representative Jeffrey Rosario Turco filed House Bill No. 1331 on Jan. 15, 2025, in the Massachusetts House of Representatives proposing the "Financial Innovative Technologies Act" to require financial literacy as a required subject in public schools and to adopt the U.S. Securities and Exchange CommissionRegulation Best Interest (Reg BI) as the operative state standard for broker-dealers.

The bill would amend state law to require financial literacy instruction as a prerequisite to high school graduation and add a new Section 100 to Chapter 71 making financial literacy a required subject in public schools. It also says that, "notwithstanding any general or special law or regulation to the contrary," Reg BI under the Securities Exchange Act of 1934 would be the operative standard of conduct for broker-dealers and associated persons when making recommendations to retail customers, and that certain SEC interpretations of the Investment Advisers Act of 1940 would govern the "solely incidental" prong of the broker-dealer exclusion from the Advisers Act.

Why it matters: the bill addresses two distinct policy areas. The education provision would require public schools to incorporate financial literacy into existing curricula and set specific topics to be taught, while the regulatory provision would align state-level standards for broker-dealer conduct with federal SEC interpretations. Both changes would affect students, retail investors and financial firms operating in Massachusetts if the bill becomes law.

The classroom requirements in the draft list a broad set of topics for financial literacy instruction, including loans and interest accrual; credit card debt; online commerce; rights and responsibilities of renting or buying a home; saving, investing and retirement planning; the role of banking and financial services; balancing a checkbook; state and federal taxes; charitable giving; evaluating media and online content related to personal finance; protecting assets and avoiding online scams; and "emerging technologies in the financial industry," including a basic understanding of cryptocurrencies and online stock trading. The bill also says school districts, charter schools and approved private schools shall incorporate the standards into existing courses such as mathematics, history and social sciences, technology or business.

On regulation, the bill states that Reg BI under the Securities Exchange Act of 1934 shall be the operative standard of conduct for broker-dealers and associated persons when recommending securities transactions or investment strategies to retail customers. The draft further references SEC interpretations concerning investment advisers' standards under the Investment Advisers Act of 1940 and the "solely incidental" broker-dealer exclusion.

The filing document notes that 22 states already require financial literacy instruction as a prerequisite for high school graduation. The bill text does not specify funding mechanisms, an implementation timeline beyond "as of the effective date of this Act," or a committee referral; it was filed as a petition and listed under the subject heading "Financial Services."

No formal legislative action, vote or committee decision is included in the filing document.

Next steps: as filed, the proposal would require standard legislative consideration in the General Court; the bill text does not record enactment, appropriation of funds, or an effective date beyond the general phrase in the draft.

Sources: House Bill No. 1331, filed Jan. 15, 2025, by Representative Jeffrey Rosario Turco.