Today's Law As Amended

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AB-385 Bank on California Program.(2013-2014)

As Amends the Law Today


 Division 23 (commencing with Section 80000) is added to the Financial Code, to read:


 The Legislature finds and declares all of the following:
(a) “Bank on California” is a voluntary collaborative initiative among local governments, state officials, the department, financial institutions, and community-based organizations that assists Californians in opening a bank or credit union account and helps Californians enter the financial mainstream.
(b) The goal of the Bank on California Program is to financially empower lower income consumers by making it easier and more affordable for them to deposit their paychecks, pay their bills, and start saving.
(c) The Bank on California Program increases the supply of starter account products that work for low-income, unbanked Californians by developing baseline product criteria that must be offered by all participating financial institutions.
(d) The Bank on California Program raises awareness amongst unbanked consumers about the benefits of account ownership and spurs Californians to open accounts.
(e) The Bank on California Program makes quality money management education more easily available to low-income Californians and raises statewide awareness of the unbanked problem and potential solutions.
(f) An estimated 7.8 percent of Californians are unbanked and an additional 18 percent are considered underbanked.
(g) The average unbanked Californian pays one thousand dollars ($1,000) to cash a year’s worth of paychecks.
(h) Californians with bank accounts are more likely to save, have higher credit scores, and get better priced car and home loans.
(i) Bank on California programs are located in Fresno, Los Angeles, Oakland, Sacramento, San Francisco, Napa Valley, Orange County, Stanislaus, American Canyon, Central Coast, and San Jose.
 There is hereby established in the department the Bank on California Program.
 For purposes of this division, the following terms have the following meanings:
(a) “Commissioner” means the Commissioner of Business Oversight.
(b) “Department” means the Department of Business Oversight.
(c) “Program” means the Bank on California Program.
(d) “Unbanked” means any individual or household that lacks any kind of deposit account at an insured depository institution.
 (a) The program shall provide support and coordination to regional programs located in communities throughout California. Regional programs shall be voluntary, public-private initiatives led by local government, in partnership with financial institutions and community-based organizations. Regional programs shall negotiate with financial institutions to provide unbanked, low- to moderate-income individuals with access to free or low-cost banked accounts and shall promote financial education.
(b) Participating financial institutions shall agree to do all of the following:
(1) Offer a low- or no-cost checking account with no monthly minimum balance requirement.
(2) Adapt internal systems to allow a customer with a negative banking history or Chex Systems record to open an account.
(3) Accept Consular identity cards and other alternative forms of identification as primary identification.
(4) Waive one set of nonsufficient funds or overdraft fees per program participant per year.
(5) Report data to the commissioner on a quarterly basis on key metrics, including, but not limited to, the number of program accounts opened and closed, the ZIP Codes of program accountholders, and the average and median monthly balances of program accounts.
(6) Train branch staff on program policies and procedures.
(7) Participate in outreach activities to promote the program to low-income communities.
 Commencing in 2014, the commissioner shall, in coordination with regional programs, conduct the following activities:
(a) Request and collect the following data from participating financial institutions on a quarterly basis, sharing this data with regional programs as necessary:
(1) The total number of program accounts opened.
(2) The total number of previously opened program accounts closed.
(3) The ZIP Codes of program accountholders.
(4) The median and average account balances of all open program accounts.
(b) Provide the appropriate Senate and Assembly policy and fiscal committees with a brief annual summary on the activities of the program. The commissioner shall request information from regional programs in order to complete this report, which shall include, but is not limited to, the following:
(1) Data on program account opening, closing, account balance, and customer ZIP Codes presented by location and quarter, as well as cumulatively.
(2) Adherence by participating financial institutions to negotiated account features.
(3) Financial institution activities in support of regional programs, including branch trainings, data reporting, participation in meetings and activities, and other program outcomes reported by regional programs.
(c) Pursue voluntary agreements with financial institutions with a presence throughout California to offer program-style products throughout their California footprint, not only in localities with programs.
(d) Identify geographic localities with a high density of unbanked individuals and households and no existing program and work with local leaders in these locations to support the establishment of new programs.
(e) In coordination with regional program leadership, provide support to regional programs throughout California by:
(1) Establishing guidelines and best practices for programs.
(2) Providing information and guidance on regulatory and other banking issues.
(3) Intervening on behalf of regional programs if a participating financial institution is not adhering to program commitments.
(4) Providing assistance, as needed, to disseminate program materials and other information.
(5) Hosting one convening per year for all programs, including local leadership and participating financial institutions.