Today's Law As Amended


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SB-497 Qualifying accounts for direct deposit of publicly administered funds.(2021-2022)



As Amends the Law Today


SECTION 1.

 Section 17325 of the Family Code is amended to read:

17325.
 (a) (1) Notwithstanding any other law, if child support payments are directly deposited to an account of the recipient’s choice, as authorized under the federal Electronic Fund Transfer Act (EFTA) (15 U.S.C. Sec. 1693 et seq.), the payments may only be deposited to an account that meets the requirements of a qualifying account, as defined in paragraph (2), for deposit of child support payments.
(2) For purposes of this section, a “qualifying account” is one of the following:
(A) A demand deposit or savings account at an insured financial institution  depository financial institution that is offered directly by the insured depository financial institution on its internet website or through its branches and that is  in the name of the person entitled to the receipt of child support payments.
(B) A prepaid card account  account, or a demand deposit or savings account offered by, or through, an entity other than an insured depository financial institution,  that meets all of the following:
(i) The account is held at an insured depository  financial institution.
(ii) The account is set up to meet the requirements for direct or  passthrough deposit or share insurance so that the funds accessible through the account are eligible for insurance for the benefit of the  payable to the  person entitled to the receipt of child support payments by the Federal Deposit Insurance Corporation in accordance with Part 330 of Title 12 of the Code of Federal Regulations, or the National Credit Union Share Insurance Fund in accordance with Part 745 of Title 12 of the Code of Federal Regulations.
(iii) The account is not attached to any a  credit or overdraft feature that is automatically repaid from the account after delivery of the payment. unless the credit or overdraft feature has no fee, charge, or cost, whether direct, required, voluntary, or involuntary, or the credit or overdraft feature complies with the requirements for credit offered in connection with a prepaid account under the federal Truth in Lending Act (15 U.S.C. Sec. 1601 et seq.) and its implementing regulations. 
(iv) The issuer of the card  account  complies with all of the requirements, and provides the holder of the card account  with all of the consumer protections, that apply to a payroll card  an  account under the rules implementing the EFTA or other rules subsequently adopted under the EFTA that apply to prepaid card accounts. EFTA. 
(3) A person or entity that issues a prepaid card or maintains or manages a prepaid card  is not an insured depository financial institution that offers, maintains, or manages an  account that does not comply with paragraph (2) shall not accept  solicit, accept,  or facilitate the direct deposit of child support payments to the prepaid card  account.
(b) For purposes of this section, the department shall not be held liable for authorizing a direct deposit of child support payments into a prepaid card  an  account designated by the recipient that does not comply with paragraph (2) of subdivision (a). The department has no obligation to determine whether an account at the insured depository  financial institution of the recipient’s choice is a qualifying account as described in subdivision (a).
(c) For the purposes of this section, the following definitions shall apply:
(1) “Financial  “Insured depository financial  institution” means a state or national bank, a state or federal savings and loan association, a mutual savings bank, or a state or federal credit union. union that holds deposits insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration. 
(2) “Issuer” means a person or entity that issues a prepaid card.
(3) (2)  “Payroll card account” shall have  “Prepaid account” has  the same meaning as that term is defined in the  regulations implementing under  the EFTA.
(4) “Prepaid card” or “prepaid card account” means either of the following:
(A) A card, code, or other means of access to funds of a recipient that is usable at multiple, unaffiliated merchants for goods or services, or usable at automated teller machines.
(B) The same as those terms or related terms are defined in the regulations adopted under the EFTA regarding general use reloadable cards.

SEC. 2.

 Section 1339.1 of the Unemployment Insurance Code is amended to read:

1339.1.
 (a) (1) Notwithstanding any other provisions of  this part, if unemployment compensation benefit payments are directly deposited to an account of the recipient’s choice, as authorized under the federal Electronic Fund Transfer Act (EFTA) (15 U.S.C. Sec. 1693 et seq.), the payments may only be deposited to an account that meets the requirements of a qualifying account, as defined in paragraph (2), for deposit of public assistance payments, including unemployment compensation benefits.
(2) For purposes of this section, a “qualifying account” is one of the following:
(A) A demand deposit or savings account at an insured financial institution  depository financial institution that is offered directly by the insured depository financial institution on its internet website or through its branches and that is  in the name of the person entitled to receipt of public assistance payments.
(B) A prepaid card account  account, or a demand deposit or savings account offered by, or through, an entity other than an insured depository financial institution,  that meets all of the following:
(i) The account is held at an insured depository  financial institution.
(ii) The account is set up to meet the requirements for direct or  passthrough deposit or share insurance so that the funds accessible through the account are eligible for insurance for the benefit of the  payable to the  person entitled to the receipt of public assistance payments by the Federal Deposit Insurance Corporation in accordance with Part 330 of Title 12 of the Code of Federal Regulations, or the National Credit Union Share Insurance Fund in accordance with Part 745 of Title 12 of the Code of Federal Regulations.
(iii) The account is not attached to any a  credit or overdraft feature that is automatically repaid from the account after delivery of the payment. unless the credit or overdraft feature has no fee, charge, or cost, whether direct, required, voluntary, or involuntary, or the credit or overdraft feature complies with the requirements for credit offered in connection with a prepaid account under the federal Truth in Lending Act (15 U.S.C. Sec. 1601 et seq.) and its implementing regulations. 
(iv) The issuer of the card  account  complies with all of the requirements, and provides the holder of the card account  with all of the consumer protections, that apply to a payroll card  an  account under the rules implementing the EFTA or other rules subsequently adopted under the EFTA that apply to prepaid card accounts. EFTA. 
(3) A person or entity that issues a prepaid card or maintains or manages a prepaid card  is not an insured depository financial institution that offers, maintains, or manages an  account that does not comply with paragraph (2) shall not accept  solicit, accept,  or facilitate the direct deposit of unemployment compensation benefit payments to the prepaid card  account.
(b) The department has no obligation to determine whether an account at the insured depository  financial institution of the recipient’s choice is a qualifying account, as described in subdivision (a). For purposes of this section, the department shall not be held liable for authorizing a direct deposit of unemployment compensation benefit payments into a prepaid card  an  account designated by the recipient that does not comply with paragraph (2) of subdivision (a).
(c) For the purposes of this section, the following definitions shall apply:
(1) “Financial  “Insured depository financial  institution” means a state or national bank, a state or federal savings and loan association, a mutual savings bank, or a state or federal credit union. union that holds deposits insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration. 
(2) “Issuer” means a person or entity that issues a prepaid card.
(3) (2)  “Payroll card account” shall have  “Prepaid account” has  the same meaning as that term is defined in the  regulations implementing under  the EFTA.
(4) “Prepaid card” or “prepaid card account” means either of the following:
(A) A card, code, or other means of access to funds of a recipient that is usable at multiple, unaffiliated merchants for goods or services, or usable at automated teller machines.
(B) The same as those terms or related terms are defined in the regulations adopted under the EFTA regarding general use reloadable cards.

SEC. 3.

 Section 2701 of the Unemployment Insurance Code is amended to read:

2701.
 (a)  Disability benefits shall be paid by the department through public employment offices or other agencies approved by the director.
(b) Before commencing payment, the department shall provide a person entitled to receive disability benefits or family temporary disability insurance benefits under Chapter 7 (commencing with Section 3300) with the option to receive payments by direct deposit into a qualifying account of the recipient’s choice, in addition to other alternative disbursement payment methods, including, but not limited to, checks.
(c) (1) Notwithstanding any other law, if disability benefits or family temporary disability insurance benefits are directly deposited to an account of the recipient’s choice, as authorized under the federal Electronic Fund Transfer Act (EFTA) (15 U.S.C. Sec. 1693 et seq.), the payments shall only be deposited to an account that meets the requirements of a qualifying account, as defined in paragraph (3) of subdivision (e).
(2) A person or entity that is not an insured depository financial institution that offers, maintains, or manages an account that does not comply with paragraph (3) of subdivision (e) shall not solicit, accept, or facilitate the direct deposit of disability benefits or family temporary disability insurance benefits to the account.
(d) For purposes of this section, the department shall not be held liable for authorizing a direct deposit of disability benefits or family temporary disability insurance benefits into an account designated by the recipient that does not comply with paragraph (3) of subdivision (e). The department has no obligation to determine whether an account at the insured depository financial institution of the recipient’s choice is a qualifying account, as described in paragraph (3) of subdivision (e).
(e) For the purposes of this section, the following definitions shall apply:
(1) “Insured depository financial institution” means a state or national bank, a state or federal savings and loan association, a mutual savings bank, or a state or federal credit union that holds deposits insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration.
(2) “Prepaid account” has the same meaning as that term is defined in regulations under the EFTA.
(3) “Qualifying account” is one of the following:
(A) A demand deposit or savings account at an insured depository financial institution that is offered directly by the insured depository financial institution on its internet website or through its branches and that is in the name of the person entitled to the receipt of disability benefits or family temporary disability insurance benefits.
(B) A prepaid account, or a demand deposit or savings account offered by, or through, an entity other than an insured depository financial institution, that meets all of the following:
(i) The account is held at an insured depository financial institution.
(ii) The account is set up to meet the requirements for direct or passthrough deposit or share insurance payable to the person entitled to the receipt of disability benefits or family temporary disability insurance benefits by the Federal Deposit Insurance Corporation in accordance with Part 330 of Title 12 of the Code of Federal Regulations, or the National Credit Union Share Insurance Fund in accordance with Part 745 of Title 12 of the Code of Federal Regulations.
(iii) The account is not attached to a credit or overdraft feature that is automatically repaid from the account unless the credit or overdraft feature has no fee, charge, or cost, whether direct, required, voluntary, or involuntary, or the credit or overdraft feature complies with the requirements for credit offered in connection with a prepaid account under the federal Truth in Lending Act (15 U.S.C. Sec. 1601 et seq.) and its implementing regulations.
(iv) The account complies with all of the requirements, and provides the holder of the account with all of the consumer protections, that apply to an account under the rules implementing the EFTA.

SEC. 4.

 Section 11006.2 of the Welfare and Institutions Code is amended to read:

11006.2.
 (a) The department may provide for the delivery of public assistance payments at any time during the month.
(b) (1) Notwithstanding any other law, any person entitled to the receipt of public assistance payments may authorize payment to be directly deposited by electronic fund transfer into the person’s qualifying account at the insured depository  financial institution of his or her  the person’s  choice under a program for direct deposit by electronic transfer as established in this section. The direct deposit to a qualifying account shall discharge the department’s obligation with respect to the payment.
(2) Each county treasurer shall make an agreement with one or more insured depository  financial institutions participating in the Automated Clearing House pursuant to the local rules, and shall, by December 1, 2001, establish a program for the direct deposit by electronic fund transfer of payments to any person entitled to the receipt of public assistance benefits who authorizes the direct deposit of the benefits into the person’s qualifying account at the insured depository  financial institution of his or her  the person’s  choice. Each county treasurer has no obligation to determine whether the account at the insured depository  financial institution of the person’s choice is a qualifying account, as defined in paragraph (3).
(3) For purposes of this section, a “qualifying account” is one of the following:
(A) A demand deposit or savings account at an insured financial institution  depository financial institution that is offered directly by the insured depository financial institution on its internet website or through its branches and that is  in the name of the person entitled to receipt of public assistance payments.
(B) A prepaid card account  account, or a demand deposit or savings account offered by or through an entity other than an insured depository financial institution,  that meets all of the following:
(i) The account is held at an insured depository  financial institution.
(ii) The account is set up to meet the requirements for direct or  passthrough deposit or share insurance so that the funds accessible through the account are eligible for insurance for the benefit of the  payable to the  person entitled to the receipt of public assistance payments by the Federal Deposit Insurance Corporation in accordance with Part 330 of Title 12 of the Code of Federal Regulations, or the National Credit Union Share Insurance Fund in accordance with Part 745 of Title 12 of the Code of Federal Regulations.
(iii) The account is not attached to any a  credit or overdraft feature that is automatically repaid from the account after delivery of the payment. unless the credit or overdraft feature has no fee, charge, or cost, whether direct, required, voluntary, or involuntary, or the credit or overdraft feature complies with the requirements for credit offered in connection with a prepaid account under the federal Truth in Lending Act (15 U.S.C. Sec. 1601 et seq.) and its implementing regulations. 
(iv) The issuer of the card  account  complies with all of the requirements, and provides the holder of the card account  with all of the consumer protections, that apply to a payroll card  an  account under the rules implementing the federal  Electronic Fund Transfer Act (EFTA) (15 U.S.C. Sec. 1693 et seq.) or other rules subsequently adopted under the EFTA that apply to prepaid card accounts. seq.). 
(4) A person or entity that issues a prepaid card or maintains or manages a prepaid card  is not an insured depository financial institution that offers, maintains, or manages an  account that does not comply with paragraph (3) shall not accept  solicit, accept,  or facilitate the direct deposit of public assistance payments to the prepaid card  account.
(5) For purposes of this section, each county treasurer and county welfare department shall not be held liable for authorizing a direct deposit of public assistance payments into a prepaid card  an  account, designated by the person entitled to receipt of public assistance benefits, that does not comply with paragraph (3).
(6) This subdivision shall apply in each county that offers a program for direct deposit by electronic funds transfer to some or all of its employees.
(c) For the purposes of this section, the following definitions shall apply:
(1) “Financial  “Insured depository financial  institution” means a state or national bank, a state or federal savings and loan association, a mutual savings bank, or a state or federal credit union. union that holds deposits insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration. 
(2) “Issuer” means a person or entity that issues a prepaid card.
(3) (2)  “Payroll card account” shall have  “Prepaid account” has  the same meaning as that term is defined in the  regulations implementing under  the EFTA.
(4) “Prepaid card” or “prepaid card account” means either of the following:
(A) (d)  A (1)   card, code, or other means of access to funds of a recipient that is usable at multiple, unaffiliated merchants for goods or services, or usable at automated teller machines. Notwithstanding the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code), the department may implement, administer, interpret, or make specific this section by means of all-county letters or similar written instructions from the department. These all-county letters or similar instructions shall have the same force and effect as regulations. 
(B) (2)  The same as those terms or related terms are defined in the regulations adopted under the EFTA regarding general use reloadable cards. Any all-county letters or similar written instructions that the department elects to issue pursuant to paragraph (1) shall be issued no later than October 1, 2022. 
SEC. 5.
 If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.