BILL NUMBER: AB 1664	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Montanez

                        FEBRUARY 21, 2003

   An act to add Division 1.4 (commencing with Section 4200) to the
Financial Code, relating to financial institutions.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1664, as introduced, Montanez.  Bank Customer Bill of Rights
Act.
   Existing law provides for regulation of banks by the Department of
Financial Institutions.  Existing law prohibits a person originating
certain consumer loans from steering, counseling, or directing a
prospective consumer to accept a loan product with a risk grade that
is less favorable than the risk grade the consumer would qualify for.
  Existing law prohibits certain financial institutions operating an
automated teller machine from imposing a surcharge on a customer for
the usage of the machine whether or not the customer is using an
access device issued by the financial institution unless the
surcharge is clearly disclosed to the customer at the machine.
   This bill would enact the Bank Customer Bill of Rights that would
prohibit banks from engaging in various acts, including selling
private credit information about a customer to a marketing business
without the customer's consent, charging customers using the bank's
automated teller machine cards an overdraft penalty that is $30 or
more without providing a specified notice, issuing a credit card that
has an interest rate that is greater than 2% above the prime rate,
and charging a customer with a higher than average interest rate on a
loan if the customer qualifies for a lower interest rate and the
bank has not made the customer aware of that fact.
   Vote:  majority.  Appropriation:  no.  Fiscal committee:  no.
State-mandated local program:  no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Division 1.4 (commencing with Section 4200) is added to
the Financial Code, to read:

      DIVISION 1.4.  BANK CUSTOMER BILL OF RIGHTS
      CHAPTER 1.  GENERAL PROVISIONS

   4200.  This division shall be known and may be cited as the Bank
Customer Bill of Rights Act.
   4201.  For the purposes of this division, the following
definitions shall apply:
   (a) "Automated teller machine" means any electronic information
processing device located in California that accepts or dispenses
cash in connection with a credit, deposit, or convenience account.
The term does not include devices used solely to facilitate check
guarantees or check authorizations, or that are used in connection
with the acceptance or dispensing of cash on a person-to-person basis
such as by a store cashier.
   (b) "Bank" means a California state bank or a foreign (other
nation) bank that is licensed under Article 3 (commencing with
Section 1750) of Chapter 13.5 to maintain one or more retail branch
offices, as defined in Section 1700.
   (c) "Customer" means one or more natural persons that have an
account with a bank.
      CHAPTER 2.  PROHIBITED ACTS

   4210.  No bank may sell private credit information about a
customer to a marketing business for profit without the customer's
consent.
   4211.  No bank may charge customers using the bank's automated
teller machine cards an overdraft penalty that is thirty dollars
($30) or more without providing prior notice to customers of the
cumulative charges.
   4212.  No bank may issue a credit card that has an interest rate
that is greater than 2 percent above the prime rate.
   4213.  No bank may charge a customer a higher than average
interest rate on a loan if the customer qualifies for a lower
interest rate on the loan and the bank has not made the customer
aware of that fact.