BILL NUMBER: AB 385 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 2, 2013
INTRODUCED BY Assembly Member Dickinson
FEBRUARY 14, 2013
An act to add Division 23 (commencing with Section 80000) to the
Financial Code, relating to financial institutions.
LEGISLATIVE COUNSEL'S DIGEST
AB 385, as amended, Dickinson. Bank on California
program. Program.
Existing law provides for the formation and regulation of
state-organized banks and state-certified credit unions by the
Department of Financial Institutions. The Governor's Reorganization
Plan No. 2 of 2012 provides that, on and after July 1, 2013, the
responsibilities of the Department of Financial Institutions and the
Commissioner of Financial Institutions shall be transferred to the
Department of Business Oversight and the Commissioner of Business
Oversight.
This bill would establish the Bank on California Program in the
Department of Business Oversight. The bill would require the
Bank on California Program to provide support and coordination to
regional programs in California that are voluntary, public-private
initiatives led by specified entities in partnership with
participating financial institutions. The bill would require
participating financial institutions to, among other things, provide
low- or no-cost checking accounts and report specified data to the
commissioner. The bill would also require the commissioner to
report annually to specified committees of the Legislature on the
activities of the program , including the data provided by
participating financial institutions, and to undertake specified
activities to promote the Bank on California Program .
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Division 23 (commencing with Section 80000) is added to
the Financial Code, to read:
DIVISION 23. BANK ON CALIFORNIA PROGRAM
80000. (a) The Legislature
finds and declares that "Bank on California" is a voluntary
collaborative initiative that assists Californians in opening a bank
or credit union account and saving for the future. all
of the following:
(b) There is hereby established in the department the Bank on
California Program.
(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 the 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.
80000.5. There is hereby established in the department the Bank
on California Program.
80001. For purposes of this division, the following terms have
the following meanings:
(a) "Commissioner" means the Commissioner of Business Oversight.
(a)
(b) "Department" means the Department of Business
Oversight.
(b)
(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.
80002. (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.
80002. 80003. Commencing in 2014,
the department shall provide the respective chairpersons of
the Senate Committee on Banking and Financial Institutions and the
Assembly Committee on Banking and Finance with a brief annual summary
on the activities of the program. The summary shall be submitted no
later than August 30 of each year. commissioner shall,
in coordination with local programs, conduct the following
activities:
(a) Request and collect the following data from participating
financial institutions on a quarterly basis, sharing this data with
local 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 respective chairpersons of the Senate Committee on
Banking and Financial Institutions and the Assembly Committee on
Banking and Finance with a brief annual summary on the activities of
the program. The commissioner shall request information from local
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 local programs,
including branch trainings, data reporting, participation in
meetings and activities, and other program outcomes reported by local
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 local program leadership, provide support
to local 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 local 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.