AB 1280, as amended, John A. Pérez. Public assistance payments and unemployment compensation benefits: electronic fund transfer: qualifying accounts.
Existing law provides for protection, care, and assistance for people of the state, and the promotion of the welfare and happiness of all people in the state by providing appropriate aid and services to the needy and distressed. Programs established for this purpose include the California Work Opportunity and Responsibility to Kids (CalWORKs) Program, which provides cash assistance and other social services to needy families, using federal Temporary Assistance for Needy Families (TANF) block grant program, state, and county funds, and CalFresh, whereby nutrition assistance benefits allocated to the state by the federal government are distributed to eligible individuals by each county. Counties administer the CalWORKs and CalFresh programs.
Existing law authorizes the State Department of Social Services to provide for the delivery of public assistance payments at any time during the month and authorizes any person entitled to the receipt of public assistance payments to authorize payment to be directly deposited by electronic fund transfer into the person’s account at a financial institution of his or her choice under a program of direct deposit by electronic transfer established by the county treasurer. Existing law requires each county treasurer to make an agreement with one or more financial institutions participating in the Automated Clearing House and to, 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 account at the financial institution of his or her choice.
This bill would instead authorize a person entitled to receipt of public assistance payments to authorize payment to be directly deposited by electronic fund transfer to a qualifying account, as defined, at a financial institution of his or her choice under a program for direct deposit by electronic transfer, as established by the bill. The bill would require qualifying accounts to meet specified requirements. The bill would provide that each county treasurer has no obligation to determine whether the account at the financial institution of the person’s choice is a qualifying account, as specified.
Existing law also provides for unemployment compensation benefits to eligible persons who are unemployed through no fault of their own. These provisions are generally administered by the Employment Development Department.
This bill would, if unemployment compensation benefit payments are directly deposited to an account of the recipient’s choice, require that the payments only be deposited to a qualifying account, as defined. The bill would provide that the Employment Development Department has no obligation to determine whether an account at the financial institution of the recipient’s choice is a qualifying account, as specified.
This bill would prohibit a person or entity that issues a prepaid card or maintains or manages a prepaid card account, as defined, from accepting or facilitating the direct deposit of public assistance payments or unemployment compensation benefits to a prepaid card account that does not meet the requirements of a qualified account.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 1339.1 is added to the Unemployment
2Insurance Code, to read:
(a) (1) Notwithstanding any other provisions of this
4part, if unemployment compensation benefit payments are directly
5deposited to an account of the recipient’s choice, as authorized
6under the federal Electronic Fund Transfer Act (EFTA) (15 U.S.C.
7Sec. 1693 et seq.), the payments may only be deposited to an
8account that meets the requirements of a qualifying account, as
9defined in paragraph (2), for deposit of public assistance
payments,
10including unemployment compensation benefits.
11(2) For purposes of this section, a “qualifying account” is one
12of the following:
13(A) A demand deposit or savings account at an insured financial
14institution in the name of the person entitled to receipt of public
15assistance payments.
16(B) A prepaid card account that meets all of the following:
17(i) The account is held at an insured financial institution.
18(ii) The account is set up to meet the requirements for
19passthrough deposit or share insurance so that the funds accessible
20through the account arebegin delete insuredend deletebegin insert
eligible for insuranceend insert for the
21benefit of the person entitled to the receipt of public assistance
22payments by the Federal Deposit Insurance Corporation in
23accordance with Part 330 of Title 12 of the Code of Federal
24Regulations, or the National Credit Union Share Insurance Fund
25in accordance with Part 745 of Title 12 of the Code of Federal
26Regulations.
27(iii) The account is not attached to any credit or overdraft feature
28that is automatically repaid from the account after delivery of the
29payment.
30(iv) The issuer of the card complies with all of the requirements,
31and provides the holder of the card with all of the consumer
32protections, that apply to a payroll card account under the rules
33implementing the EFTA or other rules subsequently adopted
under
34the EFTA that apply to prepaid card accounts.
35(3) A person or entity that issues a prepaid card or maintains or
36manages a prepaid card account that does not comply with
37paragraph (2) shall not accept or facilitate the direct deposit of
P4 1begin delete public assistance payments, includingend delete unemployment compensation
2begin delete benefits,end deletebegin insert benefit paymentsend insert to the prepaid card account.
3(b) The department has no obligation to determine whether an
4account at the financial institution of the recipient’s choice is a
5qualifying account, as described in
subdivision (a). For purposes
6of this section, the department shall not be held liable for
7authorizing a direct deposit of unemployment compensation benefit
8payments into a prepaid card account designated by the recipient
9that does not comply with paragraph (2) of subdivision (a).
10(c) For the purposes of this section, the following definitions
11shall apply:
12(1) “Financial institution” means a state or national bank, a state
13or federal savings and loan association, a mutual savings bank, or
14a state or federal credit union.
15(2) “Issuer” means a person or entity that issues a prepaid card.
16(3) “Payroll card account” shall have the same meaning as that
17
term is defined in the regulations implementing the EFTA.
18(4) “Prepaid card” or “prepaid card account” means either of
19the following:
20(A) A card, code, or other means of access to funds of a recipient
21that is usable at multiple, unaffiliated merchants for goods or
22services, or usable at automated teller machines.
23(B) The same as those terms or related terms are defined in the
24regulations adopted under the EFTA regarding general use
25reloadable cards.
Section 11006.2 of the Welfare and Institutions Code
27 is amended to read:
(a) The department may provide for the delivery of
29public assistance payments at any time during the month.
30(b) (1) Notwithstanding any other law, any person entitled to
31the receipt of public assistance payments may authorize payment
32to be directly deposited by electronic fund transfer into the person’s
33qualifying account at the financial institution of his or her choice
34under a program for direct deposit by electronic transfer as
35established in this section. The direct deposit to a qualifying
36account shall discharge the department’s obligation with respect
37to the payment.
38(2) Each county treasurer shall make an agreement with one or
39more financial institutions participating in the Automated Clearing
40House pursuant to the local rules, and shall, by December 1, 2001,
P5 1establish a program for the direct deposit by electronic fund transfer
2of payments to any person entitled to the receipt of public
3assistance benefits who authorizes the direct deposit of the benefits
4into the person’s qualifying account at the financial institution of
5his or her choice. Each county treasurer has no obligation to
6determine whether the account at the financial institution of the
7person’s choice is a qualifying account, as defined in paragraph
8(3).
9(3) For purposes of this section, a “qualifying account” is one
10of the following:
11(A) A demand deposit or savings
account at an insured financial
12institution in the name of the person entitled to receipt of public
13assistance payments.
14(B) A prepaid card account that meets all of the following:
15(i) The account is held at an insured financial institution.
16(ii) The account is set up to meet the requirements for
17passthrough deposit or share insurance so that the funds accessible
18through the account arebegin delete insuredend deletebegin insert eligible for insuranceend insert for the
19benefit of the person entitled to the receipt of public assistance
20payments by the Federal Deposit Insurance Corporation in
21accordance
with Part 330 of Title 12 of the Code of Federal
22Regulations, or the National Credit Union Share Insurance Fund
23in accordance with Part 745 of Title 12 of the Code of Federal
24Regulations.
25(iii) The account is not attached to any credit or overdraft feature
26that is automatically repaid from the account after delivery of the
27payment.
28(iv) The issuer of the card complies with all of the requirements,
29and provides the holder of the card with all of the consumer
30protections, that apply to a payroll card account under the rules
31implementing the federal Electronic Fund Transfer Act (EFTA)
32(15 U.S.C. Sec. 1693 et seq.) or other rules subsequently adopted
33under the EFTA that apply to prepaid card accounts.
34(4) A
person or entity that issues a prepaid card or maintains or
35manages a prepaid card account that does not comply with
36paragraph (3) shall not accept or facilitate the direct deposit of
37public assistance payments to the prepaid card account.
38(5) For purposes of this section, each county treasurer and
39county welfare department shall not be held liable for authorizing
40a direct deposit of public assistance payments into a prepaid card
P6 1account, designated by the person entitled to receipt of public
2assistance benefits, that does not comply with paragraph (3).
3(6) This subdivision shall apply in each county that offers a
4program for direct deposit by electronic funds transfer to some or
5all of its employees.
6(c) For the purposes of this
section, the following definitions
7shall apply:
8(1) “Financial institution” means a state or national bank, a state
9or federal savings and loan association, a mutual savings bank, or
10a state or federal credit union.
11(2) “Issuer” means a person or entity that issues a prepaid card.
12(3) “Payroll card account” shall have the same meaning as that
13term is defined in the regulations implementing the EFTA.
14(4) “Prepaid card” or “prepaid card account” means either of
15
the following:
16(A) A card, code, or other means of access to funds of a recipient
17that is usable at multiple, unaffiliated merchants for goods or
18services, or usable at automated teller machines.
19 (B) The same as those terms or related terms are defined in the
20regulations adopted under the EFTA regarding general use
21reloadable cards.
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96