BILL NUMBER: AB 1927	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 19, 2014
	AMENDED IN SENATE  JUNE 4, 2014
	AMENDED IN ASSEMBLY  MAY 5, 2014
	AMENDED IN ASSEMBLY  APRIL 10, 2014

INTRODUCED BY   Assembly Member Frazier

                        FEBRUARY 19, 2014

   An act to add Section 69505.7 to the Education Code, relating to
student financial aid.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1927, as amended, Frazier. Student financial aid: debit cards.
   Existing law provides for the missions and functions of the
private and public segments of postsecondary education in the state.
Existing law establishes various student financial aid programs for
students attending all segments of postsecondary education.
   This bill would require the Board of Governors of the California
Community Colleges and the Trustees of the California State
University, and  would  request the Regents of the
University of California and the governing bodies of accredited
private nonprofit and for-profit postsecondary educational
institutions, to adopt policies to be used for negotiating contracts
between their postsecondary educational institutions and banks and
other financial institutions to disburse a student's financial aid
award and other refunds onto a debit card, prepaid card, or preloaded
card that best serves the needs of the students. The bill would
require the policies to ensure that contracts between postsecondary
educational institutions and banks or other financial institutions to
disburse a student's financial aid award  are consistent with
  certain provisions of federal law, and, in addition, 
do certain  other  things, including,  among other
things,  prohibit the sale or sharing of personal
information, as defined, that the student or the postsecondary
educational institution provides the bank or other financial
institution,  except  as specified; prohibit the
bank or other financial institution from imposing a point-of-sale
transaction fee on a student for the use of the debit card, prepaid
card, or preloaded card; provide a clear and conspicuous disclosure
to students of all fees associated with the debit card, prepaid card,
or preloaded card;  ensure that a student does not incur any
cost in opening the account or initially receiving the card; not
market or portray the account or card as a credit card or credit
instrument, or subsequently convert the card to a credit card or
credit instrument;  and require the postsecondary
educational institution to disclose to students the benefits and
student responsibilities for all financial aid disbursement options
offered by the postsecondary educational institution.
   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.  Section 69505.7 is added to the Education Code, to
read:
   69505.7.  (a) The Board of Governors of the California Community
Colleges and the Trustees of the California State University shall,
and the Regents of the University of California and the governing
bodies of accredited private nonprofit and for-profit postsecondary
educational institutions are requested to, adopt policies to be used
for negotiating contracts between their postsecondary educational
institutions and banks and other financial institutions to disburse a
student's financial aid award and other refunds onto a debit card,
prepaid card, or preloaded card that best serves the needs of the
students.
   (b) The policies adopted pursuant to subdivision (a) 
shall, consistent with federal law, including Section 668.164 of
Title 34 of the Code of Federal Regulations,   shall
 ensure that contracts between postsecondary educational
institutions and banks or other financial institutions to disburse a
student's financial aid award and other refunds onto a debit card,
prepaid card, or preloaded card  do at least all of the
following:   meet both of the following sets of
requirements:  
   (1) The policies shall ensure that those contracts are consistent
with federal law, including, but not limited to, provisions in
federal law that require these contracts to do all of the following:
 
   (A) Ensure that the student does not incur any cost in opening the
account or initially receiving the debit card, prepaid card, or
preloaded card, as provided in Section 668.164(c)(3)(iv) of the Code
of Federal Regulations, as that section read on July 1, 2011. 

   (B) Ensure that the student has convenient access to a branch
office of the bank or an automated teller machine of the bank in
which the account was opened or of another bank, so that the student
does not incur any cost in making withdrawals from that office or
those automated teller machines, and that the branch office or
automated teller machines be located on the postsecondary educational
institution's campus, in an institutionally owned or operated
facility, or immediately adjacent to and accessible from the campus,
as provided in Section 668.164(c)(3)(v) of the Code of Federal
Regulations, as that section read on July 1, 2011.  
   (C) Ensure that the debit card, prepaid card, or preloaded card
can be widely used, as provided in Section 668.164(c)(3)(vi) of the
Code of Federal Regulations, as that section read on July 1, 2011.
 
   (D) Forbid the marketing or portrayal of the account or debit
card, prepaid card, or preloaded card as a credit card or credit
instrument, and the subsequent conversion of the account or debit
card, prepaid card, or preloaded card to a credit card or credit
instrument, as provided in Section 668.164(c)(3)(vii) of the Code of
Federal Regulations, as that section read on July 1, 2011.  

   (2) In addition to the requirements specified in paragraph (1),
the policies shall do at least all of the following:  
   (1) 
    (A)  Prohibit revenue sharing between a postsecondary
educational institution and banks or other financial institutions.

   (2) 
    (B)  Prohibit the sale or sharing of personal
information, as defined in paragraph (1) of subdivision (d) of
Section 1798.81.5 of the Civil Code, that the student or the
postsecondary educational institution provides the bank or other
financial institution, unless it is necessary for the purpose of
providing services related to the opening or maintenance of a debit
card, prepaid card, or preloaded card account. The personal
information disclosed by the postsecondary educational institution or
solicited by the bank or other financial institution, and the
treatment of that information, shall be consistent with the federal
Family Educational Rights and Privacy Act of 2001 (20 U.S.C. Sec.
1232g).  
   (3) 
    (C)  Prohibit the bank or other financial institution
from imposing a point-of-sale transaction fee on a student for the
use of the debit card, prepaid card, or preloaded card. 
   (4) 
    (D)  Provide a clear and conspicuous disclosure to
students of all fees associated with the debit card, prepaid card, or
preloaded card. 
   (5) 
    (E)  If the debit card, prepaid card, or preloaded card
is cobranded, provide a clear and conspicuous disclosure to students
that the card is not endorsed by the postsecondary educational
institution. 
   (6) Ensure that the student does not incur any cost in opening the
account or initially receiving the debit card, prepaid card, or
preloaded card.  
   (7) (A) Ensure that the student has convenient access to a branch
office of the bank or an automated teller machine of the bank in
which the account was opened or of another bank, so that the student
does not incur any cost in making withdrawals from that office or
those automated teller machines.  
   (B) The branch office or automated teller machines must be located
on the postsecondary educational institution's campus, in an
institutionally owned or operated facility, or immediately adjacent
to and accessible from the campus.  
   (8) Ensure that the debit card, prepaid card, or preloaded card
can be widely used.  
   (9) Not market or portray the account or debit card, prepaid card,
or preloaded card as a credit card or credit instrument, or
subsequently convert the account or debit card, prepaid card, or
preloaded card to a credit card or credit instrument. 

   (10) 
    (F)  Require the postsecondary educational institution
to disclose to students the benefits and student responsibilities for
all financial aid disbursement options offered by the postsecondary
educational institution.
   (c) The policies adopted pursuant to subdivision (a) shall only
apply to negotiating contracts between a bank or other financial
institution and a postsecondary educational institution for purposes
of disbursing a student's financial aid award and other refunds onto
a debit card, prepaid card, or preloaded card.
   (d) For purposes of this section, a "bank or other financial
institution" includes, but is not limited to, a depository
institution or an entity that partners with one or more depository
institutions.