BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1292 (Dababneh) - Bank on California program
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|Version: February 27, 2015 |Policy Vote: B. & F.I. 7 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 17, 2015 |Consultant: Jolie Onodera |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 1292 would establish the Bank on California Program
within the Department of Business Oversight (DBO). This bill
would require, by August 30, 2016, and annually thereafter, the
DBO to report to the Legislature on the activities of the
program.
Fiscal
Impact: Potentially minor to significant future cost pressure
in excess of $150,000 (Special Fund*) to provide general
oversight and support of the program, including the production
of the legislative report, the costs of which would be dependent
on the level of resources committed to, and material included
in, the report.
Background: "Bank On" programs are voluntary collaborative programs in
which local agencies, typically municipalities and community
partners, form coalitions with financial institutions to reduce
AB 1292 (Dababneh) Page 1 of
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barriers to banking among unbanked (no checking or savings
account) and underbanked (checking and/or savings account but
additional use of alternative financial services such as
check-cashing services and payday loans) individuals, providing
households with access to mainstream financial products and
services, including low-cost checking and savings accounts and
access to free financial education opportunities.
In September 2006, the first Bank On program was launched in San
Francisco. It was the first comprehensive program in the country
to work collaboratively with financial institutions, local
government, financial regulators, and community-based
organizations to bank the unbanked.
In 2008, Bank on California was established and housed within
the Governor's Office of Planning and Research. Subsequently,
the program was shifted to the State and Consumer Services
Agency, and in 2012 was moved to the Department of Financial
Institutions (DFI). Finally, oversight of the program was
shifted to the DBO in 2013 when the DBO was formed through the
merger of the DFI and the Department of Corporations.
To date, within California, local Bank On programs have been
established in American Canyon, California Central Coast
(including Monterey, Santa Cruz, Salinas, and San Benito),
Fresno, Los Angeles, Oakland, Orange County, Napa Valley,
Sacramento (including Sacramento, Amador, El Dorado, Placer, and
Yolo), San Francisco, San Jose, and Stanislaus.
Proposed Law:
This bill would establish the Bank on California Program within
the DBO. Specifically, this bill:
Includes legislative findings declaring that the program
is a voluntary collaborative initiative that assists
Californians in opening a bank or credit union account and
saving for the future.
Requires the DBO to report annually no later than August
30th of each year to specified committees of the
Legislature on the activities of the program.
AB 1292 (Dababneh) Page 2 of
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Related
Legislation: AB 385 (Dickinson) 2013 would have housed the Bank
on California Program within DBO. This bill would have required
DBO to coordinate with regional programs to collect and report
specified program data, as well as provide support to regional
programs by establishing guidelines and best practices for
programs, provide information and guidance on regulatory and
other banking issues, intervening on behalf of regional programs
if a participating financial institution is not adhering to
program commitments, and hosting one convening per year for all
programs, including local leadership and participating financial
institutions. This bill was held on the Suspense File of this
Committee.
Staff
Comments: The DBO has indicated that currently, the costs of
this bill are minor and absorbable. While AB 1292 does not
expressly provide the DBO authority to administer or implement
the Bank On Program, requiring the DBO to produce a report could
potentially result in the DBO undertaking activities to produce
a meaningful report.
To produce a more substantial report, the DBO anticipates
potential costs in excess of $150,000 annually. This estimate
includes costs for resources to manage and oversee the program,
to include activities such as website hosting, printed
materials, travel, overhead, and one-time costs.
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