AB 1784, as amended, Dababneh. State banks.
Existing law defines and regulates state banks and commits the enforcement of banking laws with the Commissioner of Business Oversight. The Banking Law prescribes definitions relating to bank offices and defines a branch office as an office at which core banking business is conducted other than an automated teller machine, a device used to facilitate check guarantee or check authorization, or a remote service facility, as defined.
This bill wouldbegin delete provide, in the definitions that apply to regulating bank offices, for the authorization ofend deletebegin insert authorizeend insert a bank to participate in a financial education program that involves receiving deposits or paying withdrawals
on the premises of a school or school facility. The bill would provide that the school premises or facility will not be considered a branch office of the bank if certain conditions are met.begin insert The bill would specify that banks participating in these programs are still liable for deposits, as specified.end insert
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 1070 of the Financial Code is amended
2to read:
For purposes of this chapter, the following definitions
4apply:
5(a) “Automated teller machine” means any electronic
6information processing device used by a financial institution and
7its customers for the primary purpose of executing transactions
8solely between the financial institution and its customers, if the
9transactions are not incidental to sales between the customer and
10a business entity other than a financial institution.
11(b) “Branch office” means any office at which core banking
12business is conducted other than an automated teller machine, a
13device used to facilitate check guarantee or check authorization,
14or a remote service facility as
defined in subsection (d) of Section
15345.12 of Title 12 of the Code of Federal Regulations.
16(c) “Core banking business” means the business of receiving
17deposits, paying checks, making loans, and other activities that
18the commissioner may specify by order or regulation. “Core
19banking business,” when used to describe the trust business,
20includes receiving fiduciary assets and administering fiduciary
21accounts.
22(d) “Facility” means an office at which a bank engages in
23noncore banking business but at which it does not engage in core
24banking business.
25(e) “Head office” means the office designated by the bank as
26its headquarters.
27(f) “Noncore banking
business” means all activities permissible
28for banks, except core banking business, and except those activities
29prohibited by law or determined by the commissioner by regulation
30or order not to be noncore banking business.
31(g) “Office” means the head office, any branch office, and any
32facility office of a bank.
P3 1(h) “Redesignate offices” means (1) the relocation by a bank of
2its head office to the site of a branch or facility office in this state
3and the concurrent establishment by the bank of an office at the
4former site of the head office, or (2) the relocation by a bank of a
5branch office to the site of a facility office and the concurrent
6establishment by the bank of a branch or facility office at the
7former site of the branch office.
8(i) A bank may participate in a financial education program that
9involves receiving deposits or paying withdrawals on the premises
10of, or at a facility used by, a school. The school premises or facility
11will not be considered a branch office of the bank if:
12(1) The bank does not establish and operate the school premises
13or facility in which the program is conducted.
14(2) Bank employees work at the site only to participate in the
15program.
16(3) The program is provided at the discretion of the school.
17(4) The principal purpose of the program is financial education.
18For example, a program is educational if it is designed to teach
19students the principles of personal
financial management, banking
20operations, or the benefits of saving for the future, and is not
21designed for the purpose of profitmaking.
22(5) No services are provided to the general public.
23(6) The program is conducted in a manner that is consistent with
24safe and sound banking practices and complies with applicable
25law.
begin insertSection 1083 is added to the end insertbegin insertFinancial Codeend insertbegin insert, to
27read:end insert
(a) A bank may participate in a financial education
29program that involves receiving deposits or paying withdrawals
30on the premises of, or at a facility used by, a school. The school
31premises or facility will not be considered a branch office of the
32bank, as that term is defined in Section 1070 of the Financial Code,
33if all of the following conditions are met:
34
(1) The bank does not establish and operate the school premises
35or facility in which the program is conducted.
36
(2) Bank employees work at the site only to participate in the
37program.
38
(3) The program is provided at the discretion of the school.
39
(4) The principal purpose of the program is financial education.
40For example, a program is educational if it is designed to teach
P4 1students the principles of personal financial management, banking
2operations, or the benefits of saving for the future, and is not
3designed for the purpose of profitmaking.
4
(5) No services are provided to the general public.
5
(6) The program is conducted in a manner that is consistent
6with safe and sound banking practices and complies with
7applicable law.
8
(b) A bank that participates in a financial education program
9pursuant to this section shall be liable for all deposits made on
10the premises of, or at a facility used by, a school as if the deposit
11was made directly at a branch office of the
bank.
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