BILL ANALYSIS Ó
AB 1784
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Date of Hearing: April 6, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
1784 (Dababneh) - As Amended March 3, 2016
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|Policy | Banking and Finance |Vote:| 12 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill allows state chartered banks to participate in
school-based savings programs. Specifically, this bill:
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1)Permits banks to participate in a financial education program
that involves receiving deposits or paying withdrawals on the
premises of, or at a facility used by, a school.
2)Specifies that the school premises or facility will not be
considered a bank branch office if:
a) The bank does not establish and operate the school
premises or facility in which the financial education
program is conducted;
b) Bank employees work at the site only to participate in
the program;
c) The program is provided at the discretion of the school;
d) The principal purpose of the program is financial
education; and,
e) No services are provided to the general public.
FISCAL EFFECT:
Negligible state costs.
COMMENTS:
1)Purpose. According to the author, AB 1784 will help students
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learn about personal finance by increasing the number of banks
that can participate in school-based savings programs. The
author notes that these programs can teach students about
basic financial concepts, such as depositing and withdrawing
money while obtaining real-world work experience.
2)Background. Existing law allows national banks and state
savings associations to operate school-based savings programs.
These programs are a collaborative effort between banks and
elementary, middle, and high school administrator and
teachers. They are often structured as in-school credit union
or bank programs that offer students basic savings accounts.
They range from "mini banks" that offer student savings
accounts to more complex programs that offer career-oriented
banker training. Existing law limits state-chartered banks
from participating in these programs because a branch license
is required at each participating school.
3)Benefit to the Banks. According to the US Department of the
Treasury, school-based savings programs are beneficial to
banks as well as students. In some cases, participating
financial institutions may receive positive Community
Reinvestment Act (CRA) consideration for providing community
development service. Moreover, banks may participate in these
programs to identify potential bank employees and to elevate
visibility in the community.
Analysis Prepared by:Luke Reidenbach / APPR. / (916)
319-2081
AB 1784
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