BILL NUMBER: SB 317	CHAPTERED  09/27/99

	CHAPTER   513
	FILED WITH SECRETARY OF STATE   SEPTEMBER 27, 1999
	APPROVED BY GOVERNOR   SEPTEMBER 27, 1999
	PASSED THE SENATE   AUGUST 31, 1999
	PASSED THE ASSEMBLY   AUGUST 26, 1999
	AMENDED IN ASSEMBLY   JULY 14, 1999
	AMENDED IN ASSEMBLY   JUNE 23, 1999
	AMENDED IN SENATE   APRIL 5, 1999

INTRODUCED BY   Senator Leslie
   (Principal coauthor:  Assembly Member Dutra)
   (Coauthors:  Assembly Members Bates, House, Robert Pacheco, and
Zettel)

                        FEBRUARY 8, 1999

   An act to add and repeal Section 205 of the Financial Code,
relating to banking.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 317, Leslie.  Financial institutions:  consumers:  Year 2000
Problem.
   Existing law provides for the regulation of various financial
institutions by the Department of Financial Institutions, including,
but not limited to, banks, savings and loan associations, credit
unions, and industrial loan companies.
   This bill would enact the "California Consumers Y2K Financial
Protection Act."  The bill would require financial institutions
regulated by the Department of Financial Institutions that have a
Year 2000 Problem, not to impose any fee, charge, or penalty on a
consumer as a result of the financial institution's Year 2000
Problem, and to reimburse a consumer for any fee, charge, or penalty
imposed by 3rd parties as a result of the problem, as specified.
This bill would require the department to enforce the provisions of
the bill.  This bill would not apply to those transactions that occur
prior to the disruption of financial or data transfer operations by
a Year 2000 Problem.  The bill's provisions would be repealed as of
January 1, 2002.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 205 is added to the Financial Code, to read:
   205.  (a) This section shall be known as and may be cited as the
"California Consumers Y2K Financial Protection Act."
   (b) For purposes of this section, the following definitions shall
apply:
   (1) "Consumer" means any natural individual.
   (2) "Financial institution" means any person or business that is
subject to regulation by the department.
   (3) "Year 2000 Problem" shall have the meaning specified in
subdivision (a) of Section 3269 of the Civil Code.
   (4) "Financial institution's Year 2000 Problem" means a Year 2000
Problem caused solely by the failure of a financial institution's
internal computer system, including, but not limited to, the
financial institution's proprietary software applications and other
internal computing applications.  A Year 2000 Problem is not a
"financial institution's Year 2000 Problem" if information technology
used by a consumer fails to properly exchange data with the
financial institution's internal computer system due to a Year 2000
Problem, unless the information technology used is supplied by or
supported by resources from the financial institution for the express
purpose of interacting with the financial institution's customers.
   (c) If a financial institution's Year 2000 Problem results in a
consumer being subject to any fee, charge, or penalty assessed by the
financial institution, the financial institution shall not impose
the fee, charge, or penalty.
   (d) If a financial institution's Year 2000 Problem directly
results in a consumer being charged any fee, charge, or penalty by a
third party due solely to the financial institution's Year 2000
Problem, the financial institution shall reimburse the consumer for
the fee, charge, or penalty upon the consumer providing the financial
institution with written evidence of the fee, charge, or penalty.
   (e) The department shall enforce the provisions of this section.
   (f) This section shall not apply to those transactions that occur
prior to the disruption of financial or data transfer operations by a
Year 2000 Problem.
   (g) A financial institution's liability under this section shall
be limited to the extent that the financial institution's Year 2000
Problem contributed to the fee, charge, or penalty.
   (h) This section is not intended to supersede any other state or
federal law or regulation in effect on January 1, 2000.  If a
financial institution's obligation to refrain from imposing, to
reimburse, or to resolve a dispute regarding, a fee, charge, or
penalty is already addressed by another law or regulation, then the
provisions of that law or regulation shall apply.  The purpose of
this section is to establish a safety net for consumers to the extent
that existing federal and state laws and regulations do not already
provide for the resolution of errors in assessing those fees,
charges, or penalties.
  (i) This section shall remain in effect only until January 1, 2002,
and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2002, deletes or extends that date.