BILL ANALYSIS
AB 2188
Page 1
ASSEMBLY THIRD READING
AB 2188 (Bradford)
As Amended May 28, 2010
Majority vote
INSURANCE 9-2 APPROPRIATIONS 12-5
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|Ayes:|Solorio, Blakeslee, |Ayes:|Fuentes, Ammiano, |
| |Caballero, Carter, Feuer, | |Bradford, |
| |Hayashi, Niello, Salas, | |Charles Calderon, Coto, |
| |Torres | |Davis, Monning, Ruskin, |
| | | |Skinner, Solorio, |
| | | |Torlakson, Torrico |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Anderson, Hagman |Nays:|Conway, Harkey, Miller, |
| | | |Nielsen, Norby |
| | | | |
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SUMMARY : Establishes criteria for any contract between the
Employment Development Department (EDD) and a vendor for the
electronic payment of state disability insurance (SDI) benefits.
Specifically, this bill :
1)Requires that any contract between the EDD and a vendor for
the electronic payment of SDI benefits shall include the
following criteria:
a) Provide claimants with a process to resolve disputes in
a timely manner;
b) Require that claimants have free and unlimited access to
customer service that meets or exceeds the services
provided by EDD prior to the implementation of electronic
payment of benefits;
c) Prohibit the assessment of fees to claimants to access
the electronic payment of benefits in connection with a
transaction with a teller at a financial institution, a
point of sale transaction where an electronic benefit card
is utilized to purchase goods or services, and a
transaction at any automatic teller machine in the vendor's
financial network;
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d) Allow for inquiries on account balances from automatic
teller machines;
e) Charge no fees wherever the vendor can exercise that
option;
f) Require the vendor to meet or exceed federal and state
laws for financial privacy and language access;
g) Meet the standards for use of personal service contracts
required by existing state law;
h) Create a procedure to prevent overdraft fees; and,
i) Prohibit the deduction of any fees, charges, or debt
from future SDI benefits.
2)Eliminates the requirement that SDI benefits be paid by check.
EXISTING LAW :
1)Requires claims for UI and SDI benefits to be made in
accordance with regulations adopted by the Director of EDD.
2)Requires EDD to promptly pay SDI benefits if it finds the
claimant is eligible or deny benefits if it finds the claimant
is ineligible.
3)Requires the payment of SDI benefits to be paid by checks
drawn on a disability benefit payment account from a bank or
public depository selected by the director of EDD, with the
approval of the Department of Finance.
FISCAL EFFECT : An unknown federal cost pressure to EDD to
modify a process already underway to convert to electronic
payment.
COMMENTS :
1)The purpose of this bill is to provide guidelines to EDD on
the implementation of direct deposit and the use of paycards
AB 2188
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for SDI benefits.
2)According to the author, the US Department of Labor (DOL)
established guidelines on August 21, 2009 on the issuance of
paycards and authorizing direct deposit for unemployment
compensation benefits. The DOL recommends states, when
considering contracts for direct deposit and paycard services
from vendors, to negotiate for fee schedules that are more
favorable to individuals, such as more than one free ATM
withdrawal for paycards, fee-free point-of-sale transactions,
and unlimited balance inquiries at in-network ATMs. This bill
establishes these and additional requirements to be included
in a contract negotiated by EDD for paycards and direct
deposits.
3)Electronic pay cards can benefit "unbanked" individuals who do
not have access to a bank account and resort to payday lenders
and check cashers that charge exorbitant fees.
The author and the California Labor Federation state that this
bill would establish protections for payment of SDI benefits
by direct deposit and electronic pay card that prevent hidden
fees, guarantee access to benefits and provide adequate
customer service in appropriate languages.
4)AB 2538 (Niello) of this Session proposes to authorize EDD to
serve notice in connection with tax liens to an "address" for
a bank or savings and loan association by magnetic media,
electronic transmission. "Address" is defined by the bill to
include telephone or modem number, fax machine, or any other
reference number designated to receive data by electronic
means. AB 2538 has been approved by the Assembly
Appropriations Committee and is recommended for Consent on the
Assembly Floor.
Analysis Prepared by : Manny Hernandez / INS. / (916) 319-2086
FN: 0004738