BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
2457 (Salas)
Hearing Date: 08/02/2010 Amended: 07/15/2010
Consultant: Maureen Ortiz Policy Vote: BF&I: 8-2
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BILL SUMMARY: AB 2457 establishes the California Financial
Literacy Fund for deposit of private donations that will be used
to support partnerships with the financial services community
and governmental and nongovernmental stakeholders.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Admin expenses
-------------minor----------- General
Financial literacy activities --------unknown,
dependent on
donations-------- Private
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STAFF COMMENTS:
AB 2457 does not describe the type of financial literacy program
the State Controller's Office will implement, so it is difficult
to determine the costs to administer that program. The scope of
any activities will depend on how much revenue is contributed.
AB 2457 establishes the California Financial Literacy Fund to be
administered by the Controller, and authorizes the receipt of
private donations. The money will be available upon
appropriation by the Legislature and may be used to support
partnerships with the financial services community and
governmental and nongovernmental stakeholders to improve
Californians' financial literacy.
The bill provides that private donors must not have any direct
financial interest in any financial product.
The Controller will be required to provide a brief annual
summary to the Legislature beginning August 30, 2012 on the use
of the funds.
There are numerous efforts around the state aimed at improving
the financial literacy of California residents including the
following:
1)In January 2008, the Governor announced the formation of the
Bank on California program, run through the Office of Planning
and Research. That effort encourages the unbanked to open
starter accounts at local banks and credit unions.
2)The California State Library, as well as other public
libraries, works regularly with financial advisors and banks
to help provide financial literacy resources to patrons.
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AB 2457 (Salas)
3)Citigroup has made a ten-year $200 million commitment to fund
financial education programs.
4)The California Bankers Association has created a Financial
Empowerment Program to provide financial education tools for
adults with an emphasis on basic personal finances and
household money management skills.
Staff notes that CalSTRS raises a concern that a conflict of
interest could result if the Controller, as a member of the
Teachers' Retirement Board, voted in support of an investment
firm that may have previously donated to the Financial Literacy
Fund unless the Controller recuses himself or herself under
those circumstances.
This bill is similar to AB 2123 (Lieu) which was vetoed by the
Governor in 2008 who stated, in part, that the bill duplicated
existing services and resources and that its intended efforts
could be done administratively.