BILL ANALYSIS
AB 2457
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CONCURRENCE IN SENATE AMENDMENTS
AB 2457 (Salas)
As Amended July 15, 2010
Majority vote
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|ASSEMBLY: |71-3 |(June 2, 2010) |SENATE: |25-5 |(August 20, |
| | | | | |2010) |
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Original Committee Reference: B. & F.
SUMMARY : Establishes the California Financial Literacy Fund in
the State Treasury. Specifically, this bill :
1)Requires the California Financial Literacy Fund to be
administered by the State Controller (Controller).
2)Authorizes the Controller to deposit private donations into
the California Financial Literacy Fund from entities with no
direct financial interest in any financial products.
3)Requires private donations to be made available upon
appropriation in the annual Budget Act.
4)Requires the Controller, beginning in 2012 to provide an
annual summary to the chairpersons of the Assembly Committee
on Banking and Finance and the Senate Committee on Banking,
Finance and Insurance on the use of the funds, when
appropriated. This report shall be submitted no later than
August 30 each year.
5)Enables partnerships with the financial services community and
governmental and nongovernmental stakeholders to improve
Californian's financial literacy.
The Senate amendments make technical non-substantive changes.
EXISTING LAW does not have an official statewide policy or
educational plan for the teaching of financial literacy.
AS PASSED BY THE ASSEMBLY , this bill was substantially similar
to the bill passed by the Senate.
FISCAL EFFECT : According to Assembly Appropriations Committee,
AB 2457
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minor costs to the Controller.
COMMENTS : Currently, California does not have a one-stop shop
system for collecting and administering financial literacy funds
and implementing programs. A number of financial institutions
and non-profit organizations conduct their own events and
workshops to promote financial literacy. AB 2457 would provide
an outlet for the Controller to deposit private donations into
the financial literacy fund from entities with no direct
financial interest in any financial products. Through the
financial literacy fund, the Controller would have the ability
to promote financial literacy events, create and distribute
financial literacy documents and make the public aware of more
serious issues related to scams. The bill contains a reporting
requirement allowing the Legislature to receive necessary
information into how the funds are used and appropriated on a
yearly basis.
According to the author, "Financial illiteracy and the
consequences of uninformed financial decisions are a growing
problem in California. A 2008 financial literacy survey
revealed that only 59% of young adults, ages 18-29, pay their
bills on time every month. Providing Californians more
financial literacy tools is an important part of the solution.
The creation of a financial literacy fund would provide a
central funding source for organizations who with to partner
with California on financial literacy efforts. In the long run,
educating Californians would result in benefits to the economy
by helping to prevent bankruptcies, foreclosures, and job loss."
According to the sponsor, the Controller, "This bill would
express the state's financial interest in reducing unmanageable
credit card debt, bankruptcy, and predatory lending misfortunes
like those that contributed to the current economic meltdown.
Importantly, this bill will ensure that the Legislature is
notified of all sources and uses of the donated funds, allowing
you and the other members to make more timely and informed
decisions on financial literacy issues."
Analysis Prepared by : Mark Farouk / B. & F. / (916) 319-3081
FN: 0005532