AB 1162, as amended, Frazier. Student financial aid: debit cards.
Existing law provides for the missions and functions of the private and public segments of postsecondary education in the state. Existing law establishes various student financial aid programs for students attending all segments of postsecondary education.
This bill would require the Board of Governors of the California Community Colleges and the Trustees of the California State University, and request the Regents of the University of California and the governing bodies of accredited private nonprofit and for-profit postsecondary educational institutions, to adopt policies for negotiating contracts between their postsecondary educational institutions and banks and other financial institutions to disburse a student’s financial aid award and other refunds onto a debit cardbegin insert, prepaid card, or preloaded cardend insert. The bill would require the policies to best serve the needs of the students, and would encourage the policies to include specified requirements.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 69505.6 is added to the Education Code,
2to read:
The Board of Governors of the California Community
4Colleges and the Trustees of the California State University shall,
5and the Regents of the University of California and the governing
6bodies of accredited private nonprofit and for-profit postsecondary
7educational institutions are requested to, adopt policies for
8negotiating contracts between their postsecondary educational
9institutions and banks and other financial institutions to disburse
10a student’s financial aid award and other refunds onto a debit cardbegin insert,
11prepaid card, or preloaded cardend insert. The policies shall best serve the
12needs of the students, and are encouraged to include all of the
13following
requirements:
14(a) Provide students a clear and unbiased choice of where to
15bank by ensuring that students can elect to receive their financial
16aid award and other refunds through their own bank account or on
17a check and that students not be subjected to paperwork that
18attempts to direct them to banking options favored by the bank or
19financial institution with which the institution is partnering.
20(b) Requirebegin delete an adequate number ofend deletebegin insert at least end insertbegin insertoneend insertbegin insert fee-freeend insert
regularly
21replenished automated tellerbegin delete machinesend deletebegin insert machineend insert to be placed on a
22participating campus begin insertor satellite campus, and an additional
23regularly replenished automated teller machine for every 3,000
24students enrolled, end insertwith which a student may use his or her debit
25cardbegin insert, prepaid card, or preloaded cardend insert to access his or her financial
26aid award and other refunds.
27(c) Prohibitbegin delete theend delete debitbegin delete cardsend deletebegin insert
cardend insertbegin insert, prepaid card, or preloaded
28card useend insert from imposingbegin delete the followingend delete feesbegin delete onend deletebegin insert common toend insert studentsbegin insert,
29including, but not limited toend insert:
30(1) Insufficient fund fees at automated teller machines or point
31of sale.
32(2) Account balance inquiry fees.
33(3) PIN-based transaction fees.
34(4) Inactive account fees.
35(5) Replacement card fees.
36(6) Transfer or wire fees.
37(7) Dispute fees.
38(8) Account closure fees.
P3 1(d) Require all debit cardbegin insert, prepaid card, or preloaded cardend insert fees
2to be prominently displayed on the partnering bank or financial
3institution’s Internet Web site or information mailed to students.
4(e) Prohibit the debit cardsbegin insert,
prepaid cards, or preloaded cardsend insert
5 from being cobranded, which means including the logo of the
6postsecondary educational institution.
7(f) Require the debit cardsbegin insert, prepaid cards, or preloaded cards
8and their contractsend insert to include the same level of consumer
9protections that are provided to automated teller machine customers
10under the federal Electronic Fund Transfer Act (15 U.S.C. Sec.
111601 et seq.)begin insert as its exists on January 1, 2014end insert.
12(g) Prohibit debit cardbegin insert, prepaid card, or preloaded cardend insert
13
contracts from including mandatory arbitration clauses.
O
98