Amended in Assembly May 1, 2013

Amended in Assembly April 16, 2013

Amended in Assembly April 1, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 1162

Introduced by Assembly Member Frazier

February 22, 2013

An act to add Section 69505.6 to the Education Code, relating to student financial aid.

LEGISLATIVE COUNSEL’S DIGEST

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 begin insert to be used end insert 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 card, prepaid card, or preloaded begin delete card. The bill would require the policies to end delete begin insert card that end insert best begin delete serve end delete begin insert serves end insert the needs of the begin delete students, and end delete begin insert students. The bill end insert would encourage begin delete the policies end delete begin insert end insert begin insert postsecondary educational institutions end insert to begin delete include end delete begin insert consider end insert specified begin delete requirements end delete begin insert issues in adopting their policies end insert .

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 69505.6 is added to the Education Code,
to read:

69505.6.  

The Board of Governors of the California Community
Colleges and the Trustees of the California State University shall,
and the Regents of the University of California and the governing
bodies of accredited private nonprofit and for-profit postsecondary
educational institutions are requested to, adopt policies begin insert to be used end insert
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 card,
prepaid card, or preloaded begin delete card. The policies shall end delete begin insert card that end insert best
begin delete serve end delete begin insert serves end insert the needs of the begin delete students, and end delete begin insert students. Postsecondary
educational institutions end insert are encouraged to begin delete include end delete begin insert consider end insert all of
the following begin delete requirements end delete begin insert in adopting their policies end insert :

(a)  begin delete Provide end delete begin insert Whether to provide end insert students a clear and unbiased
choice of where to bank by ensuring that students can elect to
receive their financial aid award and other refunds through their
own bank account or on a check and that students not be subjected
to paperwork that attempts to direct them to banking options
favored by the bank or financial institution with which the
institution is partnering.

(b)  begin delete Require end delete begin insert Whether to require end insert at least one fee-free regularly
replenished automated teller machine to be placed on a
participating campus or satellite campus, and additional fee-free
regularly replenished automated teller machines placed on
campuses in high enough concentration to avoid students having
to use multiple automated teller machines, with which a student
may use his or her debit card, prepaid card, or preloaded card to
access his or her financial aid award and other refunds.

(c)  begin delete Prohibit end delete begin insert Whether to prohibit end insert debit card, prepaid card, or
preloaded card use from imposing fees common to students,
including, but not limited to:

(1) Insufficient fund fees at automated teller machines or point
of sale.

(2) Account balance inquiry fees.

(3) PIN-based transaction fees.

(4) Inactive account fees.

(5) Replacement card fees.

(6) Transfer or wire fees.

(7) Dispute fees.

(8) Account closure fees.

(d)  begin delete Require end delete begin insert Whether to require end insert all debit card, prepaid card, or
preloaded card fees to be prominently displayed on the partnering
bank or financial institution’s Internet Web site or information
mailed to students.

(e)  begin delete Prohibit end delete begin insert Whether to prohibit end insert the debit cards, prepaid cards,
or preloaded cards from being cobranded, which means including
the logo of the postsecondary educational institution.

(f)  begin delete Require end delete begin insert Whether to require end insert the debit cards, prepaid cards,
or preloaded cards and their contracts to include the same level of
consumer protections that are provided to automated teller machine
customers under the federal Electronic Fund Transfer Act (15
U.S.C. Sec. 1601 et seq.) as its exists on January 1, 2014.

(g)  begin delete Prohibit end delete begin insert Whether to prohibit end insert debit card, prepaid card, or
preloaded card contracts from including mandatory arbitration
clauses.