AB 1927, as introduced, 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 to be used 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 card that best serves the needs of the students. The bill would require the policies adopted to ensure that contracts between postsecondary educational institutions and banks or other financials institutions to disburse a student’s financial aid award to do certain things, including, among other things, prohibit the sale of private information that the student or the postsecondary educational institution provides the bank or other financial institution, prohibit the debit card, prepaid card, or preloaded card use from imposing fees; prohibit the card from being cobranded; ensure that a student does not incur any cost in opening the account or initially receiving the card; and not market or portray the account or card as a credit card or credit instrument, or subsequently convert the card to a credit card or credit instrument.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 69505.7 is added to the Education Code,
2to read:
(a) The Board of Governors of the California
4Community Colleges and the Trustees of the California State
5University shall, and the Regents of the University of California
6and the governing bodies of accredited private nonprofit and
7for-profit postsecondary educational institutions are requested to,
8adopt policies to be used for negotiating contracts between their
9postsecondary educational institutions and banks and other
10financial institutions to disburse a student’s financial aid award
11and other refunds onto a debit card, prepaid card, or preloaded
12card that best serves the needs of the students.
13(b) The policies adopted pursuant to subdivision (a) shall,
14consistent with federal law, ensure that contracts between
15postsecondary educational
institutions and banks or other financial
16institutions to disburse a student’s financial aid award and other
17refunds onto a debit card, prepaid card, or preloaded card do at
18least all of the following:
19(1) Prohibit revenue sharing between a postsecondary
20educational institution and banks or other financial institutions.
21(2) Prohibit the sale of private information that the student or
22the postsecondary educational institution provides the bank or
23other financial institution.
24(3) Prohibit the debit card, prepaid card, or preloaded card use
25from imposing fees.
26(4) Prohibit the debit card, prepaid card, or
preloaded card from
27being cobranded, which means including the logo of the
28postsecondary educational institution.
29(5) Ensure that the student does not incur any cost in opening
30the account or initially receiving the debit card, prepaid card, or
31preloaded card.
P3 1(6) (A) Ensure that the student has convenient access to a branch
2office of the bank or an automated teller machine of the bank in
3which the account was opened or of another bank, so that the
4student does not incur any cost in making withdrawals from that
5office or those automated teller machines.
6(B) The branch office or automated teller machines must be
7located on the postsecondary educational institution’s campus, in
8an institutionally owned or operated facility, or immediately
9adjacent to and accessible from the campus.
10(7) Ensure that the debit card, prepaid card, or preloaded card
11can be widely used.
12(8) Not market or portray the account or debit card, prepaid
13card, or preloaded card as a credit card or credit instrument, or
14subsequently convert the account or debit card, prepaid card, or
15preloaded card to a credit card or credit instrument.
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