AB 1927, 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 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 policiesbegin delete adoptedend delete to ensure that contracts between postsecondary educational institutions and banks or otherbegin delete financialsend deletebegin insert financialend insert institutions to disburse a student’s financial aid awardbegin delete toend delete 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 thebegin insert bank or other financial institution from imposing a fee on a student for the use of theend insert debit card, prepaid
card, or preloadedbegin delete card use from imposing fees;end deletebegin insert card, and require any fees imposed by the bank or other financial institution to be paid by the postsecondary educational institution;end insert
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 thebegin insert
bank or other financial institution from imposing
25fees on a student for the use of theend insert debit card, prepaid card, or
26preloadedbegin delete card use from imposing fees.end deletebegin insert card. Any fees imposed
P3 1by the bank or other financial institution shall be paid by the
2postsecondary educational institution.end insert
3(4) Prohibit the debit card, prepaid card, or preloaded card from
4being cobranded, which means including the logo of the
5postsecondary educational institution.
6(5) Ensure that the student does not incur any cost in opening
7the account or initially receiving the debit card, prepaid card, or
8preloaded
card.
9(6) (A) Ensure that the student has convenient access to a branch
10office of the bank or an automated teller machine of the bank in
11which the account was opened or of another bank, so that the
12student does not incur any cost in making withdrawals from that
13office or those automated teller machines.
14(B) The branch office or automated teller machines must be
15located on the postsecondary educational institution’s campus, in
16an institutionally owned or operated facility, or immediately
17adjacent to and accessible from the campus.
18(7) Ensure that the debit card, prepaid card, or preloaded card
19can be widely used.
20(8) Not market or portray
the account or debit card, prepaid
21card, or preloaded card as a credit card or credit instrument, or
22subsequently convert the account or debit card, prepaid card, or
23preloaded card to a credit card or credit instrument.
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