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 policies to ensure that contracts between postsecondary educational institutions and banks or other financial institutions to disburse a student’s financial aid award do certain things, including, among other things, prohibit the salebegin delete of private informationend deletebegin insert or sharing of personal information, as defined,end insert that the student or the postsecondary educational institution provides the bank or other financialbegin delete institution,end deletebegin insert institution;end insert prohibit the bank or other financial institution from imposing abegin insert point-of-sale
transactionend insert fee on a student for the use of the debit card, prepaid card, or preloadedbegin delete card, and require any fees imposed by the bank or other financial institution to be paid by the postsecondary educational institution;
prohibit the card from being cobranded;end deletebegin insert card; provide a clear and conspicuous disclosure to students of all fees associated with the debit card, prepaid card, or preloaded card;end insert ensure that a student does not incur any cost in opening the account or initially receiving the card;begin delete andend delete 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 creditbegin delete instrument.end deletebegin insert instrument; and require the postsecondary educational institution to disclose to students the benefits and student responsibilities for all financial aid disbursement options offered by the postsecondary educational
institution.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 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,begin insert including Section 668.164 of Title 34
15of the Code of Federal Regulations,end insert ensure that contracts between
16postsecondary educational institutions and banks or other financial
17institutions to disburse a student’s financial aid award and other
P3 1refunds onto a debit card, prepaid card, or preloaded card do at
2least all of the following:
3(1) Prohibit revenue sharing between a postsecondary
4educational institution and banks or other financial institutions.
5(2) Prohibit the salebegin delete of private informationend deletebegin insert
or sharing of
6personal information, as defined in paragraph (1) of subdivision
7(d) of Section 1798.81.5 of the Civil Code,end insert that the student or the
8postsecondary educational institution provides the bank or other
9financial institution.
10(3) Prohibit the bank or other financial institution from imposing
11begin delete feesend deletebegin insert a point-of-sale transaction feeend insert on a student for the use of the
12debit card, prepaid card, or preloaded card.begin delete Any fees imposed by
13the bank or other financial institution shall be paid by the
14postsecondary educational institution.end delete
15(4) Prohibit the debit card, prepaid card, or preloaded card from
16being cobranded, which means including the logo of the
17postsecondary educational institution.
18(4) Provide a clear and conspicuous disclosure to students of
19all fees associated with the debit card, prepaid card, or preloaded
20card.
21(5) If the debit card, prepaid card, or preloaded card is
22cobranded, provide a clear and conspicuous disclosure to students
23that the card is not endorsed by the postsecondary educational
24institution.
25(5)
end delete
26begin insert(6)end insert Ensure that the student does not incur any cost in opening
27the account or initially receiving
the debit card, prepaid card, or
28preloaded card.
29(6)
end delete
30begin insert(7)end insert (A) Ensure that the student has convenient access to a branch
31office of the bank or an automated teller machine of the bank in
32which the account was opened or of another bank, so that the
33student does not incur any cost in making withdrawals from that
34office or those automated teller machines.
35(B) The branch office or automated teller machines must be
36located on the postsecondary educational institution’s campus, in
37an institutionally owned or operated
facility, or immediately
38adjacent to and accessible from the campus.
39(7)
end delete
P4 1begin insert(8)end insert Ensure that the debit card, prepaid card, or preloaded card
2can be widely used.
3(8)
end delete
4begin insert(9)end insert Not market or portray the account or debit card, prepaid
5card, or preloaded card as a credit card or credit instrument, or
6subsequently
convert the account or debit card, prepaid card, or
7preloaded card to a credit card or credit instrument.
8(10) Require the postsecondary educational institution to
9disclose to students the benefits and student responsibilities for
10all financial aid disbursement options offered by the postsecondary
11educational institution.
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