AB 2252, as introduced, John A. Pérez. Child support payments: electronic fund transfer: qualifying accounts.
Existing law obligates a parent to support his or her child. Existing law establishes the Department of Child Support Services within the California Health and Human Services Agency, which administers all services and performs all functions necessary to establish, collect, and distribute child support. Existing federal law, in connection with child support enforcement agencies, requires the state to implement a state disbursement unit for the collection and disbursement of payments under support orders, including electronic processes for receipt of payments from parents, employers, and other states, and for electronic disbursements to custodial parents and other obligees. Existing state law establishes within the Department of Child Support Services the State Disbursement Unit and the California Child Support Automation System. Existing law requires the California Child Support Automation System, which includes the State Disbursement Unit, to provide timely and accurate payment processing and centralized payment disbursement from a single location in the state.
This bill would, if child support payments are directly deposited to an account of the recipient’s choice, require that the payments only be deposited to a qualifying account, as defined. The bill would prohibit a person or entity that issues a prepaid card or maintains or manages a prepaid card account from accepting or facilitating the direct deposit of child support payments to a prepaid card account that does not meet the requirements of a qualified account. The bill would prohibit the Department of Child Support Services from being held liable for authorizing a direct deposit of child support payments into a prepaid card account designated by the recipient that does not meet the requirements of a qualified account.
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 17325 is added to the Family Code, to
2read:
(a) (1) Notwithstanding any other law, if child support
4payments are directly deposited to an account of the recipient’s
5choice, as authorized under the federal Electronic Fund Transfer
6Act (EFTA) (15 U.S.C. Sec. 1693 et seq.), the payments may only
7be deposited to an account that meets the requirements of a
8qualifying account, as defined in paragraph (2), for deposit of child
9support payments.
10(2) For purposes of this section, a “qualifying account” is one
11of the following:
12(A) A demand deposit or savings account at an insured financial
13institution in the name of the person entitled to the receipt of child
14support payments.
15(B) A prepaid card account that meets all of the following:
16(i) The account is held at an insured financial institution.
17(ii) The account is set up to meet the requirements for
18passthrough deposit or share insurance so that the funds accessible
19through the account are eligible for insurance for the benefit of
20the person entitled to the receipt of child support payments by the
21Federal Deposit Insurance Corporation in accordance with Part
22330 of Title 12 of the Code of Federal Regulations, or the National
23Credit Union Share Insurance Fund in accordance with Part 745
24of Title 12 of the Code of Federal Regulations.
25(iii) The account is not attached to any credit or overdraft feature
26that is automatically repaid from the account after delivery of the
27
payment.
P3 1(iv) The issuer of the card complies with all of the requirements,
2and provides the holder of the card with all of the consumer
3protections, that apply to a payroll card account under the rules
4implementing the EFTA or other rules subsequently adopted under
5the EFTA that apply to prepaid card accounts.
6(3) A person or entity that issues a prepaid card or maintains or
7manages a prepaid card account that does not comply with
8paragraph (2) shall not accept or facilitate the direct deposit of
9child support payments to the prepaid card account.
10(b) For purposes of this section, the department shall not be held
11liable for authorizing a direct deposit of child support payments
12into a prepaid card account designated by the recipient that does
13not comply with paragraph (2) of subdivision (a).
14(c) For the purposes of this section, the following definitions
15shall apply:
16(1) “Financial institution” means a state or national bank, a state
17or federal savings and loan association, a mutual savings bank, or
18a state or federal credit union.
19(2) “Issuer” means a person or entity that issues a prepaid card.
20(3) “Payroll card account” shall have the same meaning as that
21term is defined in the regulations implementing the EFTA.
22(4) “Prepaid card” or “prepaid card account” means either of
23the following:
24(A) A card, code, or other means of access to funds of a recipient
25that is usable at multiple, unaffiliated merchants for goods
or
26services, or usable at automated teller machines.
27(B) The same as those terms or related terms are defined in the
28regulations adopted under the EFTA regarding general use
29reloadable cards.
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