BILL ANALYSIS Ó
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THIRD READING
Bill No: AB 2252
Author: John A. Pérez (D)
Amended: 6/16/14 in Senate
Vote: 21
SENATE JUDICIARY COMMITTEE : 6-0, 6/10/14
AYES: Jackson, Anderson, Lara, Leno, Monning, Vidak
NO VOTE RECORDED: Corbett
ASSEMBLY FLOOR : 75-0, 4/24/14 (Consent) - See last page for
vote
SUBJECT : Child support payments: electronic fund transfer
SOURCE : Author
DIGEST : This bill requires that child support payments
directly deposited into an account of the recipient's choice,
only be deposited into a qualifying account, as defined; and
provides that a qualifying account that is also a prepaid card
account must meet specified criteria, including that the account
is held at an insured financial institution, and that the
account is not attached to any credit or overdraft feature that
is automatically repaid from the account after delivery of the
payment.
ANALYSIS : Existing federal law, the Electronic Funds Transfer
Act (EFTA), provides a basic framework establishing the rights,
liabilities, and responsibilities of participants in electronic
fund and remittance transfer systems.
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Existing state law:
1.Provides that parents have an equal responsibility to support
a minor child.
2.Requires each county to maintain a local child support agency
responsible for establishing, modifying, and enforcing child
support obligations.
3.Establishes the California Child Support Automation System to
provide timely and accurate payment processing and centralized
disbursement from a single location in the state.
This bill:
1.Requires that child support payments deposited directly into
an account of the recipient's choice, only be deposited into a
"qualifying account."
2.Defines a qualifying account as (a) a demand deposit or
savings account at an insured financial institution in the
name of the person entitled to the receipt of child support
payments, or (b) a specific prepaid card account that meets
defined criteria.
3.Prohibits entities that issue prepaid cards or maintain
prepaid card accounts, which do not comply with the qualifying
provisions above, from accepting or facilitating the direct
deposits of child support payments.
4.Defines the following terms:
A. "Financial institution" means a state or national bank,
a state or federal savings and loan association, a mutual
savings bank, or a state or federal credit union;
B. "Issuer" means a person or entity that issues a prepaid
card;
C. "Payroll card account" shall have the same meaning as
that term is defined in the regulations implementing the
EFTA; and
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D. "Prepaid card" or "prepaid card account" means either of
the following:
A card, code, or other means of access to funds of a
recipient that is usable at multiple, unaffiliated
merchants for goods or services, or usable at automated
teller machines; or
The same as those terms or related terms are defined
in the regulations adopted under the EFTA regarding
general use reloadable cards.
Background
Existing law provides that a child's parents share equal
responsibility to support the child in a manner suitable to the
child's circumstances. (Family Code Section 3900.) Child
support is generally awarded when parents do not live together
with the child, and the amount is based on a number of factors,
including the time a child spends with each parent and each
parent's earnings. Child support can either be determined by
agreement of the parents or by court order. In California, the
child support program is administered by the Department of Child
Support Services, and carried out at the county level.
Recipients of child support may receive payments by check,
direct deposit into a bank account, or by the state's Electronic
Pay Card.
Last year, the Legislature authorized members of the CalWORKS
program to receive monthly payments by electronic funds transfer
only into qualifying accounts. That legislation responded to
fees and other penalties recipients had been charged for using
various electronic cards connected to their benefits by
extending important federal consumer protections such as deposit
insurance, safeguards from theft and unauthorized charges, and
prohibitions against overdraft fees and other credit-related
features.
Prior Legislation
AB 1280 (J. Perez, Chapter 557, Statutes of 2013) extended
federal consumer protection standards to state benefits
deposited into prepaid card accounts.
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AB 2035 (Bradford, Chapter 319, Statutes of 2012) protects
recipients of benefits through the electronic benefits transfer
(EBT) system from a loss of benefits through the practice of
skimming.
AB 1542 (Ducheny, Chapter 270, Statutes of 1997) implemented
federal welfare reform and conformed to federal law in
establishing the EBT system to deliver CalWORKS and CalFresh
(then Food Stamps) benefits.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
SUPPORT : (Verified 6/16/14)
AFSCME
National Consumer Law Center
Western Center on Law and Poverty
ARGUMENTS IN SUPPORT : According to the author, "AB 2252
applies federal consumer protections such as deposit insurance,
safeguards from theft and unauthorized charges, and prohibitions
against overdraft fees and other credit-related features to the
child support payments delivered on electronic payment cards.
In doing so, AB 2252 will ensure children and families that rely
on these payments are not the victims of fraudulent practices."
ASSEMBLY FLOOR : 75-0, 4/24/14
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,
Gorell, Grove, Hagman, Hall, Roger Hernández, Holden, Jones,
Jones-Sawyer, Levine, Linder, Logue, Lowenthal, Maienschein,
Medina, Melendez, Mullin, Muratsuchi, Nestande, Olsen, Pan,
Patterson, Perea, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon,
Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting, Wagner,
Waldron, Weber, Wieckowski, Wilk, Williams, Yamada, John A.
Pérez
NO VOTE RECORDED: Gray, Harkey, Mansoor, Nazarian, Vacancy
AL/JA:k 6/17/14 Senate Floor Analyses
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SUPPORT/OPPOSITION: SEE ABOVE
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