BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 595
                                                                  Page  1

          Date of Hearing:   August 14, 2013

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                   SB 595 (Calderon) - As Amended:  April 22, 2013 

          Policy Committee:                              Higher  
          EducationVote:12-0

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              Yes

           SUMMARY  

          This bill places conditions on the deposit of postsecondary  
          education students' financial aid awards. Specifically, this  
          bill:

          1)Prohibits California Community Colleges (CCC) and California  
            State University (CSU) campuses, as of January 1, 2014, from  
            contracting with any depository institution that requires a  
            student to open an account with that entity as a condition of  
            receiving his or her financial aid disbursement.

          2)Requires each CCC and CSU campus to:

             a)   Offer a student the option of receiving his or her  
               financial aid disbursement via direct deposit into a  
               financial institution of the student's choosing.

             b)   Ensure its contracts for financial aid disbursement,  
               entered into after January 1, 2014, require the contracting  
               entity to initiated the direct deposit within one business  
               day of receiving financial aid disbursement moneys from the  
               campus.

          3)Requests the University of California (UC) to comply with all  
            of the above.

           FISCAL EFFECT  

          Negligible fiscal impact, as the segments all indicate their  
          campuses are currently in compliance with the bill's  
          requirements.








                                                                  SB 595
                                                                  Page  2


           COMMENTS  

           Purpose  . According to the author, banks and other financial  
          firms are creating partnerships with colleges and universities  
          to control the process of student aid disbursements.  The author  
          notes that the functionality of these partnerships allows  
          students to access their funds in a suitable time frame. The  
          author argues, however, that in some of these partnerships,  
          students are required to open an account with the bank or  
          financial firm in order to receive their financial aid funds. SB  
          595 prohibits the campus from entering into a contract with an  
          entity that requires a student open an account with that entity,  
          and would require the student be offered the opportunity to  
          receive the disbursement via direct deposit within 24 hours  
          following the financial entity's receipt of funds from the  
          institution.
           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081