Bill Text: CA AB1162 | 2013-2014 | Regular Session | Amended
Bill Title: Student financial aid: debit cards.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2013-07-03 - In committee: Set first hearing. Failed passage. Reconsideration granted. [AB1162 Detail]
Download: California-2013-AB1162-Amended.html
BILL NUMBER: AB 1162 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 20, 2013
AMENDED IN ASSEMBLY MAY 1, 2013
AMENDED IN ASSEMBLY APRIL 16, 2013
AMENDED IN ASSEMBLY APRIL 1, 2013
INTRODUCED BY Assembly Member Frazier
FEBRUARY 22, 2013
An act to add Section 69505.6 to the Education Code, relating to
student financial aid.
LEGISLATIVE COUNSEL'S DIGEST
AB 1162, 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 encourage postsecondary
educational institutions to consider specified issues in adopting
their policies. The bill would require the policies adopted to
ensure that contracts between postsecondary educational institutions
and banks or other financials institutions to disburse a student's
financial aid award do certain things, including: ensure that a
student does not incur any cost in opening the account or initially
receiving the debit card, prepaid card, or preloaded card; ensure
that a student has convenient access to a branch office of the bank
or an automated teller machine, as specified; ensure that the debit
card, prepaid card, and preloaded card can be widely used; and to not
market or portray the account or debit card, prepaid card, or
preloaded card as a credit card or credit instrument, or to
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 1. Section 69505.6 is added to the Education Code, to
read:
69505.6. (a) The Board of Governors of the
California Community Colleges and the Trustees of the California
State University shall, and the Regents of the University of
California and the governing bodies of accredited private nonprofit
and for-profit postsecondary educational institutions are requested
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. Postsecondary
(b) Postsecondary educational
institutions are encouraged to consider all of the following in
adopting their policies:
(a)
(1) Whether to provide students a clear and unbiased
choice of where to bank by ensuring that students can elect to
receive their financial aid award awards
and other refunds through their own bank account
accounts or on a check
checks and that students not be subjected to paperwork that
attempts to direct them to banking options favored by the bank or
financial institution with which the institution is partnering.
(b)
( 2) Whether to require at least one
fee-free regularly replenished automated teller machine to be placed
on a participating campus or satellite campus, and additional
fee-free regularly replenished automated teller machines placed on
campuses in high enough concentration to avoid students having to use
multiple automated teller machines, with at
which a student may use his or her debit card, prepaid card, or
preloaded card to access his or her financial aid award and other
refunds.
(c)
(3) Whether to prohibit debit card, prepaid card, or
preloaded card use from imposing fees common to students, including,
but not limited to:
(1)
(A) Insufficient fund fees at automated teller machines
or point points of sale.
(2)
(B) Account balance inquiry fees.
(3)
(C) PIN-based transaction fees.
(4)
(D) Inactive account fees.
(5)
(E) Replacement card fees.
(6)
(F) Transfer or wire fees.
(7)
(G) Dispute fees.
(8)
(H) Account closure fees.
(d)
(4) Whether to require all debit card, prepaid card, or
preloaded card fees to be prominently displayed on the partnering
bank or financial institution's Internet Web site or information
mailed to students.
(e)
(5) Whether to prohibit the debit cards, prepaid cards,
or preloaded cards from being cobranded, which means including the
logo of the postsecondary educational institution.
(f)
(6) Whether to require the debit cards, prepaid cards,
or preloaded cards and their contracts to include the same level of
consumer protections that are provided to automated teller machine
customers under the federal Electronic Fund Transfer Act (15 U.S.C.
Sec. 1601 et seq.) as its exists on January 1, 2014.
(g)
(7) Whether to prohibit debit card, prepaid card, or
preloaded card contracts from including mandatory arbitration
clauses.
(c) The policies adopted pursuant to subdivision (a) shall,
consistent with federal law, ensure that contracts between
postsecondary educational institutions and banks or other financial
institutions to disburse a student's financial aid award and other
refunds onto a debit card, prepaid card, or preloaded card do at
least all of the following:
(1) Ensure that the student does not incur any cost in opening the
account or initially receiving the debit card, prepaid card, or
preloaded card.
(2) (A) Ensure that the student has convenient access to a branch
office of the bank or an automated teller machine of the bank in
which the account was opened or of another bank, so that the student
does not incur any cost in making withdrawals from that office or
those automated teller machines.
(B) The branch office or automated teller machines must be located
on the postsecondary educational institution's campus, in an
institutionally owned or operated facility, or immediately adjacent
to and accessible from the campus.
(3) Ensure that the debit card, prepaid card, or preloaded card
can be widely used.
(4) Not market or portray the account or debit card, prepaid card,
or preloaded card as a credit card or credit instrument, or
subsequently convert the account or debit card, prepaid card, or
preloaded card to a credit card or credit instrument.
