Bill Text: CA AB1927 | 2013-2014 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: Student financial aid: debit cards.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Vetoed) 2014-09-29 - Vetoed by Governor. [AB1927 Detail]

Download: California-2013-AB1927-Amended.html

---

BILL NUMBER: AB 1927	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 4, 2014
	AMENDED IN ASSEMBLY  MAY 5, 2014
	AMENDED IN ASSEMBLY  APRIL 10, 2014

INTRODUCED BY   Assembly Member Frazier

                        FEBRUARY 19, 2014

   An act to add Section 69505.7 to the Education Code, relating to
student financial aid.


	LEGISLATIVE COUNSEL'S DIGEST


   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 sale or sharing of personal information, as defined,
that the student or the postsecondary educational institution
provides the bank or other financial  institution; 
 institution, except as specified;  prohibit the bank or
other financial institution from imposing a point-of-sale transaction
fee on a student for the use of the debit card, prepaid card, or
preloaded card; provide a clear and conspicuous disclosure to
students of all fees associated with the debit card, prepaid card, or
preloaded card; ensure that a student does not incur any cost in
opening the account or initially receiving the card; 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 credit 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.
   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 69505.7 is added to the Education Code, to
read:
   69505.7.  (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.
   (b) The policies adopted pursuant to subdivision (a) shall,
consistent with federal law, including Section 668.164 of Title 34 of
the Code of Federal Regulations, 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) Prohibit revenue sharing between a postsecondary educational
institution and banks or other financial institutions.
   (2) Prohibit the sale or sharing of personal information, as
defined in paragraph (1) of subdivision (d) of Section 1798.81.5 of
the Civil Code, that the student or the postsecondary educational
institution provides the bank or other financial 
institution.   institution, unless it is necessary for
the purpose of providing services related to the opening or
maintenance of a debit card, prepaid card, or preloaded card account.

   (3) Prohibit the bank or other financial institution from imposing
a point-of-sale transaction fee on a student for the use of the
debit card, prepaid card, or preloaded card.
   (4) Provide a clear and conspicuous disclosure to students of all
fees associated with the debit card, prepaid card, or preloaded card.

   (5) If the debit card, prepaid card, or preloaded card is
cobranded, provide a clear and conspicuous disclosure to students
that the card is not endorsed by the postsecondary educational
institution.
   (6) Ensure that the student does not incur any cost in opening the
account or initially receiving the debit card, prepaid card, or
preloaded card.
   (7) (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.
   (8) Ensure that the debit card, prepaid card, or preloaded card
can be widely used.
   (9) 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.
   (10) 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. 
   (c) The policies adopted pursuant to subdivision (a) shall only
apply to negotiating contracts between a bank or other financial
institution and a postsecondary educational institution for purposes
of disbursing a student's financial aid award and other refunds onto
a debit card, prepaid card, or preloaded card.  
   (d) For purposes of this section, a "bank or other financial
institution" includes, but is not limited to, a depository
institution or an entity that partners with one or more depository
institutions.