Bill Text: CA AB8 | 2021-2022 | Regular Session | Introduced


Bill Title: Unemployment benefits: direct deposit.

Spectrum: Partisan Bill (Republican 12-0)

Status: (Failed) 2022-02-01 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB8 Detail]

Download: California-2021-AB8-Introduced.html


CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 8


Introduced by Assembly Member Smith
(Coauthors: Assembly Members Cunningham, Megan Dahle, Davies, Kiley, Lackey, Mathis, Nguyen, Seyarto, Valladares, Voepel, and Waldron)

December 07, 2020


An act to amend Section 1339.1 of the Unemployment Insurance Code, relating to unemployment insurance, and declaring the urgency thereof, to take effect immediately.


LEGISLATIVE COUNSEL'S DIGEST


AB 8, as introduced, Smith. Unemployment benefits: direct deposit.
Existing law provides for unemployment compensation benefits to eligible persons who are unemployed through no fault of their own. These provisions are generally administered by the Employment Development Department. Existing law requires unemployment compensation benefits that are directly deposited to an account of the recipient’s choice to be deposited to a qualifying account. Existing law defines “qualifying account” for these purposes to mean a demand deposit or savings account at an insured financial institution in the name of the person entitled to receipt of public assistance payments or a prepaid card account that meets certain requirements, including that the prepaid card account may not be attached to any credit or overdraft feature that is automatically repaid from the account after delivery of the payment.
This bill would, by July 1, 2021, provide that the recipient of the unemployment compensation benefits has the right to choose whether the benefits payments are directly deposited into a qualifying account or applied to a prepaid debit card.
This bill would declare that it is to take effect immediately as an urgency statute.
Vote: 2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 1339.1 of the Unemployment Insurance Code is amended to read:

1339.1.
 (a) (1) Notwithstanding any other provisions of this part, if unemployment compensation benefit payments are directly deposited to an account of the recipient’s choice, as authorized under the federal Electronic Fund Transfer Act (EFTA) (15 U.S.C. Sec. 1693 et seq.), the payments may only be deposited to an account that meets the requirements of a qualifying account, as defined in paragraph (2), for deposit of public assistance payments, including unemployment compensation benefits.
(2) On or before July 1, 2021, the recipient shall have the right to choose whether to have the unemployment compensation benefit payments directly deposited into a qualifying account or applied to a prepaid debit card.

(2)

(3) For purposes of this section, a “qualifying account” is one of the following:
(A) A demand deposit or savings account at an insured financial institution in the name of the person entitled to receipt of public assistance payments.
(B) A prepaid card account that meets all of the following:
(i) The account is held at an insured financial institution.
(ii) The account is set up to meet the requirements for passthrough deposit or share insurance so that the funds accessible through the account are eligible for insurance for the benefit of the person entitled to the receipt of public assistance payments by the Federal Deposit Insurance Corporation in accordance with Part 330 of Title 12 of the Code of Federal Regulations, or the National Credit Union Share Insurance Fund in accordance with Part 745 of Title 12 of the Code of Federal Regulations.
(iii) The account is not attached to any credit or overdraft feature that is automatically repaid from the account after delivery of the payment.
(iv) The issuer of the card complies with all of the requirements, and provides the holder of the card with all of the consumer protections, that apply to a payroll card account under the rules implementing the EFTA or other rules subsequently adopted under the EFTA that apply to prepaid card accounts.

(3)

(4) A person or entity that issues a prepaid card or maintains or manages a prepaid card account that does not comply with paragraph (2) shall not accept or facilitate the direct deposit of unemployment compensation benefit payments to the prepaid card account.
(b) The department has no obligation to determine whether an account at the financial institution of the recipient’s choice is a qualifying account, as described in subdivision (a). For purposes of this section, the department shall not be held liable for authorizing a direct deposit of unemployment compensation benefit payments into a prepaid card account designated by the recipient that does not comply with paragraph (2) of subdivision (a).
(c) For the purposes of this section, the following definitions shall apply:
(1) “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.
(2) “Issuer” means a person or entity that issues a prepaid card.
(3) “Payroll card account” shall have the same meaning as that term is defined in the regulations implementing the EFTA.
(4) “Prepaid card” or “prepaid card account” means either of the following:
(A) 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.
(B) The same as those terms or related terms are defined in the regulations adopted under the EFTA regarding general use reloadable cards.

SEC. 2.

 This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to allow unemployment benefits to be utilized by claimants in the most effective manner during the current economic crisis brought on by the COVID-19 pandemic, it is necessary that this bill take effect immediately.
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