California Senate Bill SB497

California 2021-2022 Regular Session

• Introduced: 2/17/21
• Refer: 2/25/21
• Report Pass: 4/7/21
• Refer: 4/7/21
• Refer: 4/13/21
• Report Pass: 4/21/21
• Refer: 4/22/21
• Report Pass: 5/20/21
• Engrossed: 6/1/21
• Refer: 6/10/21
• Refer: 6/21/21
• Report Pass: 6/29/21
• Refer: 6/29/21
• Report Pass: 7/1/21
• Refer: 7/1/21
• Refer: 8/16/21
• Report Pass: 8/19/21
• Enrolled: 8/30/21
• Chaptered: 10/5/21
• Passed: 10/5/21

Caption

Qualifying accounts for direct deposit of publicly administered funds.

Impact

By redefining acceptable accounts for direct deposit, SB 497 is designed to enhance the security and reliability of receiving public assistance payments. This change aims to ensure that recipients only use accounts that provide consumer protections aligned with federal standards under the Truth in Lending Act and the Electronic Fund Transfer Act. The bill imposes additional responsibilities on the Employment Development Department (EDD) and local agencies concerning the management of these accounts, which could lead to increased operational costs.

Summary

Senate Bill 497 amends various sections of the Family Code, Unemployment Insurance Code, and Welfare and Institutions Code in California, primarily affecting how direct deposits of public assistance payments, such as unemployment compensation and child support, are handled. It establishes clearer definitions of 'qualifying accounts' necessary for receiving these deposits. The bill eliminates the previously accepted prepaid card account for direct deposits, allowing only demand deposit or savings accounts from insured financial institutions or prepaid accounts conforming to specific federal regulations.

Sentiment

The overall sentiment surrounding SB 497 appears to be supportive among advocacy groups for financial security as it aligns public assistance disbursements with consumer protection standards. Stakeholders, including agencies administering these payments, may have concerns regarding the implications of increased administrative burdens and the potential cost of implementing the new requirements. The move to eliminate prepaid card accounts is seen as a proactive step but raises questions about accessibility for recipients who may rely on such options.

Contention

Notable points of contention include the potential exclusion of recipients who do not have access to traditional banking services, as prepaid accounts catered to those lacking conventional bank accounts. Critics argue that removing prepaid options could disproportionately affect vulnerable populations who may face challenges opening demand deposit accounts in insured financial institutions. The balance between financial security and accessibility for all recipients remains a critical aspect of the bill's discussions.