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California Association of Private Postsecondary Schools

California A.B. 1927 - Governance & State Oversight

04/14/2014

Sponsor: Assemblymember Jim Frazier (D)

Summary: Requires the Board of Governors of the California Community Colleges and the Trustees of the California State Universities, and requests 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.

Requires the policies adopted to ensure that contracts between postsecondary educational institutions and banks or other financial institutions to disburse a student’s financial aid award to:
(1) Prohibit revenue sharing between a postsecondary educational institution and banks or other financial institutions.
(2) Prohibit the sale of private information that the student or the postsecondary educational institution provides the bank or other financial institution.
(3) Prohibit the debit card, prepaid card or preloaded card use from imposing fees.
(4) Prohibit the debit card, prepaid card or preloaded card from being cobranded, including the logo of the postsecondary educational institution.
(5) Ensure that the student does not incur any cost in opening the account or initially receiving the debit card, prepaid card or preloaded card.
(6) 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.
(7) Ensure that the debit card, prepaid card or preloaded card can be widely used.
(8) 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.
(9) Prohibits a bank or other financial institution from imposing a fee on a student for the use of a debit card, prepaid card or preloaded card.
(10) Requires any fees imposed by the bank or other financial institution to be paid by the postsecondary educational institution.


Amendment #1 (4/10/2014): http://www.leginfo.ca.gov/pub/13-14/bill/asm/ab_1901-1950/ab_1927_bill_20140410_amended_asm_v98.pdf

Introduced: http://www.leginfo.ca.gov/pub/13-14/bill/asm/ab_1901-1950/ab_1927_bill_20140219_introduced.pdf

Status: Introduced 2/19/2014. Referred to Assembly Committee on Higher Education and Assembly Committee on Banking and Finance 2/27/2014. Hearing held, reported 4/1/2014. Withdrawn, amended, re-referred to Assembly Committee on Banking and Finance . Hearing scheduled 4/21/2014.

Outlook: This measure was withdrawn by the sponsor, amended and re-referred to the Assembly Government Organization Committee. The author's amendment prohibits a bank or other financial institution from imposing a fee on a student for the use of a debit card, prepaid card or preloaded card. The author's amendment also requires any fees imposed by the bank or other financial institution to be paid by the postsecondary educational institution.

After the Assembly Committee on Higher Education reported out this measure, the Assembly Committee on Banking and Finance scheduled an April 21 hearing on this measure where public testimony will be excepted. Written testimony should be submitted in advance of the hearing. Generally, measures are acted upon during their public hearing if they are considered by the committee. Action will be taken at the discretion of the chairman.

During the April1 hearing of the Assembly Committee on Higher Education, this measure was reported favorably by a 9-4 vote. The sponsor introduced this measure as an effort to protect students by ensuring financial aid money they receive goes to the purpose for which they were allocated and not exorbitant fees set by financial institutions. Representatives of the Student Senate for California Community Colleges and California Public Interest Research Group testified in favor of the measure.

The Assembly Committee on Judiciary is chaired by Assembly Member Das Williams (D).  Committees are not required to consider every measure referred to them.

The sponsor is a member of the majority party but has not garnered the support of any cosponsors. The Democratic Party controls both legislative chambers as well as the Office of Governor.

*Information provided by www.stateside.com