Highlights of 2005 State Chaptered Legislation
The legislation noted below is a compendium of most, but not all of the legislation that may have an impact on financial institutions. Copies of these enrolled bills may be found at http://www.leginfo.ca.gov/bilinfo.html
AB 434 (Parra). Chapter 94, Statutes of 2005. Credit Unions.
This bill allows state chartered credit unions to offer tax deductible Health Savings Accounts (“HSAs”) to members and clarifies existing law that allows credit unions to offer Educational Savings Accounts (“ESAs”).
AB 746 (Blakeslee). Chapter 426, Statutes of 2005. Public Utilities, Payment of Billings.
This bill allows utilities to accept credit or debit card payments, and enables, with the approval of the Public Utilities Commission, the utilities to recover the costs of such transactions through fees for customers using credit or debit cards, or, if it is determined that the savings to the utilities exceeds the costs for such transactions, the net savings would be passed on to the customer.
AB 901 (Ridley-Thomas). Chapter 531, Statues of 2005. Covered Loans.
The bill amends the California Covered Loan Law (predatory lending) by increasing the principal balance of loans subject to the law from $250,000 to a loan which does not exceed the current conforming loan limit for a single family dwelling as established by the Federal National Mortgage Association (“FNMA”) (which is currently $359,650). The bill also provides that an existing law that a required annual report of a county district attorney to a county board of supervisors regarding real estate fraud crimes be submitted to the Legislative Analyst Office, which shall compile the results and submit them to the Legislature.
AB 1304 (Calderon). Chapter 41, Statutes of 2005. Substitute Checks.
This bill incorporates the new negotiable instrument created by Check 21 (“substitute check”) into the California Commercial Code with regard to paid items and customer access to copies of paid items.
AB 1527 (Liu). Chapter 340, Statutes of 2005. Financial Institutions: Accounts.
This bill prohibits a financial institution from using a previously issued customer account number until three years have passed, unless the account number is reissued as the result of a sale of accounts among financial institutions or as the result of a merger or acquisition between financial institutions.
ACR 31 Resolution Chapter 31. Financial Empowerment Month.
This Assembly Concurrent Resolution declares April 2005 as Financial Empowerment Month. The resolution states that the Legislature encourages financial institutions and consumer groups to work together to: provide written materials and services to individuals on an ongoing basis that will allow them to further educate themselves and avail themselves of the financial opportunities and resources that are currently available; and to make the goals of financial empowerment a reality by working with community groups throughout the state to assist in the distribution of these materials to the greatest possible audience.
SB 389 (Morrow). Chapter 256, Statutes of 2005. ATM Surcharges.
The bill provides that an agreement to operate or share an automated teller machine may not prohibit, limit, or restrict the right of an operator or owner of an automated teller machine to charge a customer conducting a transaction using an account from a financial institution located outside the United States an access fee or surcharge.
SB 802 (Simitian). Chapter 445, Statutes of 2005. Debit Cards.
This bill prohibits a person or business that accepts debit cards for a business transaction from printing the expiration date or more than the last five digits of the debit card account number upon any electronically printed receipt provided to the cardholder.
SB 1018 (Simitian). Chapter 140, Statutes of 2005. Elder and Dependent Adult Abuse.
This bill establishes the Financial Elder Abuse Reporting Act of 2005, which extends mandated reporting requirements for financial abuse of an elder or dependent adult to all officers and employees of financial institutions. Among the numerous provisions of the bill: effective January 1, 2007 and a “sunset” provision of January 1, 2013; requires a mandated reporter of suspected financial abuse of an elder or dependent adult who has direct contact with such person or who reviews or approves the documents, records or transactions in connection with providing financial services to the elder or dependent adult and has observed or has knowledge of an incident which appears to be financial abuse to report the incident by telephone immediately or as soon as practicable, and by written report within two working days to the local protective services agency or the local law enforcement agency; repeals the criminal misdemeanor and civil penalties against an employee who fails to report an instance of elder or dependent adult financial abuse and instead provides for civil penalties which shall be paid by the financial institution that is the employer of the mandated reporter; provides that the civil penalty can only be recovered in a civil action brought against the financial institution by the Attorney General, district attorney, or county counsel; provides that the bill shall does not limit, expand or modify any civil liability or remedy available under this or any other law; reports of suspected financial abuse of an elder or dependent adult made by an employee or officer of a financial institution pursuant to this law are covered under subdivision (b) of Section 47 of the Civil code; adds county adult protective services offices and a long-term care ombudsman to the list of state and local officers and agencies that can request information from an office or branch of a financial institution when they are investigating the financial abuse of an elder or dependent adult.