CBA-Sponsored Bill to Ease Banks’ Participation in School-Based Savings Programs Signed by Governor Brown
September 6, 2016
Last year the federal banking agencies issued guidance to encourage financial institutions to develop youth savings programs. These are collaborative efforts among banks, teachers and school administrators to provide financial education to students on school campuses that may involve taking deposits. The guidance states that the school is not considered a bank branch if certain conditions are met, such as that no services are provided to the general public and the principal purpose of a program is educational. Because existing California law requires state-chartered banks to file a notice with the Department of Business Oversight when establishing, relocating or re-designating a branch office, CBA sponsored a bill, AB 1784, to add new section 1083 the Financial Code to allow state-chartered banks to provide these educational services without having to give notice in each instance where a school-based savings programs is established. See CBA’s Regulatory Compliance Bulletin for more information.