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Legislative banking committee room.

CA’s Overdraft-NSF Bill Heads to Assembly Banking Committee

Senate Bill 1075 — the bill authored by California Sen. Steven Bradford that unfairly targets state-chartered credit unions which offer courtesy overdraft protection — recently passed the California State Senate and is now in the Assembly.

The California Credit Union League would like to thank every credit union advocate who sent more than 9,000 messages to state senators opposing SB 1075. However, the movement’s work is not done yet.

Now that the bill is in the Assembly, the League needs all California credit union members to Connect For The Cause again. Please have credit union members contact their assemblymembers TODAY to oppose SB 1075.

The League remains firmly opposed to SB 1075. Even with recent amendments, the bill still includes an extremely problematic three-day waiting period in which a credit union must wait to charge an overdraft fee.

The League has serious concerns about the feasibility of implementing any sort of waiting period. Credit unions’ core processing systems are not designed with this waiting period in mind, and there are questions about how this could even be implemented. The waiting period will cause state-chartered credit unions to rethink offering courtesy overdraft pay for their members.

Credit unions were established over 100 years ago to provide financial services to those overlooked by traditional lenders. Overdraft services were introduced with this mission in mind, aiming to assist credit union members in accessing funds they lacked in their accounts. Courtesy overdraft empowers consumers to manage their finances and meet their immediate financial needs. SB 1075 threatens to eliminate a financial tool that continues to be desired among credit union members.

For context, SB 1075 has been on the Senate floor for well over a month before moving on the second-to-last-day of the house-of-origin deadline — a testament to the aggressive grassroots and lobbing efforts by the League and its member credit unions:

  • This bill was amended twice on the floor, which is not usual and shows that the author of the measure took note of the League’s concerns.
  • During questions on the floor presentation, Bradford was asked by Sen. Susan Rubio if he intends to remove the grace period from the bill. Bradford responded that the bill’s proponents are were “still in negotiations on removing the grace period altogether.”
  • Bradford also called SB 1075 a “work in progress.”

The League would like to recognize and thank the many senators who voted “no” or abstained from voting on SB 1075.

SB 1075 will be heard in the Assembly Banking and Financial Institutions Committee soon, so the League needs your help today! Please have your credit union’s members Connect For The Cause and tell your local assemblymember to oppose SB 1075.

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