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California State Assembly floor.

From Sacramento: SB 1075 Amended; SB 278 Passes Committee

This week, the California Credit Union League saw significant movement in Sacramento on two top-priority state legislative bills that would impact credit unions across California.

Senate Bill 1075 (Sen. Steven Bradford)
Senate Bill 1075 was amended to remove the three-day waiting period and instead replace it with a simple notification that will be sent to credit union members, letting them know they have overdrawn their account.

This notification is modeled after the National Credit Union Administration guidance (NCUA Letters to Credit Unions 05-CU-03), which indicates that credit unions should notify members whenever the overdraft service is used. This portion of the bill will go into effect January 1, 2025.

The bill was further amended to apply a one-year delayed implementation (January 1, 2026) for all state-chartered credit unions — regardless of asset size — for the fee cap portion of the bill. This year-long delay will give state-chartered credit unions parity with the Consumer Financial Protection Bureau’s (CFPB) overdraft fee cap proposal.

SB 1075 has come a long way since its introduction with the five-day grace period and a three-transaction maximum.

“The bill in print is the culmination of months of hard work,” said Robert Wilson, senior vice president of state government affairs for the League. “The League would like to thank everyone who attended our California Government Relations Rally (GRR) this past April, making phone calls, and sending Connect for the Cause messages to state legislators.”

Senate Bill 278 (Sen. Bill Dodd)
The League’s neutral position did not last long on Senate Bill 278, a bill dealing with elder financial abuse liability.

This bill has been amended to include a heavy-handed enforcement mechanism, which is outlined on page 9 of the California Assembly Judiciary Committee’s analysis.

The League has been working on this measure for 18 months, and the senator/author (Sen. Bill Dodd) said in committee that he wants to continue to iron out the enforcement piece of the bill.

League Contact and More Information
If you have questions about either bill, please email Robert Wilson for more information.

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