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California State Assembly floor.

League-Engaged Bills in Sacramento Drop or Move Forward

A handful of important bills kept the California Credit Union League busy in Sacramento this week, including overdraft protection and non-sufficient fund (NSF) fees, automated decision tools, small business debt, pricing algorithms, background checks, personal finance curriculum, and state charter modernization.

California Overdraft and NSF Fees Legislation Update
Senate Bill 1075 (Bradford) — state-chartered credit union legislation regarding overdraft and non-sufficient fund fees — is on the California Senate floor and must pass by May 24. Please continue encouraging credit union supporters to Connect for the Cause to oppose this bill!

SB 1075 imposes stringent requirements on how state-chartered credit unions serve their members that utilize overdraft protection services by limiting the number of overdraft and NSF transactions to three per month. It also mandates a five-day waiting period before a fee can be assessed for an overdraft transaction. You can read more about the bill and its harmful effects in this Senate Floor Alert sent by the League to all legislators in the California State Senate.

If you have any questions about SB 1075 or Connect for the Cause, email Robert Wilson, senior vice president of state government affairs for the California and Nevada Credit Union Leagues.

Automated Tools, Business Debt, Pricing Algorithms, & Background Checks
California’s Assembly Bill 2930 (Bauer-Kahan), which would require an impact assessment of automated decision tools, passed the California Assembly Privacy and Consumer Protection Committee and the Assembly Judiciary Committee. The League opposes this bill. It is in the Assembly Appropriations Committee.

Senate Bill 1286 (Min), a bill the League opposes, would expand the Rosenthal Fair Debt Collection Practices Act in California to include small business debt as currently drafted. The author recognized the originally drafted legislation was unworkable and is working on a new approach which the League sees as a step in the right direction. The League will continue working with the author.

Another bill the League opposes, Senate Bill 1154 (Hurtado), is not moving forward. The California Preventing Algorithmic Collusion Act of 2024 would have required businesses to disclose details about their pricing algorithms and banned the use of pricing algorithms incorporating non-public competitor data, creating burdensome reporting requirements, hurting price competition, and exposing business liability.

Lastly, Senate Bill 1345 (Smallwood-Cuevas), which would have made the use of background checks nearly impossible, will not move forward.

Personal Finance Curriculum Efforts and CA State Charter Modernization
Two state financial literacy bills the League lobbied in support of at the California Government Relations Rally (GRR) earlier this month are moving forward without any opposition so far.

Assembly Bill 1871 (Alanis), which incorporates personal finance content into the existing social sciences area of study for school grades 7 – 12, passed out of the California Assembly Education Committee and Appropriations Committee and now heads to the Assembly floor. Assembly Bill 2927 (McCarty), which requires high school students to take a one-semester personal finance course as a graduation requirement, passed out of the education committee with only minor amendments and now heads to the appropriations committee.

Assembly Bill 2062 (Grayson), the League-sponsored state charter modernization bill to strengthen the dual-charter credit union system, passed out of the California Assembly Banking and Finance Committee and is now in the Assembly Appropriations Committee.

“We would like to thank League members for their continued support of the work we do each week in Sacramento, as well as everyone who is making their voices heard on SB 1075,” Wilson said. “Without your support, we would not be able to make an enormous impact in our state capitol. Please continue opposing SB 1057 through Connect for the Cause.”

Reducing Overdraft Demand Letter and Litigation Risk
The California and Nevada Credit Union Leagues have provided an analysis detailing the ongoing rise in regulatory, administrative, and legislative actions (along with a fresh wave of demand letters and class-action lawsuits) in relation to recent developments in overdraft and non-sufficient fund fees practices.

These revolve around allegations that specific overdraft, returned deposit item, and NSF fees and practices are unfair, deceptive, abusive, or otherwise unlawful. The intention of this communication is to inform credit unions of recent developments and provide an update on measures the Leagues are taking to tackle these challenges.

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