SACRAMENTO- In a double victory for all Californians seeking financial security, the Assembly yesterday passed two bills that would increase access to banking services and financial education.
The two measures provide important tools for fighting foreclosures, debt, the perpetuation of poverty, and wider economic stagnation.
Assembly Bill 2581 (Bradford), the Banking Development Districts bill, would provide incentives to banks and credit unions that locate in underserved areas. Assembly Bill 2457 (Salas) would create a Financial Literacy Fund and authorize the Controller to accept donations in order to provide increased consumer financial education services. Both bills have cleared the Assembly and await Committee hearings in the Senate.
"We applaud the State Assembly for helping working families who help themselves," said State Controller John Chiang, a co-sponsor of AB 2457. "This bill will provide Californians with the resources they need to make smart financial decisions that can protect them during tough economic times and help our State's economic recovery."
AB 2581, which passed with 47 votes, would create a Banking Development District program that identifies communities lacking mainstream financial institutions throughout the state, and provides state deposits and local incentives to banks and credit unions that locate in those areas and provide low-income consumers with affordable financial products and services. The measure is based on the successful New York State program.
The City of Los Angeles passed its own Banking Development Ordinance late last year, a measure that would be reinforced by a statewide program.
"It is unfortunate but true that working families and the unbanked often use fringe financial services," said Assemblyman Steven Bradford (D-Gardena). "AB 2581 would encourage responsible financial institutions to do the right thing- provide services that low-income people need, in their neighborhoods."
AB 2457 (Salas) passed with 57 votes and would create a Financial Literacy Fund in the Office of the Treasurer that would allow the State Controller's office to provide consumers with the information and guidance they need to make sound financial decisions.
"I applaud my Assembly colleagues for recognizing the value of promoting financial literacy. The more information consumers have, the better financial decisions they are likely to make," said Assemblywoman Mary Salas (D-Chula Vista). "AB 2457 enables partnerships with the financial services community and governmental and nongovernmental stakeholders to improve California's financial literacy."
"The Assembly's support of these two bills shows that, even in the midst of a budget crisis, it is possible to advance sound policies that will help Californians achieve long-term financial stability," said Olivia Calderon, Legislative Director of the California Asset Building Program at the New America Foundation. "Thanks to the leadership of State Controller John Chiang, and Assembly Members Mary Salas and Stephen Bradford, Californians will soon have greater access to affordable financial services and consumer financial education."
The New America Foundation's California Asset Building Program is sponsoring the Banking Development measure and is co-sponsor of the Financial Literacy Fund measure. The Program has long worked to advance financial empowerment policies that make it easier for Californians to build savings and enter the financial mainstream.
For media inquiries, please contact Elizabeth Wu at (510) 295-9859 or wu@newamerica.net.
About the New America Foundation
The New America Foundation is a nonprofit, nonpartisan public policy institute that invests in new thinkers and new ideas to address the next generation of challenges facing the United States.
