Banks: noncustodial accounts.

Existing law, the Banking Law, authorizes a bank to participate in a financial education program that involves receiving deposits or paying withdrawals on the premises of, or at a facility used by, a school, subject to specified conditions, including that the bank employees work at the site only to participate in the program. The law requires a bank account by or in the name of a minor to be held for the exclusive right and benefit of the minor. This bill would authorize a bank to participate in a financial education program described above on the premises of a youth agency, as defined. The bill would also prohibit a bank from denying a checking or savings account to a person because the person is a minor or from requiring that minor to provide a cosignor or guarantor as a condition of opening a checking or savings account, except as provided. The bill would define "noncustodial account" to mean a checking or savings account that is held by a minor who is 14 years old and on which a person other than the minor is not a cosignor or guarantor. The bill would prohibit a bank from engaging in specified practices with respect to a noncustodial account, including by prohibiting a bank from charging a regular monthly fee or inactivity fee on the account or requiring the minor to provide a social security number as a condition of opening the account. The bill would also require a bank to collect specified demographic and income information related to noncustodial accounts and to annually report that information to the Commissioner of Business Oversight. Existing law establishes the Bank on California Program, which is a voluntary collaborative initiative that assists Californians in opening a bank or credit union account and saving for the future. This bill would require the program to develop and implement a plan to improve youth financial literacy, access to financial institutions, and awareness of noncustodial accounts.