CalAccount Program.

Assembly Member Garcia's CalAccount Program legislation aims to establish a state-administered banking system providing no-fee transaction accounts to California residents, addressing findings that nearly one in five California households lacks adequate access to traditional banking services. The program would require employers to facilitate voluntary payroll deposits while mandating landlords to accept rent payments from these accounts.

The bill transforms the existing CalAccount Blue Ribbon Commission into a permanent oversight body tasked with implementing the program through a contracted financial services network administrator. This administrator would partner with banks and credit unions to provide federally-insured accounts featuring no minimum balances, zero fees, and free ATM access through an extensive in-network system.

Key provisions include protections for vulnerable populations, such as individuals experiencing housing instability or domestic violence, through enhanced privacy measures and flexible identification requirements. The program also establishes mechanisms for automated bill payments to registered payees and allows integration with public benefits distribution systems.

Employers with more than 10 employees must maintain payroll direct deposit capabilities enabling worker participation, while hiring entities contracting with over 25 independent contractors face similar requirements. The Labor Commissioner holds enforcement authority, with civil penalties for non-compliance starting at $250 per worker for initial violations.

The legislation creates the CalAccount Fund in the State Treasury to support program operations and requires annual reporting on participation rates, demographic data, and program performance. Implementation would occur in phases, with the commission required to issue a request for proposals for the network administrator by January 2027.