SACRAMENTO, Calif.—California lawmakers are backing a bill to create BankCal, a government program that would offer a "zero-fee, zero-penalty" consumer banking option to the state’s residents.
The measure is aimed at "protecting consumers who lack access to traditional banking services from predatory, discriminatory, and costly alternatives," the legislation states.
Assembly Bill 1177, which lawmakers and advocates unveiled, would establish a Public Banking Option Board, which would partner with financial institutions to offer the free accounts. California employers with five or more employees would be required to facilitate direct deposit, when requested, into the account, Banking Dive reported.
The bill is scheduled to be heard April 29 before the Assembly Banking and Finance Committee.
"California families are losing hundreds of millions of dollars in fees a year to payday lenders and check cashing stores that prey on the most vulnerable," Democratic Assembly Member Miguel Santiago, lead author of the bill, said in a statement. "With BankCal, more families will be able to keep the money they’ve earned, put food on the table, and build their savings."