Senate Standing Committee on Banking and Financial Institutions

Thank you, Madam Chair Members. First, I'd like to thank you and your staff for working with our office and the sponsor on this measure. I'll be accepting the suggested amendment outlined on page five of the analysis to remove the proposed change that would reduce the minimum loan term from four months to three months.

As you know, every five years, the California pawn brokers come before the Legislature to request approval to adjust maximum fees that can be charged on a pawn loan to keep pace with rising operational costs. And we are now at that five year mark. The Bill ensures financial viability of the pawn industry by increasing handling and storage fees to account for increased security costs, allowing for a new remote transaction fee and increasing the fee to prepare a loan expiration notice.

Pawnshops throughout the state serve as a reliable source of short term loans, allowing someone to access much needed cash without the hassle often associated with traditional lending institutions. Whether it's covering medical bills, car repairs, or other urgent expenses, our pawn shops in this state offer an instant and accessible solution for those in need. Current law limits the amount of compensation pawn brokers may charge or receive for providing these critical services.

And without the fee increases provided here, lending businesses will continue to close throughout the state, leaving an immediate and dramatic impact on the low income communities they serve and that we fight for. At the appropriate time, I will respectfully ask for your I vote here with me to testify in support of the Bill are former Assemblymember Alberto Torrico, on behalf of the California Pawn Brokers Association, and Jan Snyder, the Legislative Chair of the California Pawn Brokers Association and owner of ... and jewelry and loan.

We will go ahead and begin with testimony and support.

Thank you. Good afternoon, Madam Chair, Members of the Committee. Let me begin by thanking Senator Roth, his staff, ... Lipper, on their very hard work and diligence on this Bill. I want to do the same for you, Madam Chair, and your staff very much appreciate the conversation and happy to take the amendment it as well. I stand before you on behalf of the California Association Pawn Brokers who are responsible for the Bill. I'm just going to turn it over for very brief comments from Miss Snyder. Thank you very much. Appreciate it.

Good afternoon, Madam Chair Committee. I want to thank you for allowing me to testify today in support of SB 1198. As was mentioned, we every five years come and try to get a fee increase to catch up with our cost of doing business. My shop is in San Jose. My insurance alone has gone up 37% since our last fee increase because of the scourge of retail theft. We had four incidents, major incidents, in my shop alone in the last three years. And everybody.

oh, you have insurance? Well, yeah, we have insurance, but it doesn't cover everything, number one. And it certainly doesn't cover improvements that we need to make ongoing, to make our stores more and more and more secure, more fortress like, if you will.

So that's been really tough, and it's. It's one of the main reasons that we are seeking these fee increases is to cover those costs. And I've been in business 46 years. It's a family business. We have six employees, two of which are my son and daughter in law. And other than that, if you have any questions for me about our industry, I'm more than happy to answer them.

Thank you so much. Next, we will hear from any witnesses in opposition. Yes, we do. We have a quorum, so we're going to go ahead and establish a quorum. If we can, please call roll.

[Roll Call]

Thank you. We have quorum. We have a motion to move the Bill. We don't have any witnesses in opposition registered. If there are any in the room, please come forward. All right, seeing none, we have a motion. Members, any questions or comments? Seeing no questions or comments.

It's nice that you have your voice back.

Thank you. I have more of my voice back. Yesterday was painful, but it's back. Thank you. Thank you, Vice Chair. I do want to thank you, the author and also the sponsors for working on the Committee amendments. We appreciate those amendments and think that's in the right direction. So with that, we have a motion, and the motion is do pass. But first, amend to re refer to the Committee on Judiciary. So we will go ahead and call the roll.

[Roll Call]

All right, that has four. We'll leave the roll open for additional Members to add on. Thank you. And I didn't give you the opportunity to close.

Yes, you did. Ma'am, I respectfully asked for an aye vote. And I do want to thank you and thank you, Members.

Sorry, I was just very aware of your, of the time crunch, too, where you needed to be next. So apologies. All right. And we will go ahead and take the consent calendar. First on consent, we have Senate Bill 985, Ochoa Bogue do we have a motion for consent? So move a move by Senator Bradford. We'll go ahead and call the roll.

[Roll Call]

Votes, and we will leave that open for additional Members to add on and we will go to our final Bill. We have Senator Bradford with Senate Bill 1075.

Thank you, Madam Chair Members. I'm presenting SB 1075, which will establish basic consumer protections for Californians who are Members of credit unions. This measure will create a new but needed safeguard for from overdraft and non sufficient funds, or NSF's fees, by requiring credit unions to have a five business day grace period for a consumer to pay back any overdraft amount before a fee is charged. It will also place a cap on the amount of fees that can be charged per month to three.

Overdraft and NSF fees tend to disproportionately affect those who can least afford them. Consumer Financial Protection Bureau estimates 80% of overdraft fees come from just 9% of account holders industry wide. And the data also first annual report of income from the non sufficient funds and overdraft fees was released on March of 2023, thanks to our Senator archers, a Bill that she did a number of years ago, SB 1415.

This report showed that 28 states state chartered credit unions generate 40% or more of their net income from these fees alone. Six credit unions generate more than 100% of their net income from these fees. This means that these credit unions can cover all of their expenses with just these fees alone. In addition to making a profit, overdraft or courtesy pay is an opt in program offered by credit unions where Members can overdraft their account and have the balances go negative to complete a transaction.

NSF fees are charged whenever a consumer tries to withdraw, draw money greater than the account balance, but are not signed up for. Overdraft protection fees on average range from $20 to $35, which is a significant amount of money to pay when you're in the negative. Credit unions are nonprofit organizations that are supposed to be funded by consumers, for consumers, especially consumers who are overlooked by traditional financial institutions.

And although overdraft is viewed as a financial tool by credit unions, its fees are inherently predatory and target the most financially vulnerable Californians. While the industry says that the overdraft is a benefit to their Members, it's really a benefit to their bottom line. The industry says that consumers prefer to overdraft in order to get their groceries and pay their bills, maintain a roof over their heads, but they do not want to overdraft. They need to overdraft in order to survive.

They deserve the opportunity to make themselves and their account whole before they're punished for trying to do so. And I ask for aye vote Senator Bradford.

We will go ahead and welcome any witnesses in support.

Good afternoon, Chair Limon. I'm Jyotswaroop Kaur Bawa with the Rise Economy, it is my honor to testify in support of hardworking, low income BIPOC Californians who would surely benefit from US SB 1075. Federal and state regulatory agencies, the CFPB and the DFPI have published overdraft fee data. We see that people of color are overrepresented in those bearing the burden of cost of these overdraft and non sufficient Fund fees, also known as junk fees.

In a recent survey, we noted that half of those who overdrafted reported that the most recent overdaft was unintentional and the majority replenish these funds within days. The grace period proposed in this Bill supports working people in making ends meet between paychecks rise economy analyzed the DFPI data from last year. What we found most problematic is that compared to banks, credit unions reported higher percentages of income earned from revenue collected via junk fees.

Collecting millions in junk fees and depending so heavily on this revenue is inconsistent with the credit union industries insistence that they are community minded and serve the Members needs adequately. Take for example the Educational Employees credit union that serves rural communities, Fresno, Madera and Kern counties to name a few, and Redwood City unions serving Bay Area communities and Napa Valley among others. Both credit unions tout millions in assets. In billions in assets. Yet yet they are here pushing back to reduce the fees collected.

Yet they are here to push back on these junk fees. We urge you to recognize their revenue stream. We urge you to recognize these fees that industry greed predatory of Low income Members and not a service or benefit provided by the credit unions. And if certain credit unions must rely on the revenue from charging unsuspecting consumer fees they cannot afford, maybe those credit unions should consider another line of business. Why should the state allow a predatory business model to flourish?

This Bill is an appropriate step to protect workers at a time when the state is struggling to close the racial, income and wealth gap, we respectfully ask for an aye vote. Thank you.

Thank you. The next lead witness in support.

Good afternoon, Madam Chair and Members. Robert Herrell. I'm the Executive Director of the Consumer Federation of California, and we support Senator Bradford's effort on SB 1075. I would just note the analysis does an excellent job of going into great detail about the history of these fees. What's brewing? I'll try not to be repetitive to that. I would also compliment you, Madam Chair, because your Bill of a few years ago, which the consumer Fed supported, led to this report. This report shows us where the problem is.

And what we see in that data is that 35 state chartered credit unions get more than 5% of their overall income from NSF and overdraft fees. In comparison, the state chartered banks, you're looking at maybe one or two that meet that same threshold. So clearly, this report done by the Department of Financial Protection and Innovation shows us that there is a massive problem going on with state chartered credit unions. And so that's why Senator Bradford has focused his Bill in that appropriate area.

We would note that there is a rule that the Consumer Financial Protection Bureau at the federal level is looking at this. Consumer Fed of California, as many of you know, has been working on junk and hidden fees for a number of years. This is part of that agenda. There is a threshold at the federal proposed rule of $10 billion that's important to recognize. And of course, they're dealing with federally chartered institutions.

Here in California, you can take steps to protect consumers, particularly the consumers that Miss Bawa from rise economy indicated lower income communities of color, consumers who are being taken advantage of by these very, very high fees. I'd like to close with just two brief comments. One, these fees are wildly disproportionate to the amount of money that it actually takes to process and promulgate such a fee. That notion of proportionality of fees is becoming very important again at the federal level.

Whether you look at what the FTC is looking at with junk fees or the CFPP or other federal entities, proportionality is important. And these fees are not proportionate to what they cost those institutions. Finally, I'd like to just note one pattern that we've seen in industry that's troublesome. This is what I refer to as ordering. Say a consumer has three items of charges to be taken out of their account.

What many financial institutions will do is they will take the largest one first, thereby putting the consumer in the red and then the two smaller ones, if they had been taken first, would not have put the consumer in the red. What does this do? This allows the financial institution, the credit union, to charge overdraft three times. When had they ordered it differently, it only would have been one. This is a pernicious and problematic practice. For these and other reasons, we support Senator Bradford's efforts in this area, and we're happy to be available for technical questions should they come up.

Thank you. Any other witnesses in support in the room, please just state your entity and your position.

Chris Myers with the California School Employees Association in support of the Bill.

Thank you.

Thank you. All right. Seeing no other folks in the room in support, we will invite people in opposition. Lead.

Good afternoon, Senator. Chair Members of the Committee, Robert Wilson, California Credit Union League here in opposition to SB 1075. SB 1075 imposes stringent requirements on how state charter credit unions, and only state charter credit unions serve their Members that utilize overdraft services. As the Senator said, it limits the number of Non Sufficient Fund and overdraft transactions to three per month and mandates a five day waiting period before a fee can be assessed.

Credit unions are not for profit, Member owned cooperative started over 100 years ago to provide financial services to those that were left out of the fray. Overdraft services were proposed in credit unions with this goal in mind to serve people that needed access to some funds. It's important to set the record straight on courtesy overdraft pay.

It is an opt in service under Fed Reg E, meaning the consumer knows what they're opting into when they choose to do this and they use this as a financial tool. As we stated, consumers like the opportunity to get their leave with their bag of groceries or their gas, so they're not bouncing a check on rent or making a late payment on a car. So it's very much a financial tool when we ask our Members.

As for the DFPI report and the discrepancies that have been noted, I'd like to note that state charter credit unions serve individuals, while a lot of state chartered banks are serving commercial clients. I will also note that net income is not the best statistic for that. If you take any revenue stream and point it out in net income, it's going to be a very. It's not how finances are really viewed in the industry. So onto SB 1075. Its timing is premature in our eyes.

As was stated earlier, the Consumer Financial Protection Bureau proposed a rule in 2024 regarding courtesy overdraft that provide two options for very large financial institutions. A break even analysis or benchmark fee ranging from three to $14. We're still awaiting that final rule. I will note it is for financial institutions, both state and federally chartered, over $10 billion. So there are some state chartered credit unions that will hit that. However, our industry sees that very much as a industry standard that's going to come forward.

There's going to be downward cost pressure. If someone wants to use overdraft, they're just going to go to a large financial institution unless the small financial institution offers the same price as well as potential litigation. So it's very much seen as an industry standard. When the CFPB arrives at that number, the five day waiting period in the Bill is entirely too long. There are losses associated with overdraft transactions.

The Bay Area credit union that has a 22% charge off rate with overdraft transactions currently and five days is a full pay period if you get paid weekly. If you're getting paid biweekly, that's half a pay period. Limiting transaction free for month will limit consumer choice, and we have issues with that as well. When we ask our credit union Members about courtesy overdraft, they view it as a means to manage their finances effectively.

Finally, and perhaps most importantly, with this Bill, it only impacts state charter credit unions. It's a very small slice of the pie. If a Member wants to utilize overdraft services, they're simply going to close their credit union account and they have the ability to walk across the street to whatever financial institution is there and access overdraft services without any of these limitations on there. I will say there's a credit union in the Central Valley that pulled their Members that used overdraft within the last month.

89% of them said they liked the service. They viewed it positively, and 70% of those in that same survey said they would rethink their membership if the overdrafts were was to go away. Our Members spent a lot of time going to their membership and asking them what they said. The results have come back very positive. So I say SB 1075 cannot be viewed in a vacuum. We must stop to consider the downward price pressure from the CFPB. And with that, California Credit Union League is asking for a no vote on SB 1075. Thank you.

Thank you. Any other lead witnesses in opposition? All right, seeing no other lead witnesses in opposition. Any other entities or groups in opposition? All right, seeing none, we will move it to Members questions. Comments? Senator Caballero.

thank you very much. This one. This one. This Bill is a hard one for me and I want to thank the author for bringing this forward and for the chair for authoring the legislation that got us some of the data in regards to this. The whole issue of the whole banking issue is one I think we've all been struggling with, which is, how do we get credit into the hands of people who have a hard time getting credit for a whole variety of reasons.

Right. And one of the, one of the pluses for the credit, the credit unions. And I have to say that for years I wanted to be a credit union Member, but couldn't because you had to be part of an organization that started a credit union.

So I was glad when the rules changed, and I'm proud to be a credit union Member now, is that they provide an opportunity for, for individuals to be able to have services and to not charge for most of those services, which is not the banking model. And so the concern I have is to. Well, and so here's where I'm going with this, is I was struggling with what could you give the, the credit unions that would be a incentive for them to rethink this overdraft?

And I didn't come up with the answer otherwise, I'd have a suggestion. But what I will ask is that I'll support the Bill today, I'll make the motion when it's appropriate. But I think it's important to have a conversation with the credit unions to figure out is it, is the system that you're suggesting, is that the best way to go about it, or is a better way to go about it reducing what they charge in terms of the proportionality issue that was raised?

Or is there something in a change to their charter that would give them more flexibility in terms of what they, they could do in terms of charges? Because one way or another, while we want to have a lower fee that's charged for an overdraft, what you then do is say, okay, we're going to spread the cost out to everybody somehow, either by charging for a service that they heretofore did not charge for or just for maintaining the accounts there.

And I would hate to see that happen, because one of the beauties of a credit union is really having available cash. Being able to use the ATM without any service charge, I mean, that's like a miracle. I remember using my bank card and they used to charge all the time and it became ridiculous at some point. It's your money, you're getting 1% interest on it, but you got to pay to, to take money out when you need it.

So as I said, I appreciate what you're trying to accomplish here. And there's no question in my mind that it's the poorest that are paying these fees, but it's a question of what's fair in terms of allowing a nonprofit organization that really has their membership at heart to continue to do business. So with that said, I'm done.

Thank you. And Senator Caballero, did I hear that you're making the motion? All right, so we do have a motion. Next we will move to Senator Portantino.

Thank you. And I appreciate the author and the chair for highlighting this issue. And like Senator Caballero, I'm struggling because credit unions are nonprofits. They're Member based. They reach out to the unbanked to try to bring more people into the financial world to extend this, this thing that many of us just grew up as a commonplace. You know, I remember my mom, who was a widow, encouraging me to open up an account. And, you know, credit unions, and it was at a credit union.

And, you know, credit unions do have a, have a, have a mission of serving their Members. Can I ask a couple questions to some of the folks who presented? Yes, if the gentleman from the consumer Federation can come up first, I have a question, just one question for you. When you talked about the stacking of the penalties, the ordering, that's just not limited to credit unions. Other financial institutions do the same.

Do the banks do the same thing or are the credit unions the only ones guilty of that?

I'm not saying that they're the only ones guilty of it. But what you've seen, again, a lot of this is at the national level. You've seen a lot of the larger financial institutions, federally chartered banks, for example, significantly lower their overdraft and NSF fees. Ordering is tough for even the regulators to find because then you get into a very technical conversation about the timing of transactions and things like that.

But we know, and we, CFC was one of 142 groups that just signed a letter earlier this week into national and state groups, into the CFPB regarding the pending rule there, the proposed rule there about it. I would love to see if it's possible something be done on ordering, but I don't want to get ahead of Senator Bradford because this is not in his Bill.

I just wanted to point out that it's a way that's being used right now to maximize revenue from disproportionately poor communities of color, consumers by misordering, I would say, the transactions. Well, my point is they're not the only ones that are ordering other financial institutions order banks. Other federally chartered credit unions. Not just state chartered credit unions, right.

No, but I'll be honest with you, Senator, I was, when this report came out, pursuant to Senator Limon's Bill, I was surprised to the point of being shocked at the disparity. And even if you account for the point that the credit unions make, which is, well, there's more state charter commercial banks. Even if you account for that, there is a wildly disproportionate result in that data between credit unions that are very aggressive and getting a lot of revenue from overdraft, NSF versus state chartered banks.

Thank you. And I have questions, if I may, Madam Chair, if you could come on up. Thank you. So I'll ask you a similar question. Do the federally chartered credit unions do the same practice as the state chartered.

Credit unions in terms of ordering? I mean, I believe ordering is actually a UDAP violation currently. So I'm not sure how much of that is still occurring. Perhaps it did. I know that there's a practice that was called authorized positive settle negative. That CFPB issued a circular in 2022 on, as well as the Attorney General just issued a letter that's basically saying you thought you had $100 in your account, how the accounts came in, then that triggered an overdraft.

You spent $90 at target and when the check came in. So it's kind of like the ordering thing. So they should not be partaking in that right now. If they are, they have people to answer to for that. But to your point, Senator, I think is that it's state, federal charter, they're all treated very equally under the CFPB rules.

Right. That's my next question. So how many, what percentage of the financial institutions would be affected by this Bill?

So we have to use some, some kind of national numbers on who would the primary checking accounts. Based on a federal Reserve study, about 24.5% use of credit union as their primary checking account in the state. It's about a 43% break to state versus federal charters. Of 43% of the credit unions in the state are state chartered. So that would leave us in the Low teens of people who primarily use a state chartered checking account as their number one option.

So we kind of layered that over some CFPB studies on who overdrafted in the last year. And we're talking about 2.5 or so percent of the households in the state would be impacted by this Bill if they overdraft. If not, then it's kind of 10 to 15% or so. That use state chartered credit unions.

Another question would be, so if I'm a state chartered credit union and this becomes law, does anything preclude me from then switching to become a federal chartered credit union to avoid this?

No, there's nothing precluding that. It is a process. It is very much a process to flip one's charter, but it is something that has been contemplated and will be contemplated.

All right, thank you. Appreciate that. Where I'm struggling is there's a big. I mean, I think the heart and soul of what you're trying to do is extremely positive. What I'm struggling with is that we're only going after a small percentage of the market, and they're the nonprofit state chartered market. And I'm concerned that some state chartered credit unions would just become federally chartered to avoid having to deal with this regulation.

So as Senator Cavaliere, I'm struggling with this because, you know, traditionally credit unions are nonprofits. They're traditionally the ones reaching out to this cohort of folks. And I don't want to hurt, I don't want to have an unintentional consequence of hurting the very cohort of people that we're trying to bring into finance institutions. So that's what I'm struggling with. So thank you for bringing it forward.

And I would encourage you, I think the Bill is going to get out of Committee today to work with goes to appropes next with the appropriations chair, who clearly understands this very well, and the credit unions to try to figure out something that is a little bit more broader, to affect more of the market and maybe in a fairer way. So anyway, those are my thoughts. So thank you, Mister Bradford.

Thank you. And then we have Vice Chairman Niello.

Thank you very much. Again, nice to hear your voice. Almost back yesterday, she literally couldn't talk. Quick recovery. My concern is exactly the disparity that's created between state chartered and federally chartered. It is a service that people freely sign up for, and it could be, your proposal could be looked at as a restriction to the customer that compromises their ability to use the tool as they might want with regard to the ordering thing.

It doesn't seem to be a clear agreement as to if and how that works. If transactions were taken chronologically, and if the earlier transaction were the larger transaction, one could say it was picked because it was larger, another could say it was picked because it came in first. I don't know which it is because I don't know the data. I don't know where it's coming from. But on the point of nonprofit, by the way, credit unions are nonprofit, and that's a nice thing.

But I think it's important to realize, and I'm only saying this because for profit is looked at in the pejorative, far too often, the amount of gross revenue that ends up on the bottom, bottom line of an enterprise in the United States is Low single digit percentage points. So to the extent that a for profit company is charging significantly more for their product or their service because of their profit, I would submit that that Delta is awfully small, given what the actual net profit is.

That doesn't directly relate to this issue. But I think it's important to point out. But my primary problem with this is it affects half or less of the credit unions and would seem, number one, not to be fair, and number two, would probably, depending upon how significant it was, might drive them to become federally chartered instead. And my understanding is the Federal Government is working on regulations that include this area, so why not wait for them and we can have a level playing field.

And for those reasons, I can't support it.

Thank you, and I will chime in. See no other Member comments. You know, I just want to start off by saying that when I authored this report, never did I think that the report would find what it found. So I was very shocked to see it. And just to be clear, the report asked for a study on fees for all chartered financial institutions, including other institutions that are not credit unions. So I think there was a real surprise.

And part of that surprise didn't come to me just because I serve as the chair of banking and finance, but because for me, I've had a long, decades long relationship with credit unions. My parents are Members there. They opened a bank account for me as a child at a credit union. I am still a credit union customer. And my experience had been different for decades, up until what I saw the report found.

And I say that because I think I understand the challenges that folks are feeling when we have a history of a relationship with an entity that is very different with what the data says. But I also think just because of that relationship and my own experience, which has been a positive experience, doesn't mean that we ignore what the report said. And the report looked at all the banks and it specifically called out credit unions. And that was the shock.

And I think that, you know, Senator Bradford, this isn't easy, but you're the only Senator that is bringing something forward to a problem that was disclosed. So I want to recognize you for doing that and also say that if we don't believe that this is the solution or the right answer, no one else except Senator Bradford has come forward with an idea and an idea that was generated from reading this report and trying to figure out, what do you do?

How do you keep them open but giving them five days before the fee is charged? If that's not the right solution, then what is? Is it three days? Is it more? I don't, I mean, I don't know. And I think that, you know, I also have not seen any proposed amendments to this Bill from the opposition. So I am left really with the one Senator who is addressing a problem, and I think it's a problem that needs to be addressed.

There are 114 credit unions, 35 have 5% or more that are making 5% or more on these fees. The one that made the most, one made $24 million. That hurt to read. For one entity to make $24 million off of this fee fees, that's rough. That was just rough to read. And you're kind of looking at yourself like, what do you do? But it doesn't mean that all 114 are there. So I think that this is what we're trying to grapple with.

Members have brought up the fact that the Federal Government is looking at this, the Federal Government is looking at this. So we're not alone in California trying to address this. The feds also have made it very clear that they're trying to look at it, and it is why we've actually seen change over the last decade. With a lot of financial institutions chartered here or federally, they've changed. You know, they've made changes on their own.

But I want to also recognize that what's being proposed, currently, only two out of the 114 credit unions would have to comply to what's happening at the federal level. With the $10 billion threshold, maybe we'll get another two more. So that would be four out of 114. It still leaves us to think about what do we change, or is there something that needs to be changed for the rest, 110. And I do think all credit unions are different. You know, they're not all the same size.

So this is, you know, a challenging issue. I am supportive of the Bill. I think the analysis lays out a lot of perspectives and a lot of information that I think is really helpful. But I just want to explain also why I am supportive and recognize why this is hard for folks. But in the end, I understand that. While I'm shocked at what the report found, because the report never said, go just look at credit unions. It said look at everything.

I very much have had a great relationship with the credit union that I'm a part of, and it still needs to be addressed. So I encourage Members, you know, the opposition. If there are better solutions, I think bring them forward. But at this moment, Senator Bradford is the only Senator bringing forward a solution to this. So with that, I will allow you to close.

Thank you, Madam Chair. And I want to thank my colleagues for their conversation as regards and their concerns. And I stand here. I didn't come to this issue readily or easily. I chaired banking in the Senate for two years. And this was something we looked at, and not only here for credit unions, but as we dealt with online lending, payday lending, we dealt with all these exorbitant fees that have been charged to consumers and mainly poor consumers. And we move forward in that matter.

I'm a Member of a credit union and I have amazing credit unions in my district. So this is not about hurting or closing credit unions. This Bill simply states, and it doesn't take away overdraft protections. All we're trying to do is limit the number of fees you can charge in a month. That's what we're trying to say. And still, like I say, overdraft can still happen. And we're not even dealing with the dollar amount.

You know, we're just trying to say the frequency and giving that consumer a grace period before that fee is charged. So whether it's five days, as the chair stated, or whether it's three days, we just think consumers sometimes need an opportunity to make corrections. If you're living from paycheck to paycheck. And that's all we're trying to do. We're not trying to hurt these institutions because they wouldn't exist if they weren't needed. Just like we have the online lenders, we have the payday lenders.

They have emerged because our traditional banking institutions have walked away from these customers. My first Bill in the Legislature in 2010 was dealing with unbanked Californians, and I was blown away at the number of unbanked Californians that existed in 2009. The number hasn't decreased. AD has increased since then. And so again, we want institutions like the credit union to be around to provide those services.

But we know our larger financial institutions are charging these fees, too, but they're walking away from many of these customers who need these services. So we're trying to create a balance here. This is what we're hoping to do again, not to eliminate the overdraft protections that consumers need, but limit the number of fees, and we're not even dealing with the amount. I would love to reduce the amount. I would love to say a set dollar fee.

So as this moves forward, forward, if that's the, you know, the compromise that we come to, we'll be willing to cross that bridge at that time. But what we have right now is a Bill that clearly just states no more than three overdrafts in a month and giving that consumer five days to write that make hole on this account or the over overdue charges that they were lacking. So on that note, I would respectfully ask for. I vote.

Thank you. We will go ahead and call the roll. zero, and sorry, the motion is do pass, but first we refer to the Committee on Appropriations. Sorry, let me read that again. Do pass, but first amend and re refer to the Committee on Appropriations.

[Roll Call]

All right, that Bill will be put on call. Thank you.

Thank you.

And with that, we will call absent Members, and we will go through the roll again to do add ons. So we will start with the consent calendar. [Roll Call]

All right, with that, we will go ahead and adjourn it.