Sacramento, CA - On Wednesday July 3rd, students, faculty, college representatives, and consumer groups testified before the Senate Banking Committee in support of AB 1162 (Frazier), a bill to protect college students from high fees and poor consumer protections associated with the disbursement of their financial aid through credit balance refunds using debit cards. The legislation failed on a vote of 2 Yes votes, 3 No votes and 4 Non-recorded votes.
Student after student explained that fees and poor consumer protections associated with these contracts resulted in students bearing some costs directly, including per-swipe fees, inactivity fees, PIN based fees, ATM fees and more. It was also noted some of the contracted banks used aggressive marketing strategies to sway students to choose debit cards as their financial aid disbursement choice, with some of those debit cards containing weaker consumer protections.