Next City – October 12, 2021. Out of eight million unbanked households across the country, one million are in California alone. The state is now looking to address this by taking a page out of the former USPS savings account playbook.
Assembly Bill 1177, passed in September and signed by Governor Gavin Newsom last week, envisions a state-branded bank account service, dubbed “CalAccount.” The state would set the parameters for each account, including debit card and ATM access, no overdraft fees, no minimum balance requirements, online bill pay, and direct deposit capability. The state would also serve as the public face and marketing force behind the program — there would be CalAccount branding on debit cards, for example. I wrote about the details of this program over the summer.
Supporters bill CalAccount as a “public option” for banking — but behind the scenes, like the former USPS program, the accounts would still be held at private banks. The idea is to have the state’s seal of approval and its power as an intermediary to ensure consistency and transparency for CalAccount holders, who wouldn’t have to worry, for example, that features like no fees or no minimum balance will disappear with little notice and no say from consumers.
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