Treasurer Chiang’s 2017 Legislative Agenda
Fighting bank fraud, easing burdens on indebted student loan borrowers and shining light on local government bond sales top State Treasurer John Chiang’s 2017 legislative agenda.
The Treasurer is sponsoring six bills in the state Senate and Assembly. They are aimed at helping consumers, taxpayers, college students and the disabled.
"These proposals all reflect my commitment to government transparency, educational opportunity, economic fairness and equal treatment under law," said Chiang.
Here is a rundown on the Treasurer’s legislation:
SB 33 by Sen. Bill Dodd (D-Napa) - The high-profile measure stems from the 2016 Wells Fargo Bank scandal.
Federal regulators took enforcement actions after revelations that at least 3,500 bank employees opened 1.5 million bogus bank accounts and 565,000 credit card accounts without the knowledge or consent of customers.
At the same time, Treasurer Chiang put Wells Fargo on notice that he does not tolerate bad corporate behavior. He suspended the firm for at least a year from transacting lucrative business with his office.
Both actions sought to protect low-wage workers and other vulnerable people, including the elderly, non-English speakers and students, targeted by Wells Fargo.
Injured account holders, who tried to file lawsuits against Wells Fargo for fraud or identity theft, discovered access to the courts blocked. Fine-print in consumer contracts they previously signed required them to submit all complaints to binding, private arbitration by judges, who often are biased toward the company that hires them.
SB 33 would upend this unjust contractual relationship. The bill guarantees that a corporation cannot force clients to give up their rights to sue in court when their bank or any other business, directly defrauds them.
SB 674 by Sen. Benjamin Allen (D-Santa Monica) – California college graduates are burdened by tens of thousands of dollars in burgeoning student-loan obligations. They are saddled with an estimated $20 billion in private student loan debt, on top of $100 billion in federal debt.
Treasurer Chiang, who chairs the California Educational Facilities Authority, wants to ease that load. He is sponsoring legislation to allow the authority to partner with local lending institutions to refinance and consolidate student loans by providing a loan-loss reserve. The reserve would protect lenders, who refinance loans, from defaults.
SB 450 by Sen. Robert M. Hertzberg (D-Van Nuys) – Requires local governments to issue “Truth in Public Borrowing” statements before taking any action to issue long-term debt.
The statement would be similar to federally required disclosures showing all costs over the life of home mortgage loans. The goal is to help taxpayers to better understand the full cost of long-term municipal borrowing.
AB 1253 by Asm. Ken Cooley (D-Rancho Cordova) – Creates new, more specific duties for local bond oversight committees to verify proceeds from both local and state education bond sales are in line with what voters originally approved. Current oversight statutes are vague, and this bill seeks to clarify the roles and responsibilities of local oversight committees.
The goal is to ensure that bond proceeds are spent efficiently, responsibly and in accordance with what voters originally approved.
SB 218 by Sen. Bill Dodd (D-Napa) – Modifies 2013 legislation that created tax-free savings accounts for disabled people. The Achieving a Better Life Experience (CalABLE) Act allows the disabled to save money for health care, education and other needs without fear of losing government benefits. This bill encourages better participation by specifically prohibiting the state from recovering payments made under the Medi-Cal program.
AB 384 by Asm. Jacqui Irwin (D-Thousand Oaks) – Removes a state residency requirement to allow out-of-state disabled people to open and contribute to California CalABLE accounts.
Participation by nonresidents increases the assets of the California fund and should lead to lower fees for account holders.