CA SB497

Redefines "qualifying account" for direct deposits of unemployment benefits, child support payments, and public assistance (CalWORKs) to include prepaid accounts and accounts offered by non-bank entities, provided they meet federal FDIC/NCUA insurance requirements and consumer protections under the Electronic Fund Transfer Act.

Allows credit or overdraft features on qualifying accounts only if they have no fees or charges, or comply with federal Truth in Lending Act requirements for prepaid account credit.

Prohibits non-bank entities from soliciting or facilitating direct deposits to accounts that do not meet qualifying account standards.

Requires the Employment Development Department to offer direct deposit options for disability and family temporary disability insurance benefits beginning January 1, 2024, with payments deposited only to qualifying accounts.

Authorizes the State Department of Social Services to implement these provisions through all-county letters or written instructions (with force and effect of regulations) to be issued no later than October 1, 2022, and provides reimbursement for state-mandated local program costs.