(a) (1) Notwithstanding any other law, if child support payments are directly deposited to an account of the recipient’s choice, as authorized under the federal Electronic Fund Transfer Act (EFTA) (15 U.S.C. § 1693 et seq.), the payments may only be deposited to an account that meets the requirements of a qualifying account, as defined in paragraph (2), for deposit of child support payments.

(2) For purposes of this section, a “qualifying account” is one of the following:

Terms Used In California Family Code 17325

  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Federal Deposit Insurance Corporation: A government corporation that insures the deposits of all national and state banks that are members of the Federal Reserve System. Source: OCC
  • National Bank: A bank that is subject to the supervision of the Comptroller of the Currency. The Office of the Comptroller of the Currency is a bureau of the U.S. Treasury Department. A national bank can be recognized because it must have "national" or "national association" in its name. Source: OCC
  • National Credit Union Administration: The federal regulatory agency that charters and supervises federal credit unions. (NCUA also administers the National Credit Union Share Insurance Fund, which insures the deposits of federal credit unions.) Source: OCC
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Person: includes a natural person, firm, association, organization, partnership, business trust, corporation, limited liability company, or public entity. See California Family Code 105
  • State: means a state of the United States, the District of Columbia, or a commonwealth, territory, or insular possession subject to the jurisdiction of the United States. See California Family Code 145
  • Support: refers to a support obligation owing on behalf of a child, spouse, or family, or an amount owing pursuant to Section 17402. See California Family Code 150
  • Truth in Lending Act: The Truth in Lending Act is a federal law that requires lenders to provide standardized information so that borrowers can compare loan terms. In general, lenders must provide information on Source: OCC

(A) A demand deposit or savings account at an insured depository financial institution that is offered directly by the insured depository financial institution on its internet website or through its branches and that is in the name of the person entitled to the receipt of child support payments.

(B) A prepaid account, or a demand deposit or savings account offered by, or through, an entity other than an insured depository financial institution, that meets all of the following:

(i) The account is held at an insured depository financial institution.

(ii) The account is set up to meet the requirements for direct or passthrough deposit or share insurance payable to the person entitled to the receipt of child support payments by the Federal Deposit Insurance Corporation in accordance with Part 330 of Title 12 of the Code of Federal Regulations, or the National Credit Union Share Insurance Fund in accordance with Part 745 of Title 12 of the Code of Federal Regulations.

(iii) The account is not attached to a credit or overdraft feature that is automatically repaid from the account unless the credit or overdraft feature has no fee, charge, or cost, whether direct, required, voluntary, or involuntary, or the credit or overdraft feature complies with the requirements for credit offered in connection with a prepaid account under the federal Truth in Lending Act (15 U.S.C. § 1601 et seq.) and its implementing regulations.

(iv) The account complies with all of the requirements, and provides the holder of the account with all of the consumer protections, that apply to an account under the rules implementing the EFTA.

(3) A person or entity that is not an insured depository financial institution that offers, maintains, or manages an account that does not comply with paragraph (2) shall not solicit, accept, or facilitate the direct deposit of child support payments to the account.

(b) For purposes of this section, the department shall not be held liable for authorizing a direct deposit of child support payments into an account designated by the recipient that does not comply with paragraph (2) of subdivision (a). The department has no obligation to determine whether an account at the insured depository financial institution of the recipient’s choice is a qualifying account as described in subdivision (a).

(c) For the purposes of this section, the following definitions shall apply:

(1) “Insured depository financial institution” means a state or national bank, a state or federal savings and loan association, a mutual savings bank, or a state or federal credit union that holds deposits insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration.

(2) “Prepaid account” has the same meaning as that term is defined in regulations under the EFTA.

(Amended by Stats. 2021, Ch. 546, Sec. 1. (SB 497) Effective January 1, 2022.)

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