SACRAMENTO, Calif. — California is one of only three states that doesn’t allow direct deposit of unemployment benefits, according to Cal Matters. Monday, Assemblywoman Lorena Gonzalez (D-San Diego) introduced AB74, a bill that she hopes will change that.
She's also hopeful that it will solve some of the widely reported problems with debit cards distributed by Bank of America for the Employment Development Department while making it simpler for people receiving unemployment benefits to handle their finances.
"There’s much less likely an avenue for fraud when someone can say as they’re applying, 'Yes, this is where you can send my money,'" says Gonzalez. "It doesn’t come in the mail, they don’t have to worry about something getting lost. It just goes directly into their account. It’s something we’re used to having, and something that makes sense to a vast majority of working people in California."
The Assemblywoman says direct deposit will let most people pay bills the way they’re used to, rather than constantly having to deal with ATMs. With funds going directly into a recipient's bank account, daily withdrawal caps will be a thing of the past as well, which can be problematic when trying to pay bigger bills like rent.
"This will solve it. I mean, you can check and just say, “I want my entire check to come into my own bank account and operate in a way that I’m used to operating,” says Gonzalez.
So, why hasn't California already moved to direct deposit? Gonzalez believes it started when food assistance programs were transitioned to EBT cards. Many recipients didn't have bank accounts, and the cards made it simple to buy groceries without having to deal with cashing checks. She says things are different for unemployment recipients.
"The vast majority, I’m going to say, have a bank account because they’re used to receiving a paycheck. They’re used to receiving direct deposit—one of these ways in which they deal with their own bank. So, they don’t have those same barriers," said the assemblywoman.
The bill also would make it possible for recipients of State Disability Insurance and Paid Family Leave to choose direct deposit. Those are handled by the EDD, as well.
With bills often taking a year or more to get through the legislative process in California, Gonzalez is hoping to speed things up by getting Governor Newsom to handle it administratively.
"We will still move the bill because we want it to be a right that’s preserved in law," she says. "What we’re hopeful to do is really bang the drum on this by introducing legislation and getting a ton of co-authors and really pushing the administration to move quicker than that."
