Lorena Gonzalez Announces Bill to Require a Direct Deposit Option for Unemployment Benefits

Thursday, December 3, 2020

SACRAMENTO – (Thursday, Dec. 3, 2020) – From fraudulent transactions to card freezes and withdrawal limits, debit cards have caused a range of issues for Californians who are without work and in need of crucial unemployment benefits. Today, State Assemblywoman Lorena Gonzalez (D-San Diego) is announcing she will introduce legislation on Monday, December 7th—the first day of the 2021-2022 legislative session—that requires a direct deposit option be made available for unemployment insurance and other income replacement programs.

“After too many Californians have already waited months for their unemployment benefits to be approved, widespread problems with debit cards have prevented countless families from putting food on the table or paying the bills,” Assemblywoman Gonzalez said. “Making a direct deposit option available is a simple, commonsense solution to so many challenges we know California residents are facing.”

California is one of three states that does not allow the option for direct deposit of unemployment benefits, according to a report by CalMatters. Instead, residents receive benefits either by paper check or through a Bank of America debit card. The Employment Development Department (EDD) that processes and oversees unemployment claims in the state has no direct access to debit funds on any accounts, and no ability to resolve fraud issues for individual cards.

The Bank of America debit cards issued do not use chip technology, which experts say makes them more susceptible to scammers who can “skim” data from the magnetic strips. Direct deposit to an existing bank account would provide Californians their benefit payments quickly and securely, with less opportunity for scammers to access the money.

Additionally, only up to $1,000 can be withdrawn from the debit cards per day. For Californians who have seen delays in receiving their benefits, this creates an additional hurdle to paying necessary expenses like rent. Debit cards also run the risk of being stolen from the mail or mailed to the wrong address, and can be subject to additional fees.

For questions to schedule an interview with Assemblywoman Gonzalez, contact Sami Gallegos: samantha.gallegos@asm.ca.gov