(a) The Commissioner of Business Oversight shall administer an application process for grants of up to one hundred thousand dollars ($100,000) per applicant from the Financial Empowerment Fund or shall contract with an independent third party to do so on the department’s behalf. The commissioner, or the independent third party designated by the commissioner, may award up to one million dollars ($1,000,000) in grant moneys per fiscal year, beginning in the 2020–2021 fiscal year. To be eligible for selection by the department to administer the grant program, an independent third party must cap its administrative fees at no more than 15 percent of the grant moneys it administers on the department’s behalf.
(b) An applicant shall apply to the commissioner or to an independent third party designated by the commissioner for a grant in a form and manner prescribed by the commissioner or the independent third party. To be eligible for a grant, an applicant shall meet both of the following criteria:
(1) The organization is exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code and is organized and operated exclusively for one or more of the purposes described in Section 501(c)(3) of the Internal Revenue Code.
(2) No part of the net earnings of the organization shall inure to the benefit of a private shareholder or individual.
(c) A grantee shall only use grant moneys for the following financial education and financial empowerment programs and services for at-risk populations:
(1) Designing, developing, or offering, free of charge to consumers, classroom- or web-based financial education and empowerment content intended to help unbanked and underbanked consumers achieve, identify, and access lower cost financial products and services, establish or improve their credit, increase their savings, or lower their debt.
(2) Providing individualized, free financial coaching to unbanked and underbanked consumers.
(3) Designing, developing, or offering, free of charge to consumers, a financial product or service intended to help unbanked and underbanked consumers identify and access responsible financial products and financial services, establish or improve their credit, increase their savings, or lower their debt.
(d) A grantee shall use no more than 15 percent of its grant to cover its administrative costs. Failure to comply with this requirement shall render the organization ineligible for grant funding during the subsequent fiscal year.
(e) Every project funded with a grant from the Financial Empowerment Fund shall meet all of the following criteria:
(1) Promote and enhance the economic security of consumers.
(2) Adhere to the five principles of effective financial education described in the June 2017 report, “Effective financial education: Five principles and how to use them,” issued by the federal Consumer Financial Protection Bureau.
(3) Include one or more specific outcome targets.
(4) Include an evaluation component designed to measure and document the extent to which the project achieves its intended outcomes and increases consumers’ financial well-being.
(f) Each grantee shall submit a report, in a form and by a date acceptable to the Commissioner of Business Oversight, documenting the specific uses to which grant funds were allocated, documenting the number of individuals aided through use of the funds, providing quantitative results regarding the impact of grant funding, and including any other information requested by the commissioner. Failure to submit a report shall render the organization ineligible for grant funding during the subsequent fiscal year.
(g) On or before December 31, 2021, and at least once annually thereafter, the department shall post on its internet website a summary of the information received from grantees pursuant to subdivision (f).
(Added by Stats. 2019, Ch. 478, Sec. 1. (SB 455) Effective January 1, 2020. Repealed as of January 1, 2025, pursuant to Section 24002.)