The votes helps clear a path for greater economic inclusion.

In a major step forward for economic equity in California, AB 1365 —legislation that would create the nation’s first state-backed, fee- and penalty-free basic banking program — advanced through two key Assembly committees this week.

The CalAccount bill, authored by Assemblymember Robert Garcia (D-50), offers a solution for Californians excluded from traditional banking or forced to rely on costly alternatives like check cashers and payday lenders.

Rise Economy CEO Paulina Gonzalez-Brito delivered testimony in the second hearing on Wednesday in front of the State Assembly Committee on Labor and Employment, urging lawmakers to support the bill as a critical tool for closing the racial wealth gap.

“Too often, bank fees and alternative financial services strip families of their hard-earned income,” said Gonzalez-Brito, who also served on the CalAccount Blue Ribbon Commission that oversaw the CalAccount feasibility study. “The most financially vulnerable households in California spend an average of 16 percent of their income on interest and fees. That’s like half a month’s rent.”

CalAccount would ensure that every Californian has access to a secure, no-fee banking option. For survivors of gender-based violence, for workers earning low wages, and for communities historically excluded from banking, the legislation offers a foundation for rebuilding financial lives. CalAccount would also eliminate overdraft fees, monthly maintenance fees, and other costs that disproportionately burden Black, brown and immigrant households. In its first year alone, the program could generate a projected $45 million boost to the state’s economy—money that stays in communities instead of being siphoned off by financial institutions.

“At the federal level, Congress and the Administration are rolling back consumer protections, including limiting overdraft fees,” Gonzalez-Brito said. “In this climate, it is more important than ever that the state take the lead on offering no-cost, fee-free accounts for all Californians who need an account that will reliably stay fee-free.”