California unemployment: State lawmakers propose EDD reform bills

SACRAMENTO, Calif. (KGO) -- State lawmakers have released a package of new legislation aimed at reforming the beleaguered California Employment Development Department.

In a Zoom conference on Thursday, a group of Assemblymembers detailed their experiences helping constituents navigate a host of EDD problems, and expressed frustration with the EDD's failure to serve the people of California.

Among their criticisms were widespread fraud, including fraud conducted from within prisons and jails, EDD partner Bank of America's limiting benefit delivery to only their debit cards, lack of access to information in languages other than English or Spanish, claimants' inability to get help or remedy errors on their claims, and EDD's lack of oversight or preparedness for a financial downturn and surge in claims -- despite having gone through the Great Recession over a decade ago.

The lawmakers reviewed their proposed legislation, which will be heard in policy committees this spring.

WATCH: Bank of America addresses freezing accounts, fraud

Representatives from EDD and Bank of America addressed a State Assembly hearing to shed light on the scope of fraud within California's unemployment program.

Assembly Bill 74: From Assemblywoman Lorena Gonzalez (D-San Diego). Provides claimants with the option to receive their unemployment payments (as well as disability and paid family leave) via direct deposit. Currently, California is only one of three states that do not provide direct deposit; instead, the state is contracted with Bank of America to send payments to a debit card. However, complaints have mounted that Bank of America has failed to protect its cardholders, leaving them vulnerable to fraud, and to having their accounts frozen by the bank if they detect suspicious activity -- leaving cardholders without access to their funds as they try to navigate the bank's appeals process.

RELATED: New EDD director vows changes after audits reveal disastrous mishaps

Assembly Bill 400: From Assemblymember Cottie Petrie-Norris (D-Laguna Beach). Creates the Unemployment Insurance Oversight Advisory Board under the Labor and Workforce Development Agency. This board would regularly review the EDD's operations and make recommendations to the department and to lawmakers.

Assembly Bill 110: From Assemblymember Cottie Petrie-Norris (D-Laguna Beach). Requires EDD to cross-check their claims against incarceration records to prevent paying inmates making false claims.

WATCH: EDD implemented anti-fraud measures too late, says state auditor

A second report by the California State Auditor's office reveals poor management of federal funds left the door wide open to fraud.

Assembly Bill 401: From Assemblymember David Chiu (D-San Francisco). Takes steps toward making the EDD system more accessible to those who don't speak English. The EDD does provide some forms and services in Spanish, but has virtually no resources for those who speak other languages, making benefits inaccessible to 2.4 million Californians.

Assembly Bill 402: From Assemblymember Buffy Wicks (D-Oakland). Establishes an Office of the Claimant Advocate within the EDD, and a "Claimant's Bill of Rights" so that those filing claims with the EDD can receive support and express grievances.

Assembly Bill 397: From Assemblymember Chad Mayes (I-Yucca Valley). Allows claimants to fix mistakes on their applications, which have been called "convoluted" and "confusing," instead of automatically locking them out. The EDD would be required to contact the claimant with a notice of what was flagged on their claim, and allow them to fix it.

Assembly Bill 19: From Assemblymember Miguel Santiago (D-Los Angeles). Provides extended unemployment benefits to Californians whose claims have been exhausted, even if the federal government does not intervene with another extension.

WATCH: Old computer systems add to EDD delays

EDD's computer systems are outdated, with '80s-era systems run on an ancient computer language. It's added to the delays and frustrations many out-of-work Californians are feeling as they try to claim their benefits.

Assembly Bill 56: From Assemblymember Rudy Salas (D-Bakersfield). Forces the EDD to accept and implement reforms suggested by the recent State Auditor's report on the EDD, ensuring the EDD creates a plan to handle other surges of unemployment claims in the future.

Assemblymembers have also prioritized a $55 million budget proposal to fund a task force in partnership with local and state law enforcement agencies to combat EDD fraud.

Take a look at more stories and videos by Michael Finney and 7 On Your Side.

Have a question for Michael and the 7 On Your Side team? Fill out the form HERE!

7OYS's consumer hotline is a free consumer mediation service for those in the San Francisco Bay Area. We assist individuals with consumer-related issues; we cannot assist on cases between businesses, or cases involving family law, criminal matters, landlord/tenant disputes, labor issues, or medical issues. Please review our FAQ here. As a part of our process in assisting you, it is necessary that we contact the company / agency you are writing about. If you do not wish us to contact them, please let us know right away, as it will affect our ability to work on your case.

App users: For a better experience, click here to view the full map in a new window