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Senate committee advances SB 505 to require two‑factor login authentication for digital wallets
Summary
The Senate Committee on Banking and Financial Institutions voted 5‑0 to pass SB 505, a narrowly focused consumer‑protection bill by Senator Richardson that would require two‑factor or multi‑factor authentication at the login stage for digital wallet providers and money transmitters in California; the bill was referred to Appropriations with an operative date of Jan. 1, 2028.
The Senate Committee on Banking and Financial Institutions on Friday voted 5‑0 to advance Senate Bill 505, a measure from Senator Richardson that would require digital wallet providers and money transmitters operating in California to implement two‑factor or multi‑factor authentication at the user login stage. The committee sent the bill to the Senate Appropriations Committee.
Senator Richardson presented the bill as a narrowly focused consumer‑protection step, saying, “SB 505 is a straightforward consumer protection measure that strengthens the security for Californians who use digital wallets and money transmission services.” He told the committee that “currently today, more than 1,600,000 people in California rely upon digital payment platforms,” and that SB 505 targets authentication at login rather than regulating transactions, fees or data collection. The measure includes an operative date of 01/01/2028 to give businesses time to implement the changes.
Industry witnesses who testified in support described ongoing negotiations over technical definitions. Renee Bayardo said she submitted a letter of support on behalf of Rise Economy. Jamie Minor of the California Blockchain Advocacy Coalition thanked the author and staff for work on remaining definitions and said the group looked forward to continued engagement. Molly Corcoran of Andreessen Horowitz aligned her remarks with the blockchain coalition and praised attention to “self hosted” wallet issues, while Jose Torres of TechNet said his organization was reevaluating its earlier opposition after the recent amendments.
Vice Chair Elo said she would support the bill but warned lawmakers not to be inflexible as technologies evolve, saying, “first of all, nobody should be lulled to sleep that multi multi, that dual authentication, is perfect.” Senator Richardson responded that the bill’s narrow focus and the 2028 effective date were intended to protect consumers now while allowing the Legislature to amend the approach later if better alternatives emerge.
Senator Strickland moved that SB 505 do pass and be re‑referred to the Committee on Appropriations; the committee recorded aye votes from Senators Grayson, Nilo, Cervantes, Richardson and Strickland. The consent calendar, which included SB 546 and SB 700, was also adopted 5‑0. The chair adjourned the committee after announcing the votes.
Next steps: SB 505 is scheduled for consideration by the Senate Appropriations Committee. The committee did not take final action to enact the law; further committee votes and floor action would be required for the bill to become law.
