Declaration of Robert Chestnut (Redacted Version) — In re Bank of America, Case No. 21-MD-02992-GPC-MSB (Dkt. 591-2, S.D. Cal.)

What This Document Is

This is the 11-page Declaration of Robert Chestnut, a BANA regional executive within MBAM Public Sector Banking who oversaw the EDD relationship, dated October 16, 2025 and filed as DX 1 in support of BANA's Motion for Partial Summary Judgment. It is the primary fact declaration establishing the commercial and contractual history of the BANA-EDD prepaid-card relationship.

Factual Summary

Chestnut states EDD first contracted with BANA in May 2010 to distribute unemployment benefits via prepaid card, selected after a competitive RFP process; the relationship was renewed via a second competitive RFP in 2016 (the "EDD Agreement," attached as DX 39). Under the EDD Agreement, BANA issued cards and managed the program only as directed by EDD, and was required to process card issuance/payment files within four hours of receipt. Separately, each cardholder was bound by a Cardholder Agreement (DX 40.A), under which BANA had authority to freeze an account "pending an investigation" if it suspected "irregular, unauthorized, or unlawful activities." As of February 15, 2024, BANA stopped issuing new EDD prepaid cards; all such cards were closed by April 30, 2024, and the EDD Agreement formally expired in July 2025. On financial terms, Chestnut states EDD paid BANA no fees under the EDD Agreement — instead, BANA paid EDD a 50/50 revenue share derived from card-related revenue, which by late May 2021 had required a substantial payment to California (specific figures redacted). Critically for the EMV Chip Class, Chestnut states the EDD RFP and EDD Agreement required cards with "no less than an ISO 7811-compliant high coercivity magnetic strip," that BANA was contractually barred from making "significant change[s]... to the project scope" without EDD's prior written approval, and that his team understood this to mean adding an EMV chip would have required EDD's approval and an executed contract modification.

Key Facts

Declarant: Robert Chestnut, BANA Regional Executive, MBAM Public Sector Banking; declaration dated October 16, 2025.
EDD-BANA relationship began May 2010 (competitive RFP); renewed 2016 (competitive RFP), the current "EDD Agreement" (DX 39).
BANA exited the EDD program February 15-April 30, 2024; the EDD Agreement formally expired July 2025.
Financial structure: EDD paid BANA no direct fees; BANA instead paid EDD a 50/50 revenue share, requiring a substantial payment to California by late May 2021 (figure redacted).
Central EMV Chip Class defense theory: the EDD Agreement itself specified magnetic-stripe cards (ISO 7811-compliant) and barred BANA from unilaterally changing card technology without EDD's approval and a contract modification.
The Cardholder Agreement (DX 40.A) gave BANA express authority to freeze an account "pending an investigation" of suspected irregular/unauthorized/unlawful activity.

Source Caveats

The archived PDF's cover page displays a recurring "REDACTED VERSION OF DOCUMENT SOUGHT TO BE SEALED PURSUANT TO STIPULATED PROTECTIVE ORDER" notice rather than a substantive title; the document date and title above reflect the declaration's own October 16, 2025 execution date and content.
This is a redacted public version; specific revenue-share dollar figures and several operational details are redacted from the extracted text.

Date: 2025-10-17

Cite this document

“Declaration of Robert Chestnut (Redacted Version) — In re Bank of America, Case No. 21-MD-02992-GPC-MSB (Dkt. 591-2).” Original at ecf.casd.uscourts.gov, dated 2025-10-17. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2025-10-17-kyc-company-litigation-845b3d66-1/, SHA-256 845b3d665274d2e61f4abc60cfafbbe9a98d9e5f3efc7f6961dc0ce82e02a85d.

Full text

Case 3:21-md-02992-GPC-MSB Document 591-2 Filed 10/17/25 PageID.40678
Page 1 of 11

DX 1

REDACTED VERSION OF
DOCUMENT SOUGHT TO
BE SEALED PURSUANT TO
STIPULATED
PROTECTIVE ORDER
Case 3:21-md-02992-GPC-MSB Document 591-2 Filed 10/17/25 PageID.40679
Page 2 of 11

I JAMES W. MCGARRY (pro hac vice)
JMcga,:_ry(aJ,!oodwinfaw. com
2 GOODWJN1>ROCTER LLP
100 Northern Avenue
3 Boston, MA 02210
Tel.: +l 617 570 1000
4 Fax: +l 617 523 1231
5 SABRINA M. ROSE-SMITH (pro hac vice)
SRoseSmith(ci),f!oodwin law. com
6 MATTHEWL. RIFFEE (pro hac vice)
MRiffee(ci),goodwinlaw.com
7 GOODWIN PROCTER LLP
1900 N Street, NW
8 Washington, DC 20036
Tel.: + 1 202 346 4000
9 Fax: +1 202 346 4444
Io Attornexs for Defendant
BANK OF AMERICA, N.A.
II

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UNITED STATES DISTRICT COURT
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FOR THE SOUTHERN DISTRICT OF CALIFORNIA
14
SAN DIEGO DIVISION
15

16
IN RE: BANK OF AMERICA Case No. 2 l-MD-02992-GPC-MSB
CALIFORNIA UNEMPLOYMENT
17 BENEFITS LITIGATION DECLARATION OF ROBERT
CHESTNUT IN SUPPORT OF
18 DEFENDANT BANK OF AMERICA,
N.A.'S MOTION FOR PARTIAL
19 SUMMARY JUDGMENT
20
Date: April 17, 2026
21 Time: 1:30 p.m.
Ctrm: 12A - 12th Floor
22 Judge: Hon. Gonzalo P. Curiel
23
FILED PROVISIONALLY UNDER SEAL
24 PURSUANT TO STIPULATED PROTECTIVE
ORDER
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CONFIDENTIAL

I, Robert Chestnut, hereby declare as follows:
2 1. l am employed by Defendant Bank of America, N.A. (BANA), a party
3 to this action, as a regional executive within MBAM Public Sector Banking. I make
4 this declaration based upon personal knowledge and belief, upon BANA' s records
5 maintained in the ordinary course and scope of business, and upon information
6 gathered from other BANA employees within the scope of their responsibilities. If
7 called to testify as to any of the matters set forth in this declaration, I could and would
8 competently testify thereto.
9 2. In my role as a regional executive overseeing client relationships, one
10 of my responsibilities was oversight of the California Employment Development
Il Department (EDD) prepaid card account. My responsibilities included overseeing the
12 management of BANA's relationship with EDD, which involved regularly
13 communicating with members of EDD's leadership team throughout the pandemic
14 on numerous matters relating to the EDD program and BANA's prepaid debit card
15 services, including with regards to the matters discussed in this declaration.
16 3. In my role at BANA, I am familiar with and regularly reviewed the
17 terms of the contract between BANA and EDD (EDD Agreement), including the
18 terms discussed in this declaration and the parties' practice in implementing them.
19 Further, based on my role and experience overseeing BANA's relationship with
20 EDD, I am familiar with the EDD Agreement's revenue share terms and understood
21 BANA's resulting from
22 the pandemic.
23 BANA Served as the Prepaid Card Provider for the
24 EDD UI Benefits Pro~ram.
25 4. BANA's government benefit prepaid debit card program was
26 historically offered to states that otherwise used BANA' s financial services in order
27 to support a unique need ofBANA 's government client, rather than as an independent
28 business unit or consumer product. California is one of only 12 states that previously
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used BANA prepaid cards as an option to distribute unemployment insurance (UI)
2 benefits.
3 5. In May 2010, EDD first contracted with BANA to distribute federal
4 and state unemployment benefits to claimants using BANA's prepaid card services.
5 EDD selected BANA as its prepaid card vendor after a competitive bid process in
6 which EDD issued a Request for Proposal (RFP) specifying the requirements for its
7 prepaid card program, BANA submitted a proposal in response to the RFP, and EDD
8 selected BANA's proposal.
9 6. The agreement between BANA and EDD was renewed for another term
IO beginning in 20 16, after another competitive bid process in which BANA submitted
I1 a proposal in response to an RFP, and EDD selected BANA as its prepaid card
12 vendor. A true and correct copy of the relevant portions of the agreement, together
13 with its amendments (collectively, EDD Agreement), is attached to the Declaration
14 of Laura G. Brys (Brys Dec.) as DX 39. 1
15 7. Under the terms of the EDD Agreement,
16

17 and, if the cardholder did not opt to receive those
18 benefits directly from EDD via check, EDD directed BANA to issue a card and
19 funded the card account at BANA. BANA, as EDD's service provider, only issued
20 initial prepaid cards to individual benefits recipients when instructed to do so by
21 EDD. Under the terms of the EDD Agreement, BANA was required to process EDD
22 card issuance and payment files on a daily basis within four hours of receipt. See DX
23 39 at -2435-40, -2661-66.
24 8. BANA, as a service provider to California, directly issued all cards to
25 recipients as instructed by EDD and managed the card program. In addition to its
26 agreement with EDD, BANA also had an agreement with each cardholder that was
27 provided to each cardholder with the prepaid debit card (the Cardholder Agreement).
28 1
Exhibits to the Brys Declaration shall be referred to as "DX."
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A true and correct copy of the Cardholder Agreement is attached to Brys Dec. as DX
2 40.A.
3 9. Under the express tenns of the Cardholder Agreement, BANA had the
4 authority to freeze a Cardholder' s Account "pending an investigation" if BANA
5 "suspect[s] irregular, unauthorized, or unlawful activities may be involved with"
6 such an Account. DX 40.A at Section 2.
7 10. As of February 15, 2024, BANA no longer issues prepaid cards nor
8 receives funds for cardholders for the EDD UI benefits program. All BANA EDD
9 prepaid cards were closed on or before April 30, 2024, and the EDD Agreement
Io officially expired in July 2025.
11 Financial Terms of the EDD Agreement
12 11. BANA' s Agreement with EDD was, at best,
13

14 letter from
15 BANA to EDD dated May 26, 2021, , is attached
16 to Brys Dec. as DX 55.
17 12. As a result of the pandemic and resulting fraud that plagued the EDD
18

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27 Brys Dec. as DX 154.
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13. Additionally, EDD did not pay fees to BANA under the EDD
2 Agreement. In fact, EDD received additional amounts (i.e., a revenue share) from
3 BANA under the EDD Agreement. The revenue earned was derived from -
4
5 . Under the
6 terms of the EDD Agreement, BANA and EDD split this revenue 50/50. This revenue
7 share arrangement had, by late May 2021, required BANA to pay California a -
8 ncluding
9 of data produced
IO is attached to Brys Dec. as DX
II 170.
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14 15. There were few incidental charges to EDD prepaid cardholders and,
I5 during the pandemic, these fees were often waived by BANA.
16

20 is attached to Brys Dec. as
21 DX70.
22 16. BANA further defrayed service and card costs by
23
24
25 The RFP and EDD Agreement Reguired Magnetic Strip Cards
26 17. Under the terms of EDD's RFP for the UI Program and the EDD
27 Agreement, EDD requested and BANA agreed to issue EDD prepaid cards with "no
28
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less than an ISO 7811-compliant high coercivity magnetic strip." DX 39 at -2462, -
2 2741.
3 18. The terms of the EDD Agreement stated that BANA was not permitted
4 to make any "significant change ... to the project scope," or to amend the EDD
5 Agreement in any manner without the State's prior approval and an executed
6 modification to the EDD Agreement. DX 39 at -2423, -265 1 (Requirements). My
7 team and I understood this to mean that changes to EDD prepaid card technology,
8 such as adding an EMV chip in addition to the ISO 78 11 magstripe, would require
9 EDD approval and an executed modification.
10 19. Between 2015 and January 2020,
I1

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20
21 BANA's Efforts to Work with EDD to Provide Benefits to EDD Cardholders
22 21 . BANA recognized early in March 2020, that with prepaid cards being
23 the primary solution for EDD UI benefits recipients, it would need to scale up card
24 production and determine the best distribution channels for cards in light of the
25 pandemic's devastating impact on the national distribution infrastructure.
26

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2
3
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5 23. Additionally, in March and April 2020, BANA made numerous
6 attempts to engage EDD in order to prevent disruptions to EDD's UT beneficiaries.
7
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18 24. BANA also sought to assist and support EDD's call center. Beginning
19

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26 BANA's Efforts to Work with EDD to Prevent Fraud on the EDD Program
27 25. BANA made numerous attempts to engage EDD in order
28 . Starting in April
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2020, and throughout the pandemic, BANA
2
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17 27. Throughout September and October 2020, BANA and EDD held a
18 number of meetings to specifically discuss
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28 Dec. as DX 53 . BANA and EDD
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3
4

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10 BANA's Communications with EDD Concerning the Claim Fraud Filter
1I 30. On or around September 28, 2020, BANA applied a fraud strategy
12 known as the Claim Fraud Filter (CFF) to freeze certain accounts
13
14

15
16 A true and correct copy of that communication
17 is attached to Brys Dec. as DX 78.
18 32.
19 A true and correct copy of that communication is attached
20 to Brys Dec. as DX 182.
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34. During that same period,
2

6 35. On many occasions, including through virtual meetings, electronic
7 communications, and phone calls,
8

12 I declare under the penalty of perjury that the foregoing is true and correct.
13 Executed on this 16th day of October, 2025.
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