On Tuesday morning (September 1), the California State Legislature adjourned its 2025-56 legislative session. The session was expected to gavel-down at midnight on August 31, but legislators had to come back on Tuesday for the final votes on last-minute budget related deals.

During the final days of session, California’s Credit Unions’ team stopped Assembly Bill 1018, a problematic automated decision systems (ADS) bill, and worked to ensure no new threats to credit unions would get through. The league also prevented an attempt by public banking advocates to slip a $4 million budget allocation into a budget bill to establish a state bank.

While the league’s request for parity on the digital software products and services (SaaS) tax issue did not make the final cut for the budget trailer bills, California’s Credit Unions’ work is not over. The league is actively engaged in the regulatory process as it works on introducing a legislative fix next year.

Bills Defeated and Bills Headed to Governor

Overall, the California league was very successful in preventing numerous bills over the two-year session that would have been detrimental to credit unions.

You can view major victories below (an asterisk by the bill indicates it only applies to state-chartered credit unions, while all other bills apply to both state and federally chartered credit unions). The league:

• Defeated the state Community Reinvestment Act (CRA) bill. The bill, Assembly Bill 801*, would have imposed a state CRA mandate on state-chartered credit unions, creating significant new regulatory costs estimated at $50,000 to more than $1 million annually.
• Stopped a problematic elder financial abuse bill — originally Assembly Bill 2674, which was later gutted and amended into a different subject.
• Stopped Assembly Bill 1018, a deeply problematic bill that would have created the nation’s most expansive regulations on automated decision-making systems. Before the bill was stopped, the author adopted significant amendments to build support, but the league and other opponents still successfully defeated it.
• Stopped a digital asset bill, which would have created fragmented regulations and imposed new requirements (Assembly Bill 2285*).
• Amended mortgage forbearance bills (Assembly Bill 1842 and Assembly Bill 1847) into practical and workable solutions to help fire victims.
• Stopped a bill that would have restricted a credit union’s ability to serve educators on school campuses (Assembly Bill 2197).
• Stopped the State Bank Act (Assembly Bill 2243).

On the general business front, California’s Credit Unions watered-down many bad policies that were completely unworkable as introduced. While the league remain opposed to some bills that passed, most are in better shape than before.

A few bills of note that are headed to the governor include:

• Senate Bill 947 would have impacted almost every aspect of the management, hiring, and firing of a workforce. It was narrowed to focus on high-impact disciplinary, termination, and deactivation decisions, giving employers greater flexibility to use automated decision systems (ADS) for routine workforce management.
• Assembly Bill 1331 would have banned surveillance in many areas of the workplace. It was narrowed-down to bathrooms with certain exceptions.
• Assembly Bill 2599 would require businesses with more than $100 million in annual worldwide gross receipts to search their records and disclose under penalty of perjury any historical ties to slavery-related commerce, with the information made publicly available.

September 30 Deadline for Bill Signatures

The governor has until September 30 to sign or veto all bills. California’s Credit Unions will send a full legislative recap to credit unions for the 2025-26 session after the deadline in early October.

Please be on the lookout for additional communications in the coming months, including SaaS regulatory updates and compliance bulletins. If you have any questions, please reach out to Robert Wilson.

A special “thank you” goes out to all the advocates who engaged with lawmakers this year to help protect credit unions. Our collective voices and cooperative nature truly make a difference!