The California Senate Banking and Financial Institutions Committee agenda was packed on Wednesday with some of the most consequential bills facing California’s financial services industry. Included on the docket were Community Reinvestment Act (CRA), fraud, and mortgage forbearance.

“California’s Credit Unions has lobbied heavily on these issues prior to the hearing — and was there in full force to testify on Wednesday,” said Robert Wilson, senior vice president of state advocacy for the league.

Assembly Bills 801 and 2674

Credit unions’ grassroots efforts made a difference. Those who attended the California league’s Government Relations Rally (GRR) over the past two years discussed Assembly Bill 801 (Bonta), the state CRA bill, and Assembly Bill 2674 (Schiavo), a fraud liability bill.

Two wins came prior to Wednesday’s hearing. The first: after stalling in 2025, AB 801 was resurrected earlier this year, but the author amended-out the CRA and changed the bill to a bill requiring a fair lending examination every four years. As noted below, the league is still opposed to the bill in print. Click here to read the league’s opposition letter.

The second and more definitive win was on AB 2674. The author gutted the fraud language out of the bill, and it now has no impact on credit unions or even financial services.

Please read below for more information on the bills that were heard on June 17.

Five Key Issues on the Committee’s Agenda

AB 801 (Bonta) — Nondiscrimination

• As mentioned above, this bill would require the California Department of Financial Protection and Innovation (DFPI) to conduct a fair lending examination of banks, credit unions, and other regulated lenders at least once every four years. The league offered lead testimony in opposition to the bill on Wednesday. The author made commitments to limit the bill to mortgages only, improve confidentiality of the examination, and work with the league on frequency of the examinations or the need for a stand-alone examination.

AB 871 (Stefani) — Elder Financial Abuse Reporting

• This bill would modify requirements for mandated reporters of suspected financial abuse of elders and dependent adults. The league’s position is neutral.

AB 1278 (Harabedian) — Hazard Insurance Proceeds

• This bill would addresses whether mortgage borrowers receive interest on insurance proceeds held following property damage claims. The league was able to secure amendments that would allow for the insurance proceeds to be paid via ACH or ETF.

AB 1842 (Harabedian) — California Emergency Mortgage Relief Act

• The bill would set up a standard mortgage forbearance framework for states of emergency, modeled after last year’s AB 238. The author agreed to numerous amendments on Wednesday. Some of the notable amendments include: ensuring only a national state of emergency would trigger the bill; removing provision on borrower approval of a transfer; and removing data reporting to the DFPI. These amendments, coupled with the previous amendments that removed the private right of action, have moved the lending coalition to neutral on the bill.

AB 1847 (Harabedian) — Wildfire Mortgage Forbearance

• This bill would extend mortgage forbearance rights for up to 36 months for borrowers affected by the January 2025 wildfire disasters and related emergency declarations. The league spent the last week in heavy negotiations on the bill. In committee on Wednesday, the author agreed to limit the timeframe to 24 months, and agreements were made to require proof of hardship, habitability, and a good faith effort to start the rebuild. The league remains opposed to the bill in print but looks forward to a continuing conversation with the author’s office.