Bill > AB493

This bill addresses how financial institutions handle hazard insurance proceeds for residential properties (one to four-family homes) in California. The bill requires financial institutions to pay at least 2% simple interest annually on hazard insurance proceeds held in a loss draft account while property is being rebuilt or repaired, and prohibits charging any fees that would reduce the effective interest rate below 2%. The legislation allows financial institutions to deposit these insurance proceeds in interest-bearing accounts at federally insured institutions, federal home loan banks, or similar government-sponsored enterprises. The bill defines "financial institution" broadly to include banks, savings and loan associations, credit unions, and other mortgage lenders. A key exception exists for insurance proceeds that regulatory authorities require to be held in non-interest-bearing accounts. The urgency of this bill stems from protecting wildfire victims and ensuring they receive fair treatment during the rebuilding process, with the law designed to take immediate effect to provide critical safeguards for property owners waiting to reconstruct their homes after a loss.

Budget and Finance, Business and Industry, Justice

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260AB493