Bill > AB801

This bill establishes the California Community Reinvestment Act, which requires financial institutions (called "covered financial institutions") to meet the financial service needs of communities, particularly low- and moderate-income communities and communities of color. The bill mandates that the Commissioner of Financial Protection and Innovation assess each covered financial institution's performance at least every three years, assigning one of five ratings from "outstanding" to "substantial noncompliance" based on factors like lending practices, branch distribution, community investment, and efforts to serve underserved populations. Financial institutions with poor ratings ("needs to improve" or "substantial noncompliance") will be prohibited from receiving state funds or contracts and must submit improvement plans. The bill also requires a disparity study by 2027 to identify financial policies that may have discriminatory effects, and establishes a Community Reinvestment Fund to support administration of the act. The legislation is partly motivated by historical discriminatory practices like redlining and segregation that have systematically limited financial opportunities for communities of color in California, and aims to create more equitable access to financial services by holding institutions accountable for serving all communities fairly.

Budget and Finance, Business and Industry

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260AB801