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    AB-493
    Housing & Homelessness

    Mortgages: hazard insurance proceeds.

    Engrossed
    CA
    ∙
    2025-2026 Regular Session
    0
    0
    Track
    Track

    Key Takeaways

    • Requires financial institutions to pay 2% annual interest on insurance payouts held during home repairs.
    • Prohibits banks from charging fees that would reduce insurance payout interest below 2% annually.
    • Takes effect immediately to protect wildfire victims receiving insurance payments.

    Summary

    Assembly Member Harabedian's mortgage insurance reform measure requires financial institutions to pay 2% annual interest on hazard insurance proceeds held in loss draft accounts for property rebuilding or repairs. The legislation applies to loans secured by one- to four-family residences in California, with interest accruing annually or upon account termination.

    The bill permits financial institutions to deposit these insurance proceeds in interest-bearing accounts at federally insured depositories, federal home loan banks, federal reserve banks, or similar government-sponsored enterprises. Financial institutions cannot impose fees or charges that would reduce the effective interest rate below 2% per annum. The provisions exclude hazard insurance proceeds that regulatory authorities require non-bank institutions to place in non-interest-bearing demand trust accounts.

    For existing loss draft accounts, interest accrual begins upon the bill's immediate enactment as an urgency statute. The measure amends the California Residential Mortgage Lending Act to align trust account requirements with these new interest payment obligations while maintaining existing protections that prevent commingling of funds and ensure proper account management.

    Key Dates

    Next Step
    Referred to the Senate Standing Committee on Appropriations
    Next Step
    Senate Committee
    Referred to the Senate Standing Committee on Appropriations
    Hearing has not been scheduled yet
    Senate Judiciary Hearing
    Senate Committee
    Senate Judiciary Hearing
    Do pass as amended, but first amend, and re-refer to the Committee on [Appropriations] with the recommendation: To Consent Calendar
    Senate Banking and Financial Institutions Hearing
    Senate Committee
    Senate Banking and Financial Institutions Hearing
    Do pass, but first be re-referred to the Committee on [Judiciary]
    Vote on Assembly Floor
    Assembly Floor
    Vote on Assembly Floor
    AB 493 Harabedian Third Reading Urgency
    Assembly Appropriations Hearing
    Assembly Committee
    Assembly Appropriations Hearing
    Do pass as amended
    Assembly Banking And Finance Hearing
    Assembly Committee
    Assembly Banking And Finance Hearing
    Do pass and be re-referred to the Committee on [Appropriations]
    Introduced
    Assembly Floor
    Introduced
    Read first time. To print.

    Contacts

    Profile
    Anna CaballeroD
    Senator
    Committee Member
    Not Contacted
    Not Contacted
    Profile
    Tim GraysonD
    Senator
    Committee Member
    Not Contacted
    Not Contacted
    Profile
    Megan DahleR
    Senator
    Committee Member
    Not Contacted
    Not Contacted
    Profile
    Kelly SeyartoR
    Senator
    Committee Member
    Not Contacted
    Not Contacted
    Profile
    Aisha WahabD
    Senator
    Committee Member
    Not Contacted
    Not Contacted
    0 of 9 row(s) selected.
    Page 1 of 2
    Select All Legislators
    Profile
    Anna CaballeroD
    Senator
    Committee Member
    Profile
    Tim GraysonD
    Senator
    Committee Member
    Profile
    Megan DahleR
    Senator
    Committee Member
    Profile
    Kelly SeyartoR
    Senator
    Committee Member
    Profile
    Aisha WahabD
    Senator
    Committee Member
    Profile
    John HarabedianD
    Assemblymember
    Bill Author
    Profile
    Christopher CabaldonD
    Senator
    Committee Member
    Profile
    Sasha Renee PerezD
    Senator
    Bill Author
    Profile
    Laura RichardsonD
    Senator
    Committee Member

    Get Involved

    Act Now!

    Email the authors or create an email template to send to all relevant legislators.

    Introduced By

    John Harabedian
    John HarabedianD
    California State Assembly Member
    Co-Author
    Sasha Renee Perez
    Sasha Renee PerezD
    California State Senator
    40% progression
    Bill has passed all readings in its first house and is ready to move to the other house (4/1/2025)

    Latest Voting History

    View History
    June 24, 2025
    PASS
    Senate Committee
    Senate Judiciary Hearing
    AyesNoesNVRTotalResult
    120113PASS

    Key Takeaways

    • Requires financial institutions to pay 2% annual interest on insurance payouts held during home repairs.
    • Prohibits banks from charging fees that would reduce insurance payout interest below 2% annually.
    • Takes effect immediately to protect wildfire victims receiving insurance payments.

    Get Involved

    Act Now!

    Email the authors or create an email template to send to all relevant legislators.

    Introduced By

    John Harabedian
    John HarabedianD
    California State Assembly Member
    Co-Author
    Sasha Renee Perez
    Sasha Renee PerezD
    California State Senator

    Summary

    Assembly Member Harabedian's mortgage insurance reform measure requires financial institutions to pay 2% annual interest on hazard insurance proceeds held in loss draft accounts for property rebuilding or repairs. The legislation applies to loans secured by one- to four-family residences in California, with interest accruing annually or upon account termination.

    The bill permits financial institutions to deposit these insurance proceeds in interest-bearing accounts at federally insured depositories, federal home loan banks, federal reserve banks, or similar government-sponsored enterprises. Financial institutions cannot impose fees or charges that would reduce the effective interest rate below 2% per annum. The provisions exclude hazard insurance proceeds that regulatory authorities require non-bank institutions to place in non-interest-bearing demand trust accounts.

    For existing loss draft accounts, interest accrual begins upon the bill's immediate enactment as an urgency statute. The measure amends the California Residential Mortgage Lending Act to align trust account requirements with these new interest payment obligations while maintaining existing protections that prevent commingling of funds and ensure proper account management.

    40% progression
    Bill has passed all readings in its first house and is ready to move to the other house (4/1/2025)

    Key Dates

    Next Step
    Referred to the Senate Standing Committee on Appropriations
    Next Step
    Senate Committee
    Referred to the Senate Standing Committee on Appropriations
    Hearing has not been scheduled yet
    Senate Judiciary Hearing
    Senate Committee
    Senate Judiciary Hearing
    Do pass as amended, but first amend, and re-refer to the Committee on [Appropriations] with the recommendation: To Consent Calendar
    Senate Banking and Financial Institutions Hearing
    Senate Committee
    Senate Banking and Financial Institutions Hearing
    Do pass, but first be re-referred to the Committee on [Judiciary]
    Vote on Assembly Floor
    Assembly Floor
    Vote on Assembly Floor
    AB 493 Harabedian Third Reading Urgency
    Assembly Appropriations Hearing
    Assembly Committee
    Assembly Appropriations Hearing
    Do pass as amended
    Assembly Banking And Finance Hearing
    Assembly Committee
    Assembly Banking And Finance Hearing
    Do pass and be re-referred to the Committee on [Appropriations]
    Introduced
    Assembly Floor
    Introduced
    Read first time. To print.

    Latest Voting History

    View History
    June 24, 2025
    PASS
    Senate Committee
    Senate Judiciary Hearing
    AyesNoesNVRTotalResult
    120113PASS

    Contacts

    Profile
    Anna CaballeroD
    Senator
    Committee Member
    Not Contacted
    Not Contacted
    Profile
    Tim GraysonD
    Senator
    Committee Member
    Not Contacted
    Not Contacted
    Profile
    Megan DahleR
    Senator
    Committee Member
    Not Contacted
    Not Contacted
    Profile
    Kelly SeyartoR
    Senator
    Committee Member
    Not Contacted
    Not Contacted
    Profile
    Aisha WahabD
    Senator
    Committee Member
    Not Contacted
    Not Contacted
    0 of 9 row(s) selected.
    Page 1 of 2
    Select All Legislators
    Profile
    Anna CaballeroD
    Senator
    Committee Member
    Profile
    Tim GraysonD
    Senator
    Committee Member
    Profile
    Megan DahleR
    Senator
    Committee Member
    Profile
    Kelly SeyartoR
    Senator
    Committee Member
    Profile
    Aisha WahabD
    Senator
    Committee Member
    Profile
    John HarabedianD
    Assemblymember
    Bill Author
    Profile
    Christopher CabaldonD
    Senator
    Committee Member
    Profile
    Sasha Renee PerezD
    Senator
    Bill Author
    Profile
    Laura RichardsonD
    Senator
    Committee Member