AB-493
Housing & Homelessness

Property insurance notice of cancellation.

Engrossed
CA
2025-2026 Regular Session
0
0
Track

Key Takeaways

  • Requires financial institutions to pay 2% interest on insurance payouts held in escrow accounts.
  • Applies to new home loans after January 1, 2026 and existing loans in LA and Ventura wildfire zones.
  • Prohibits banks from charging fees that would reduce the 2% interest rate on escrowed insurance funds.
  • Takes immediate effect to help homeowners impacted by the January 2025 Los Angeles wildfires.

Summary

Assembly Member Harabedian's mortgage lending reform legislation responds to devastating January 2025 wildfires in Los Angeles and Ventura counties by requiring financial institutions to pay interest on insurance proceeds held in escrow accounts. The measure amends California's existing requirements for interest payments on property tax and insurance escrow accounts to explicitly include insurance payouts following property damage or loss.

For loans executed after January 1, 2026, lenders must pay borrowers at least 2% annual interest on all escrowed funds, including insurance proceeds. The bill creates a targeted exception for properties in Los Angeles and Ventura counties damaged by the January 2025 wildfires - these homeowners would receive interest on insurance payouts even if their loans predate 2026. Financial institutions cannot impose fees that would reduce the effective interest rate below 2%.

The legislation's findings document the scale of the disaster, noting that multiple wildfires burned over 47,900 acres and damaged or destroyed more than 16,250 structures across greater Los Angeles. While the interest requirement applies prospectively to avoid disrupting existing contracts, the bill's authors assert that immediate application to wildfire-impacted properties serves a compelling state interest in supporting disaster recovery and maintaining housing stability.

Key Dates

Next Step
Referred to the Senate Standing Committee on Banking and Financial Institutions
Next Step
Senate Committee
Referred to the Senate Standing Committee on Banking and Financial Institutions
Hearing scheduled for , 1021 O Street, Room 2100
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
Roger NielloR
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Tim GraysonD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Monique LimonD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Sabrina CervantesD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Melissa HurtadoD
Senator
Committee Member
Not Contacted
Not Contacted
0 of 7 row(s) selected.
Page 1 of 2
Select All Legislators
Profile
Roger NielloR
Senator
Committee Member
Profile
Tim GraysonD
Senator
Committee Member
Profile
Monique LimonD
Senator
Committee Member
Profile
Sabrina CervantesD
Senator
Committee Member
Profile
Melissa HurtadoD
Senator
Committee Member
Profile
John HarabedianD
Assemblymember
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
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

April 1, 2025
PASS
Assembly Floor
Vote on Assembly Floor
AyesNoesNVRTotalResult
770380PASS

Key Takeaways

  • Requires financial institutions to pay 2% interest on insurance payouts held in escrow accounts.
  • Applies to new home loans after January 1, 2026 and existing loans in LA and Ventura wildfire zones.
  • Prohibits banks from charging fees that would reduce the 2% interest rate on escrowed insurance funds.
  • Takes immediate effect to help homeowners impacted by the January 2025 Los Angeles wildfires.

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

Summary

Assembly Member Harabedian's mortgage lending reform legislation responds to devastating January 2025 wildfires in Los Angeles and Ventura counties by requiring financial institutions to pay interest on insurance proceeds held in escrow accounts. The measure amends California's existing requirements for interest payments on property tax and insurance escrow accounts to explicitly include insurance payouts following property damage or loss.

For loans executed after January 1, 2026, lenders must pay borrowers at least 2% annual interest on all escrowed funds, including insurance proceeds. The bill creates a targeted exception for properties in Los Angeles and Ventura counties damaged by the January 2025 wildfires - these homeowners would receive interest on insurance payouts even if their loans predate 2026. Financial institutions cannot impose fees that would reduce the effective interest rate below 2%.

The legislation's findings document the scale of the disaster, noting that multiple wildfires burned over 47,900 acres and damaged or destroyed more than 16,250 structures across greater Los Angeles. While the interest requirement applies prospectively to avoid disrupting existing contracts, the bill's authors assert that immediate application to wildfire-impacted properties serves a compelling state interest in supporting disaster recovery and maintaining housing stability.

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 Banking and Financial Institutions
Next Step
Senate Committee
Referred to the Senate Standing Committee on Banking and Financial Institutions
Hearing scheduled for , 1021 O Street, Room 2100
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

April 1, 2025
PASS
Assembly Floor
Vote on Assembly Floor
AyesNoesNVRTotalResult
770380PASS

Contacts

Profile
Roger NielloR
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Tim GraysonD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Monique LimonD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Sabrina CervantesD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Melissa HurtadoD
Senator
Committee Member
Not Contacted
Not Contacted
0 of 7 row(s) selected.
Page 1 of 2
Select All Legislators
Profile
Roger NielloR
Senator
Committee Member
Profile
Tim GraysonD
Senator
Committee Member
Profile
Monique LimonD
Senator
Committee Member
Profile
Sabrina CervantesD
Senator
Committee Member
Profile
Melissa HurtadoD
Senator
Committee Member
Profile
John HarabedianD
Assemblymember
Bill Author
Profile
Laura RichardsonD
Senator
Committee Member