Mortgages: hazard insurance proceeds.
- Requires financial institutions to pay 2% annual interest on hazard insurance proceeds held for property repairs.
- Prohibits banks from charging fees that would reduce insurance proceeds interest below 2% annually.
- Takes effect immediately to protect wildfire victims rebuilding their homes.
- Allows banks to deposit insurance proceeds in interest-bearing accounts at federal institutions.
Assemblymember Harabedian's legislation requires financial institutions to pay interest on hazard insurance proceeds held in loss draft accounts while property owners rebuild or repair their homes. The bill mandates a minimum 2% simple interest rate annually on these funds when held by institutions that make or purchase loans secured by one- to four-family residences.
The measure authorizes financial institutions to deposit insurance proceeds in interest-bearing accounts at federally insured depositories, federal home loan banks, federal reserve banks, or similar government-sponsored enterprises. It prohibits fees or charges that would reduce the effective interest rate below 2%. The requirements apply to both existing and new loss draft accounts, with interest accrual beginning immediately upon the bill's effective date.
The legislation includes targeted exemptions for cases where regulatory authorities require non-bank financial institutions to place funds in non-interest-bearing demand trust accounts. It also amends existing escrow account rules to align with the new interest requirements while maintaining protections that prevent commingling of funds and restrict withdrawals to specific authorized purposes.
 John HarabedianD Assemblymember | Bill Author |  Not Contacted | |
 Sasha Renee PerezD Senator | Bill Author | Not Contacted |
Email the authors or create an email template to send to all relevant legislators.
Introduced By
Latest Voting History
| Ayes | Noes | NVR | Total | Result |
|---|---|---|---|---|
| 77 | 0 | 2 | 79 | PASS |
- Requires financial institutions to pay 2% annual interest on hazard insurance proceeds held for property repairs.
- Prohibits banks from charging fees that would reduce insurance proceeds interest below 2% annually.
- Takes effect immediately to protect wildfire victims rebuilding their homes.
- Allows banks to deposit insurance proceeds in interest-bearing accounts at federal institutions.
Email the authors or create an email template to send to all relevant legislators.
Introduced By
Assemblymember Harabedian's legislation requires financial institutions to pay interest on hazard insurance proceeds held in loss draft accounts while property owners rebuild or repair their homes. The bill mandates a minimum 2% simple interest rate annually on these funds when held by institutions that make or purchase loans secured by one- to four-family residences.
The measure authorizes financial institutions to deposit insurance proceeds in interest-bearing accounts at federally insured depositories, federal home loan banks, federal reserve banks, or similar government-sponsored enterprises. It prohibits fees or charges that would reduce the effective interest rate below 2%. The requirements apply to both existing and new loss draft accounts, with interest accrual beginning immediately upon the bill's effective date.
The legislation includes targeted exemptions for cases where regulatory authorities require non-bank financial institutions to place funds in non-interest-bearing demand trust accounts. It also amends existing escrow account rules to align with the new interest requirements while maintaining protections that prevent commingling of funds and restrict withdrawals to specific authorized purposes.
Latest Voting History
| Ayes | Noes | NVR | Total | Result |
|---|---|---|---|---|
| 77 | 0 | 2 | 79 | PASS |
John HarabedianD Assemblymember | Bill Author | Not Contacted | |
Sasha Renee PerezD Senator | Bill Author | Not Contacted |