2023 Advocacy Review
The 2023 legislative session concluded on September 14, followed by the Governor’s bill signing period that wrapped up on October 13. Similar to last year, approximately 1,100 bills made it to the Governor’s desk, and he signed over 85% of them, including several bills that would have had a significant negative impact on community banks if not for CCBN’s advocacy. CCBN had a very successful year and was able to either mitigate or kill the overwhelming majority of the bills we opposed.
Stopped Proposal to Make Banks Liable for Elder & Dependent Adult Abuse
One of our biggest victories this year was mitigating SB 278 by Senator Bill Dodd (D-Napa), which sought to specify that a person who assists in taking property for a wrongful use has committed financial abuse, if the person knew or should have known that this conduct is likely to be harmful to the elder or dependent adult. Sponsored by the consumer attorneys, the bill would increase liability for banks in elder and dependent financial abuse cases. Due to CCBN’s advocacy, SB 278 was amended to add safe harbors for financial institutions. However, it remained problematic given that banks would have to provide seniors with a waiver and contact a trusted third party or, if that is not possible, hold the transaction for 7 days and report the suspected fraud to APS or law enforcement.
Because of our numerous concerns with the bill, the author agreed to table SB 278 for the year and work with CCBN and other industry stakeholders to come to an agreement on amendments. On October 3, the Assembly Banking and Finance Committee held a roundtable discussion with Senator Dodd, the consumer attorneys and the banking industry to discuss potential solutions to elder and dependent adult abuse. CCBN was an active participant in those discussions via Laurel Sykes, EVP and Chief Risk Officer for American Riviera Bank, and offered workable alternatives to what is currently proposed in SB 278. CCBN will continue to work this fall with Senator Dodd and others in the banking industry on amendments to SB 278. Because it is a 2-year bill, it will be eligible to be considered in 2024.
Obtained Carve-Out from Junk Fees Bill
SB 478, also by Senator Bill Dodd (D-Napa), will require junk fees to be disclosed to consumers in the total price of a good of service. The bill is sponsored by California Attorney General Rob Bonta and targets hidden fees for items and services like hotels and rental cars. Financial services were not the intended target of the bill and CCBN and other banking industry representatives were able to work with the author and the Attorney General’s office to obtain explicit exemptions for financial institutions engaged in licensed business activity. SB 478 was signed by the Governor on October 7.
Mitigated Debt Collection Legislation
Last session, CCBN worked for over a year to reach a compromise on SB 975 by Senator Dave Min (D-Irvine), which created a non-judicial process for relief for debt incurred in the name of a debtor through coercion. CCBN, along with other financial services industry stakeholders, secured numerous amendments to the bill to make it less onerous for lenders – specifically ensuring there is a process for perpetrators to be held liable and that the law did not apply to secured loans nor loans made for commercial purposes.
This year, Senate Banking & Financial Institutions Committee chair Monique Limon (D-Santa Barbara) introduced SB 727, which allows a survivor of human trafficking to obtain a court finding that specific debts attributed to the survivor were incurred as the result of trafficking and without their consent. SB 727 initially referenced the SB 975 (Min) process related to coerced debt, but CCBN worked with the author and committee to ensure the bill was limited to a finding and that the reference to SB 975 was removed. SB 727 was signed by the Governor on October 9.
Maintained Financial Institutions Exemption to California Fair Chance Act
CCBN worked within a coalition of other financial services stakeholders to stop SB 809 by Senator Lola Smallwood-Cuevas (D-Los Angeles). SB 809 would have made changes to AB 1008 from 2017, which CCBN advocated against and ultimately was successful in securing amendments to make the bill workable. That bill, dubbed the CA fair Chance Act, dealt with background checks and sought to reduce barriers to employment for people with conviction histories. SB 809 would have weakened that exemption and required banks to go through the entire hiring process before running a background check. Due to our advocacy efforts, it was held in Senate Appropriations Committee so it is dead for the year.
Supported Financial Literacy Legislation
CCBN supported several bills this year that would have increased financial literacy education requirements for California’s K-12 students. These included bills to appropriate funds for the purchase of instructional materials in financial literacy; require schools to offer courses in personal finance and require pupils graduating in the 2028-29 school year to complete a one-semester course in personal finance; and to add financial literacy to the course of study for social science instruction. Unfortunately, none of these bills were successful because of their associated price tags. However, these measures were a good opportunity to raise awareness of CCBN and build relationships with the authoring legislators.
2024 is the second year of the 2023-24 two-year session. CCBN will remain vigilant in our advocacy against SB 278 (Dodd) and efforts to educate legislators regarding the role community banks play in combatting elder and dependent adult financial abuse. Democrats’ will retain their supermajorities in the legislature, and those numbers could grow even larger after the November general election. The issue of overdraft fees is top-of-mind for some progressive lawmakers, so there is the potential for legislation limiting the use of ODFs in California’s financial institutions.
In addition, this year the Task Force to Study and Develop Reparations Proposals for African Americans released its final report to the Legislature, which included recommendations on the creation of a Freedman’s Savings & Trust Bank and proposals to adjust lending practices and ensure equitable housing for African American’s. Although these proposals would be expensive to implement, we may see related legislation in 2024.
CCBN will continue to be actively engaged in Sacramento next year to protect the interest of community banks and foster relationships with new and existing lawmakers and regulators.