Legislative Successes
After a whirlwind of a year impacted by the COVID-19 pandemic, the Legislature managed to pass significant reforms impacting the financial services industry despite many other proposals falling by the wayside. CCBN was actively engaged in a number of proposals and helped secure significant legislative victories. Below are some of the victories that we secured this session.
Department of Business Oversight Reform
In the Governor’s January Budget, he included provisions that would significantly expand the duties and responsibilities of the Department of Business Oversight and rename it the Department of Financial Protection and Innovation (DFPI). The proposal would have essentially created a California CFPB and Richard Cordray played a big role in drafting the initial language.
This proposal continued to be a high priority of the Newsom administration despite the complications that COVID-19 brought onto the legislative session. Negotiations on this continued into the summer, mainly around the provisions that would expand the Department’s authority to enforce unfair, deceptive, or abusive acts or practices (UDAAP). CCBN along with other stakeholders were heavily engaged in the crafting of the policy and ultimately negotiated that UDAAP authority over existing licensees would not be any more or less than what is currently granted under Dodd-Frank. With this compromise we were able to move to a neutral position.
What ultimately passed was a proposal that expands the Department’s authority to regulate entities that are not currently licensed and require them to register with the DFPI. The final proposal also included a sunset for the registration provisions as well as a requirement that the DFPI report to the Legislature annually.
The bill implementing these changes is AB 1864 which passed out of the Legislature by a significant margin. Because this measure is part of the budget, it will become effective immediately after it is signed by the Governor. AB 1864 was signed by the Governor on September 25, 2020.
Mortgage Forbearance bills in 2020
In May, Assemblymember Monique Limon who is the Chair of the Assembly Banking and Finance Committee proposed a bill that would establish a foreclosure moratorium and included provisions that required mortgage forbearance. This bill was deeply flawed and was heavily opposed by CCBN. Ultimately, this bill died on the Assembly Floor because Assemblymember Limon was unable to garner necessary support from her colleagues to pass such a controversial and flawed bill. Nevertheless, it is clear that bills that are dead in Sacramento don’t always stay that way.
In late July provisions that were nearly identical to AB 2501, were inserted into one of the Legislature’s primary housing bills for the year, AB 1436 authored by Assemblyman David Chiu. CCBN continued opposition to this bill along with the coalition of other banking stakeholders. AB 1436 fell victim to political infighting between the Senate and the Assembly and ultimately died in the Senate Appropriations Committee. With the main legislative proposals on housing dead, eyes turned to the Governor who became engaged in the conversation and helped craft a compromise measure.
AB 3088 was the product of negotiations between the Governor, both houses of the Legislature, and a wide range of stakeholders. The bill included rent relief for tenants but the provisions most important to CCBN were those concerning mortgage forbearance. The final compromise was a significant improvement to Assemblyman Chiu’s AB 1436 and the forbearance provisions were made consistent with the requirement of the federal CARES Act. This enabled CCBN to remain neutral on AB 3088. This bill passed on the last night of session and Governor Newsom signed it.
CCBN had a strong and active presence in Sacramento in 2020 . In addition to the key bills above, we lobbied both for and against a myriad of other bills that had an impact on the banking industry. Even in a year when there was in-person lobbying, CCBN was represented on many issues.
Department of Business Oversight Reform
In the Governor’s January Budget, he included provisions that would significantly expand the duties and responsibilities of the Department of Business Oversight and rename it the Department of Financial Protection and Innovation (DFPI). The proposal would have essentially created a California CFPB and Richard Cordray played a big role in drafting the initial language.
This proposal continued to be a high priority of the Newsom administration despite the complications that COVID-19 brought onto the legislative session. Negotiations on this continued into the summer, mainly around the provisions that would expand the Department’s authority to enforce unfair, deceptive, or abusive acts or practices (UDAAP). CCBN along with other stakeholders were heavily engaged in the crafting of the policy and ultimately negotiated that UDAAP authority over existing licensees would not be any more or less than what is currently granted under Dodd-Frank. With this compromise we were able to move to a neutral position.
What ultimately passed was a proposal that expands the Department’s authority to regulate entities that are not currently licensed and require them to register with the DFPI. The final proposal also included a sunset for the registration provisions as well as a requirement that the DFPI report to the Legislature annually.
The bill implementing these changes is AB 1864 which passed out of the Legislature by a significant margin. Because this measure is part of the budget, it will become effective immediately after it is signed by the Governor. AB 1864 was signed by the Governor on September 25, 2020.
Mortgage Forbearance bills in 2020
In May, Assemblymember Monique Limon who is the Chair of the Assembly Banking and Finance Committee proposed a bill that would establish a foreclosure moratorium and included provisions that required mortgage forbearance. This bill was deeply flawed and was heavily opposed by CCBN. Ultimately, this bill died on the Assembly Floor because Assemblymember Limon was unable to garner necessary support from her colleagues to pass such a controversial and flawed bill. Nevertheless, it is clear that bills that are dead in Sacramento don’t always stay that way.
In late July provisions that were nearly identical to AB 2501, were inserted into one of the Legislature’s primary housing bills for the year, AB 1436 authored by Assemblyman David Chiu. CCBN continued opposition to this bill along with the coalition of other banking stakeholders. AB 1436 fell victim to political infighting between the Senate and the Assembly and ultimately died in the Senate Appropriations Committee. With the main legislative proposals on housing dead, eyes turned to the Governor who became engaged in the conversation and helped craft a compromise measure.
AB 3088 was the product of negotiations between the Governor, both houses of the Legislature, and a wide range of stakeholders. The bill included rent relief for tenants but the provisions most important to CCBN were those concerning mortgage forbearance. The final compromise was a significant improvement to Assemblyman Chiu’s AB 1436 and the forbearance provisions were made consistent with the requirement of the federal CARES Act. This enabled CCBN to remain neutral on AB 3088. This bill passed on the last night of session and Governor Newsom signed it.
CCBN had a strong and active presence in Sacramento in 2020 . In addition to the key bills above, we lobbied both for and against a myriad of other bills that had an impact on the banking industry. Even in a year when there was in-person lobbying, CCBN was represented on many issues.