Legislative Successes
2021 was another unique year for the California Legislature. Although committee hearings and floor sessions took place in-person at the Capitol, most other legislative business occurred largely remotely. Notwithstanding this year’s peculiarities, CCBN saw a number of victories in 2021 and tracked various legislative and regulatory proposals.
Secured Exemption from Public Bank Legislation
Public banking was at the forefront for legislators this year. As you may recall, AB 857 was passed in 2019, which authorized the establishment of a public bank by a local agency upon approval by the Department of Financial Protection and Innovation (DFPI), and the FDIC. DFPI approved regulations implementing AB 857 on September 14, which will go into effect January 1, 2022.
In 2021, Assemblyman Miguel Santiago (D-Los Angeles) introduced AB 1177, which as initially drafted, would have created a zero-fee public banking option funded by interchange fees. CCBN successfully advocated to amend the bill to require a market analysis to be performed by mid-2024 to assess the feasibility of the program. The Legislature will then determine if the program should move forward. So, the program has been delayed two years and will only go-live if the Legislature approves it in 2024.
Protected Community Banks Against Onerous Climate Risk Reporting Requirements
Outside the public banking space, CCBN was successful in obtaining a carve-out from SB 449 (Stern), which seeks to require businesses to prepare climate-related financial risk reports. CCBN secured an amendment to exempt banks with less than $500 million in annual revenues, essentially exempting community banks. SB 449 was later made a 2-year bill, so it is eligible to be heard in 2022. But the $500 million annual revenue exemption remains in place.
Mitigated Debt Collection Legislation
CCBN was also successful in curbing SB 373 (Min), which would have allowed a person to bring an action against a claimant (debt collector) to establish that the person is a survivor of economic abuse in connection with that claim. The bill is also now a 2-year bill, so it cannot be brought up for a vote until 2022. CCBN will remain engaged in 2022 to mitigate SB 373.
Supported Beneficial Legislation & Key Appointments
Although our top priority has been to allay the onerous bills introduced this year, we have also identified policies to support. Senator Monique Limon (D-Santa Barbara), who is chair of the Senate Banking and Finance Committee, introduced SB 757. The bill will provide increased protections for solar customers by clarifying that installation of solar systems is considered a home improvement and that homeowners are afforded similar protections enforced by the Contractors State Licensing Board (CSLB). CCBN submitted a letter to Senator Limon in support of SB 757 and to the Governor requesting his signature, who signed it on September 23. It will go into effect January 1, 2022.
CCBN also submitted a letter and provided verbal testimony in support of the confirmation of Suzanne Martindale as Senior Deputy Commissioner of Consumer Financial Protection at the Department of Financial Protection and Innovation (DFPI). As DFPI continues to ramp up, it is important that CCBN maintains good relationships with those in leadership positions at the Department. Martindale was confirmed by the Senate Rules Committee and her confirmation was approved by the full Senate.
Looking Ahead
2021 was the first year of a 2-year session, so bills that were tabled in 2021 may be resurrected. CCBN had a strong and active presence in Sacramento this year and will continue to remain actively engaged to protect the interests of community banks in 2022. In addition to the key bills listed above, we lobbied both for and against other bills that had an impact on the banking industry. Even in a year when there was little in-person lobbying, CCBN was represented on many issues.
Secured Exemption from Public Bank Legislation
Public banking was at the forefront for legislators this year. As you may recall, AB 857 was passed in 2019, which authorized the establishment of a public bank by a local agency upon approval by the Department of Financial Protection and Innovation (DFPI), and the FDIC. DFPI approved regulations implementing AB 857 on September 14, which will go into effect January 1, 2022.
In 2021, Assemblyman Miguel Santiago (D-Los Angeles) introduced AB 1177, which as initially drafted, would have created a zero-fee public banking option funded by interchange fees. CCBN successfully advocated to amend the bill to require a market analysis to be performed by mid-2024 to assess the feasibility of the program. The Legislature will then determine if the program should move forward. So, the program has been delayed two years and will only go-live if the Legislature approves it in 2024.
Protected Community Banks Against Onerous Climate Risk Reporting Requirements
Outside the public banking space, CCBN was successful in obtaining a carve-out from SB 449 (Stern), which seeks to require businesses to prepare climate-related financial risk reports. CCBN secured an amendment to exempt banks with less than $500 million in annual revenues, essentially exempting community banks. SB 449 was later made a 2-year bill, so it is eligible to be heard in 2022. But the $500 million annual revenue exemption remains in place.
Mitigated Debt Collection Legislation
CCBN was also successful in curbing SB 373 (Min), which would have allowed a person to bring an action against a claimant (debt collector) to establish that the person is a survivor of economic abuse in connection with that claim. The bill is also now a 2-year bill, so it cannot be brought up for a vote until 2022. CCBN will remain engaged in 2022 to mitigate SB 373.
Supported Beneficial Legislation & Key Appointments
Although our top priority has been to allay the onerous bills introduced this year, we have also identified policies to support. Senator Monique Limon (D-Santa Barbara), who is chair of the Senate Banking and Finance Committee, introduced SB 757. The bill will provide increased protections for solar customers by clarifying that installation of solar systems is considered a home improvement and that homeowners are afforded similar protections enforced by the Contractors State Licensing Board (CSLB). CCBN submitted a letter to Senator Limon in support of SB 757 and to the Governor requesting his signature, who signed it on September 23. It will go into effect January 1, 2022.
CCBN also submitted a letter and provided verbal testimony in support of the confirmation of Suzanne Martindale as Senior Deputy Commissioner of Consumer Financial Protection at the Department of Financial Protection and Innovation (DFPI). As DFPI continues to ramp up, it is important that CCBN maintains good relationships with those in leadership positions at the Department. Martindale was confirmed by the Senate Rules Committee and her confirmation was approved by the full Senate.
Looking Ahead
2021 was the first year of a 2-year session, so bills that were tabled in 2021 may be resurrected. CCBN had a strong and active presence in Sacramento this year and will continue to remain actively engaged to protect the interests of community banks in 2022. In addition to the key bills listed above, we lobbied both for and against other bills that had an impact on the banking industry. Even in a year when there was little in-person lobbying, CCBN was represented on many issues.