Legislative Successes
2019 Victories
2019 proved to be an eventful year for the California Legislature. Given that it was the first year of a two-year session, both freshman and veteran Members of the Assembly and Senate were eager to address California’s most pressing issues. CCBN saw a number of victories in 2019, and tracked various legislative proposals.
Several bills were introduced in 2019 with the goal of creating a public bank. The first of which was AB 528 by Senator Ben Hueso. When introduced, this bill would have laid the groundwork to make the I-Bank a depository institution. It was later amended to study the feasibility of transitioning the I-Bank into a depository institution and was ultimately held in the Senate Appropriations Committee.
The other public banking bill introduced this year was AB 857 by Assemblymember David Chiu. This bill authorizes the establishment of a public bank by a local agency upon approval by the Department of Business Oversight and the Federal Deposit Insurance Corporation. Assemblymember Chiu specifically reached out to CCBN (via Capitol Advocacy) to work with us on this measure. He was hoping to find a way to move CCBN to neutral. Unfortunately, we were unable to do that but he did include language into the bill encouraging public banks to work with community banks. AB 857 passed the legislature and was ultimately signed by Governor Gavin Newsom. Both San Francisco and Los Angeles have moved forward with applications to establish public banks.
CCBN saw a victory in 2019 with the passage of AB 945, authored by Assemblymember Kevin McCarty. This bill authorizes local agencies to invest more of their surplus funds with local banks and credit unions. CCBN supported this bill throughout the legislative process and it was ultimately signed by the governor on October 8th.
Another change that will happen in 2020 will be a significant overhaul of the Department of Business Oversight (DBO). Governor Newsom announced in his presentation of the budget that recent rollbacks of the Consumer Financial Protection Bureau have left California residents vulnerable to predatory businesses, and also have left companies without clarity needed in order to innovate. The DBO will be renamed as the Department of Financial Protection and Innovation and will have its authority expanded. They will begin licensing and examining new industries that are currently under-regulated and will establish a new Financial Technology Innovation office that Governor Newsom says will cultivate the responsible development of new consumer financial products. This overhaul will be a high-profile item in 2020, and CCBN will continue to monitor this as well as advocate on legislation that is impactful to Community Banks.
Past Victories
Secured Exemption from the California Consumer Privacy Act for Most Activities
In 2018 California passed the most expansive privacy legislation in the United States by way of AB 375, the California Consumer Privacy Act (CCPA). This bill was quickly passed and signed by the Governor with the understanding that further legislation would be needed to provide cleanup and technical fixes. The subsequent cleanup bill was SB 1121, authored by Senator Bill Dodd (D-Napa). CCBN, along with the financial services community, secured an amendment to SB 1121 that clarified the Gramm-Leach-Bliley Act exemption for financial institutions. The Act still requires financial institutions to comply with California’s longstanding Financial Privacy Act in addition to the Gramm-Leach-Bliley Act. The clarification removed compliance uncertainty on the expectations for financial institutions related to the new privacy law. This bill was passed by the Legislature unanimously and was signed by the Governor on September 13th.
Blocked Legislation to Eliminate Bank Levies for Debt Recovery
Senator Bob Wieckowski (D-Fremont) once again tried to eliminate bank levies as a means of recovering funds owed to creditors. This bill failed on the last day of session in 2017 but the author amended it and tried again this year. CCBN worked with a broad coalition to block this bill. It would have essentially eliminated bank levies as a tool for debt recovery by creating an automatic exemption amount of $2,250. This is so high that it would have prohibited nearly all bank levies. CCBN successfully lobbied this bill and it once again failed passage on the Assembly floor on the last night of session this year.
Maintained Community Bank Carveout in Homeowner Bill of Rights Renewal
In 2012, the state legislature passed a bill that established the Homeowner Bill of Rights. At that time CCBN secured a carveout from the provisions of that bill. The Homeowner Bill of Rights expired last year. However SB 818 authored by Senator Jim Beall (D-San Jose) provided a permanent extension for this. Once again, CCBN lobbied to protect and maintain the existing carveout for community banks. This bill passed the Legislature and was signed by the Governor on September 14.
2019 proved to be an eventful year for the California Legislature. Given that it was the first year of a two-year session, both freshman and veteran Members of the Assembly and Senate were eager to address California’s most pressing issues. CCBN saw a number of victories in 2019, and tracked various legislative proposals.
Several bills were introduced in 2019 with the goal of creating a public bank. The first of which was AB 528 by Senator Ben Hueso. When introduced, this bill would have laid the groundwork to make the I-Bank a depository institution. It was later amended to study the feasibility of transitioning the I-Bank into a depository institution and was ultimately held in the Senate Appropriations Committee.
The other public banking bill introduced this year was AB 857 by Assemblymember David Chiu. This bill authorizes the establishment of a public bank by a local agency upon approval by the Department of Business Oversight and the Federal Deposit Insurance Corporation. Assemblymember Chiu specifically reached out to CCBN (via Capitol Advocacy) to work with us on this measure. He was hoping to find a way to move CCBN to neutral. Unfortunately, we were unable to do that but he did include language into the bill encouraging public banks to work with community banks. AB 857 passed the legislature and was ultimately signed by Governor Gavin Newsom. Both San Francisco and Los Angeles have moved forward with applications to establish public banks.
CCBN saw a victory in 2019 with the passage of AB 945, authored by Assemblymember Kevin McCarty. This bill authorizes local agencies to invest more of their surplus funds with local banks and credit unions. CCBN supported this bill throughout the legislative process and it was ultimately signed by the governor on October 8th.
Another change that will happen in 2020 will be a significant overhaul of the Department of Business Oversight (DBO). Governor Newsom announced in his presentation of the budget that recent rollbacks of the Consumer Financial Protection Bureau have left California residents vulnerable to predatory businesses, and also have left companies without clarity needed in order to innovate. The DBO will be renamed as the Department of Financial Protection and Innovation and will have its authority expanded. They will begin licensing and examining new industries that are currently under-regulated and will establish a new Financial Technology Innovation office that Governor Newsom says will cultivate the responsible development of new consumer financial products. This overhaul will be a high-profile item in 2020, and CCBN will continue to monitor this as well as advocate on legislation that is impactful to Community Banks.
Past Victories
Secured Exemption from the California Consumer Privacy Act for Most Activities
In 2018 California passed the most expansive privacy legislation in the United States by way of AB 375, the California Consumer Privacy Act (CCPA). This bill was quickly passed and signed by the Governor with the understanding that further legislation would be needed to provide cleanup and technical fixes. The subsequent cleanup bill was SB 1121, authored by Senator Bill Dodd (D-Napa). CCBN, along with the financial services community, secured an amendment to SB 1121 that clarified the Gramm-Leach-Bliley Act exemption for financial institutions. The Act still requires financial institutions to comply with California’s longstanding Financial Privacy Act in addition to the Gramm-Leach-Bliley Act. The clarification removed compliance uncertainty on the expectations for financial institutions related to the new privacy law. This bill was passed by the Legislature unanimously and was signed by the Governor on September 13th.
Blocked Legislation to Eliminate Bank Levies for Debt Recovery
Senator Bob Wieckowski (D-Fremont) once again tried to eliminate bank levies as a means of recovering funds owed to creditors. This bill failed on the last day of session in 2017 but the author amended it and tried again this year. CCBN worked with a broad coalition to block this bill. It would have essentially eliminated bank levies as a tool for debt recovery by creating an automatic exemption amount of $2,250. This is so high that it would have prohibited nearly all bank levies. CCBN successfully lobbied this bill and it once again failed passage on the Assembly floor on the last night of session this year.
Maintained Community Bank Carveout in Homeowner Bill of Rights Renewal
In 2012, the state legislature passed a bill that established the Homeowner Bill of Rights. At that time CCBN secured a carveout from the provisions of that bill. The Homeowner Bill of Rights expired last year. However SB 818 authored by Senator Jim Beall (D-San Jose) provided a permanent extension for this. Once again, CCBN lobbied to protect and maintain the existing carveout for community banks. This bill passed the Legislature and was signed by the Governor on September 14.