August Sacramento Update

The Legislature adjourned on July 18 for a month-long summer recess, so the halls of the State Capitol are relatively calm. Prior to adjourning, marathon policy committee hearings took place to pass bills ahead of the July 18 second-house policy committee deadline. 

CCBN has had some significant successes mitigating harmful legislation so far this session.  Working with other coalition partners, we were able to table 801 (Bonta) until next year, allowing time over the fall to have additional conversations with the author and continue our advocacy.  AB 801 seeks to establish the California Community Reinvestment Act, and would require a covered financial institution to have a continuing and affirmative obligation to meet the financial services needs of the communities, including low- and moderate-income communities and communities of color, in which the covered financial institution conducts substantial business, as specified. The bill would also prohibit a covered financial institution with certain ratings from receiving state funds for deposit or being awarded a state contract to provide financial services.  

Earlier in the session, CCBN worked to defeat AB 1065 (Ortega), which would have prohibited interchange fees on sales taxes.  We also advocated to make AB 909 (Schiavo) a 2-year bill.  AB 909 would have added “induced transactions” to the coerced debt statute and limited an account holder’s liability to $50 on fraudulent transactions including funds transfer, payment orders, cash withdrawal, cash advances, credit extensions and other financial transactions. 

Two concerning bills continue to move through the process:

SB 825 (Limon), which would allow DFPI to enforce UDAP violations. Although the bill specifies that state-chartered banks are exempt from the CCFPL, the bill removed the exemption from UDAP enforcement, which is concerning for community banks which are already regulated by the FDIC and UDAP.  The bill would create a scenario where 2 different versions of UDAP are being enforced.  CCBN has vocalized opposition to this bill and will continue to do so.

AB 1018 (Bauer-Kahan), which seeks to regulate automated decision systems (ADSs).  It could increase the cost of providing credit to California residents and compromise cybersecurity and anti-fraud efforts of financial institutions already abiding by robust federal and state laws, regulations, and supervisory guidance that are applicable to the use of all technologies, including ADSs. 

CCBN was successful in defeating AB 1365 (Garcia), which would have established the CalAccount program which would provide all Californians access to free, voluntary, zero-fee, zero-penalty, federally insured bank accounts. However, $1 million was included in the State Budget to the State Treasurer for the continuation of the CalAccount Blue Ribbon Commission to evaluate the feasibility of CalAccounts.  CCBN signed onto a letter with CBA with recommendations on next steps related to CalAccounts. 

Lawmakers will return to Sacramento on August 18 for the final month of the 2025 legislation session, which adjourns September 12.