February 2026 Advocacy Update

The California Legislature is in full swing and has passed the key deadline for two-year bills to advance out of their house of origin. The field of active bills impacting community banks is now more defined.

Advocacy Win: AB 909 (Schiavo) is dead. The bill would have expanded the coerced debt statute and capped customer liability at $50 for a broad range of fraudulent transactions. CCBN actively opposed the measure due to significant fraud and operational risk concerns.

Bills of Concern Still Moving:

AB 801 (Bonta): Would create a state-level Community Reinvestment Act. CCBN is opposed due to duplicative regulation and potential impacts on community bank lending capacity.

AB 1018 (Bauer-Kahan): Seeks to regulate automated decision systems. The bill could raise the cost of credit and undermine existing cybersecurity and anti-fraud systems already governed by robust federal and state oversight.

Budget Update: Governor Gavin Newsom released his proposed budget on January 9. Revenues are up $42.3 billion compared to prior assumptions, and the projected deficit has narrowed to $2.9 billion. Despite this improvement, little new funding is proposed.

Political Landscape: The 2026 Governor’s race continues to heat up, with San Jose Mayor Matt Mahan recently announcing his candidacy, adding to an already crowded Democratic field.

What’s Next: The bill introduction deadline is February 20. Committee activity will accelerate soon, and CCBN will continue active advocacy to protect community banks and preserve the competitiveness of the state charter.