July Sacramento Update

The Legislature is deep in second house policy hearings.  CCBN continues to advocate against AB 801 (Bonta) which would 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.  AB 801 will be heard in the Senate Banking and Financial Institutions Committee on July 2, followed by the Judiciary Committee on July 15. If it passes out of both committees, it will move to the Senate Appropriations Committee.  

CCBN is also working in opposition to 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.  Among other things, AB 1018 will require financial institutions to notify consumers before finalizing a “consequential decision” using an ADS that the ADS is being used, whether a human will review the decision and contact information for the deployer of the ADS and any third party involved in managing or interpreting the ADS. AB 1018 will be heard in Senate Judiciary Committee on July 18.  

Beyond legislation, Governor Newsom signed the 2025-26 State Budget on June 27, conditionally based on the Legislature’s approval of a housing bill by June 30. Despite the $12 billion deficit, the budget avoids major spending cuts to safety net programs.  However, the budget includes a provision to stop enrolling undocumented adults into the Medi-Cal program starting in 2026 and implements at $30 monthly premium starring July 2027 for immigrants who remain on Medi-Cal. The Budget also shifts $1 billion from the cap-and-trade program to pay for firefighting efforts, and allocates $80 million to fund Prop 36, which was a proposition approved by voters last year to make shoplifting a felony for repeat offenders and increase penalties for some drug charges.  

Legislators will spend the next three weeks rushing to hear bills before adjourning for summer recess on July 18.  They will return for the final month of session on August 18.