March 2026 Sacramento Update

The February 20 bill introduction deadline has come and gone with 1,798 bills introduced—the lowest total in decades. This reflects tighter bill limits imposed by legislative leadership and a newly formalized process to evaluate the effectiveness of recently enacted statutes before advancing new proposals. The ongoing state budget deficit is also a factor, which continues to dampen appetite for measures with ongoing General Fund costs. While the overall volume of legislation is down, several proposals of concern to community banks have been introduced and will require active engagement.

Key Bills CCBN Is Opposing

• AB 2674 (Schiavo), which requires banks to implement specified “preventive measures” when financial abuse or deception is suspected, mandates investigations upon customer notice, and authorizes civil enforcement. Similar to last year’s AB 909, which CCBN helped defeat. This would create significant compliance and litigation exposure.
• AB 1847 (Harabedian), which extends wildfire-related mortgage forbearance from 12 to 36 months and extends the request deadline to 2029—posing substantial operational and financial burdens.
• AB 2145 (Garcia), which allows retirement-age borrowers to transfer an existing mortgage interest rate and loan term to a new principal residence. Raises major underwriting and secondary market concerns.

Two-Year Bills Still Moving

• AB 801 (Bonta), which creates a state-level CRA; this is duplicative and potentially constraining for community bank lending.
• AB 1018 (Bauer-Kahan), which regulates automated decision systems, potentially increasing credit costs and disrupting existing cybersecurity and anti-fraud frameworks.

Outlook

Although overall bill volume is down, the substance of what remains is significant. We anticipate continued movement of consequential policy through amendments and budget trailer bills as the session progresses. CCBN is actively engaging legislators, committee staff, and stakeholders on these measures.  Our lobby day is March 25 and we will leverage the day to ensure community banks’ perspectives are heard and to protect your ability to serve customers effectively and safely. Join us and help make an impact on community banking policy!