October 2026 Advocacy Update
September 30 marked Governor Newsom’s deadline to act on legislation passed during the 2026 legislative session, bringing the year’s legislative activity to a close. The Governor signed the majority of measures sent to his desk while vetoing nearly 100 bills.
For CCBN, the end of session brought several meaningful victories. Through sustained engagement throughout the year, several proposals of significant concern to community banks were either substantially narrowed or stopped altogether.
Mortgage Forbearance Bills Signed Following Significant Amendments
Governor Newsom signed AB 1841 and AB 1847 (Harabedian), both related to mortgage forbearance protections for survivors of the Los Angeles fires. As a reminder, the measures double the mortgage forbearance window available under state law from 12 months to 24 months and require mortgage servicers to offer eligible borrowers the option of deferring repayment of missed payments until the end of the loan, unless prohibited by investor contract terms or applicable servicing guidelines.
CCBN moved to neutral on AB 1841 earlier in the session. Following significant late-session amendments, the industry also moved to neutral on AB 1847. The amendments addressed key operational concerns raised by lenders and servicers during the legislative process.
AB 801 – Major Industry Concerns Addressed
Governor Newsom also signed AB 801 (Bonta), but the final measure looks very different from the proposal introduced at the beginning of the year. Originally, AB 801 would have created a broad state-level Community Reinvestment Act (CRA) framework. CCBN and the banking industry raised significant concerns with the scope and potential impact of the proposal. Following extensive advocacy and negotiations, the bill was substantially narrowed. The final version is limited to mortgage lending and includes a Home Mortgage Disclosure Act (HMDA) reporting threshold, addressing two of the industry’s central concerns.
As a result of these amendments, CCBN moved to a neutral position on the bill. Given where AB 801 began, its final form represents a significant legislative win for community banks. Rather than establishing the broad California CRA framework initially envisioned, the enacted bill is considerably more limited in scope. We do expect proponents may return in 2027 with another effort to establish a broader state CRA, and CCBN will remain closely engaged.
AB 1018 – Automated Decision Systems Bill Defeated
AB 1018 (Bauer-Kahan), which would have imposed new requirements related to automated decision systems, did not reach the Governor’s desk and is dead for the year. CCBN opposed the measure and worked throughout the session to raise concerns about its potential impact on financial institutions.
State Bank Proposal Successfully Kept at Bay
CCBN also successfully opposed an effort to revive a state-owned bank proposal during the final weeks of session.The proposal was similar to AB 2243 (Haney), which CCBN opposed and which died earlier this year. The revived concept would have created a California Public Financial Infrastructure Commission, backed by a $4 million General Fund appropriation, to develop a state-owned financial institution capable of holding state revenues and providing financing for housing, infrastructure, climate projects, small businesses, disaster recovery, and local governments.
CCBN proactively engaged as lawmakers considered reviving the proposal, and it ultimately never surfaced.
A Strong Finish for CCBN
Taken together, these outcomes reflect a successful close to the 2026 legislative session for CCBN. A sweeping state CRA proposal was significantly narrowed, AB 1018 was defeated, and efforts to revive a state bank proposal were stopped before they could advance. Many of these issues are likely to return in some form next year, particularly proposals related to fair lending and public banking. CCBN will continue to engage early and aggressively as the 2027 legislative session takes shape.