October Advocacy Update

Lawmakers gaveled down on Saturday, September 13 to conclude their business for the 2025 legislative session.  There was no shortage of drama in the week leading up to the last day, as legislators tackled affordability, charter school accountability, gas prices, energy costs, and artificial intelligence.  

The Legislature closed out the session with a climate package rebranded as “Cap-and-Invest,” (formerly Cap-and-Trade), a housing bill that overrides local zoning near transit, more oil drilling in Kern county in hopes to avoid refinery closures, and a handful of consumer protections aimed at softening rising utility bills. They also passed a bill designating Diwali as an official holiday - also known as Deepavali and the Hindu “Festival of Lights,” and legislation to allow for California to join a Western regional energy market.

Amidst the typical end of session drama, the Legislature approved and the Governor signed a constitutional amendment (Prop 50) to redraw the state’s congressional districts to gain Democrats several new congressional seats.  Prop 50 must be approved by voters in a special election that will take place in November.  So far, polling for the initiative looks favorable but a lot can happen between now in November.  

Specific to community banks, we scored a significant victory this session when AB 1018 (Bauer-Kahan) was placed on the inactive file shortly before the Legislature adjourned.  The bill sought 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. The author pulled the bill because it was at risk of failing on the Senate floor. Although it’s dead for the year,  it will be eligible to be taken up in January. 

Another bill that a was tabled at the end of session was AB 1331 (Elhawary), which would have regulated the use of workplace surveillance tools by both public and private employers. Like AB 1018, it was broadly opposed by the business community and can be reconsidered in January. 

We were able to defeat or mitigate concerns with all of the bills we opposed this year except for SB 825 (Limon), which is on the Governor’s desk.  SB 825 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 signed onto a coalition letter with other concerned stakeholders asking for a veto.

The Governor has until October 13 to sign or veto the bills that are on his desk.