AB-1278 • 2026

Mortgages: hazard insurance proceeds: interest.

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Harabedian
Last action: 2026-05-06
Official status: Referred to Coms. on B. & F.I. and JUD.
Effective date: Not listed

Plain English Breakdown

Using official source text because the generated explanation was unavailable or could not be confirmed against the official bill text.

Mortgages: hazard insurance proceeds: interest.

AB 1278, as amended, Harabedian.

What This Bill Does

AB 1278, as amended, Harabedian.
Mortgages: hazard insurance proceeds: interest.
Existing law establishes the Department of Financial Protection and Innovation, which is under the direction of the Commissioner of Financial Protection and Innovation, and makes the department responsible for administering various laws relating to financial institutions and products, including mortgages.
Existing law defines and regulates mortgages.

Limits and Unknowns

This entry is temporarily using official source text because the generated explanation could not be confirmed against the official bill text during the last sync.

Bill History

2026-05-06 California Legislative Information
Referred to Coms. on B. & F.I. and JUD.
2026-01-29 California Legislative Information
In Senate. Read first time. To Com. on RLS. for assignment.
2026-01-29 California Legislative Information
Read third time. Passed. Ordered to the Senate. (Ayes 70. Noes 0. Page 3885.)
2026-01-26 California Legislative Information
Read second time. Ordered to Consent Calendar.
2026-01-22 California Legislative Information
From committee: Do pass. To Consent Calendar. (Ayes 15. Noes 0.) (January 22).
2026-01-15 California Legislative Information
Re-referred to Com. on APPR.
2026-01-14 California Legislative Information
Read second time and amended.
2026-01-13 California Legislative Information
From committee: Amend, and do pass as amended and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 8. Noes 0.) (January 12).
2026-01-06 California Legislative Information
Re-referred to Com. on B. & F.
2026-01-05 California Legislative Information
From committee chair, with author's amendments: Amend, and re-refer to Com. on B. & F. Read second time and amended.
2026-01-05 California Legislative Information
Referred to Com. on B. & F.
2025-02-24 California Legislative Information
Read first time.
2025-02-22 California Legislative Information
From printer. May be heard in committee March 24.
2025-02-21 California Legislative Information
Introduced. To print.

Official Summary Text

AB 1278, as amended, Harabedian.
Mortgages: hazard insurance proceeds: interest.
Existing law establishes the Department of Financial Protection and Innovation, which is under the direction of the Commissioner of Financial Protection and Innovation, and makes the department responsible for administering various laws relating to financial institutions and products, including mortgages. Existing law defines and regulates mortgages. Existing law requires a financial institution that makes loans upon the security of real property containing only a one- to 4-family residence in this state or purchases obligations secured by the property and that holds hazard insurance proceeds in a loss draft account pending property rebuilding or repair to pay interest on those funds at a rate of at least 2% simple interest per annum, as specified. Existing law requires that interest to be credited to the above-described loss draft account annually or upon termination of the account,
whichever is earlier.
This bill would, instead, require that interest to be credited to the above-described loss draft account, or
otherwise
paid
with a check, as defined, drawn by a financial institution payable at or through a bank
directly to the borrower, annually or upon termination of the account, whichever is earlier.
The bill would make a check issued pursuant to the above-described provision that is uncashed 90 calendar days after delivery canceled, as specified.

Current Bill Text

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