California Orders Lenders to Report Wildfire Insurance Payouts
California regulators ordered 800 mortgage lenders to report their handling of insurance payouts for survivors of the 2025 Los Angeles-area Palisades and Eaton fires.
The California Business and Consumer Services Agency and the Department of Financial Protection and Innovation ordered approximately 800 mortgage lenders and servicers to report their management of insurance payouts for survivors of the January 2025 Palisades and Eaton wildfires. The order, issued October 15, requires institutions to submit data by October 29 regarding the size and distribution of proceeds, disbursement timelines, and reasons for any withheld funds.
Gavin Newsom, the Governor of California, directed the data collection following more than 160 consumer complaints regarding payment delays. Regulators are specifically investigating lenders that took longer than 10 business days to distribute proceeds without a speed-up plan or failed to provide expedited appeals. The January 2025 fires destroyed between 11,000 and 16,000 structures in Los Angeles County, including areas in Pacific Palisades and Altadena.
To further assist survivors, Newsom signed Assembly Bill 493, which mandates that lenders holding insurance proceeds pay homeowners at least 2% annual simple interest. Lenders found in violation of state regulations may face state and federal enforcement. The California Mortgage Bankers Association stated it would work with regulators and encourage its members to improve payment efficiency and review their appeal processes to accelerate rebuilding efforts.
