While the Best Offense is a Good Defense, We Often Support Measures Too
by Kevin Gould, SVP/Director of Government Relations

Press release

Unfortunately, we often find ourselves writing about legislation that we oppose. This time, we are pleased to share an update on a few measures that we are proud to support. While regrettably much of our attention focuses on opposing measures that result in unintended negative consequences that frustrate our ability to support our customers and the communities we serve, or that create new compliance burdens and legal liability, we commonly do support measures that are good public policy.

Federally, the Secure and Fair Enforcement Banking Act, H.R. 1996, enables banks to provide financial services to legitimate cannabis-related businesses in states where it has been legalized. The measure, supported by CBA, will likely be considered along with more comprehensive measures, such as criminal justice reforms pertaining to cannabis-related convictions.

The Improving Corporate Governance Through Diversity Act of 2021, H.R. 1277 and S. 374, require certain issuers of securities to disclose the racial, ethnic, and gender composition of their boards of directors and executive officers, as well as the status of any of those directors and officers as a veteran. It also requires the disclosure of any plan to promote racial, ethnic, and gender diversity.

We are also supporting the Enhancing Credit Opportunities in Rural America Act, H.R. 1977, which removes taxation on income from farm real estate loans made by FDIC-insured institutions. This measure will provide meaningful credit opportunities for farmers.

At the state level, we are pleased to support measures providing relief to those experiencing a financial hardship due to the COVID-19 pandemic. AB 80 conforms to the federal tax treatment of Paycheck Protection Program loans and Economic Injury Disaster Loan grants with two exceptions: entities that are publicly traded companies and taxpayers that did not experience at least a 25 percent reduction in gross receipts, as specified by federal law. We advocated for the enactment of AB 88 exempting Golden State Stimulus payments from garnishment and providing a safe-harbor from liability and regulatory scrutiny for financial institutions that attempt in good-faith to comply with the law.

While on the topic of pandemic-related legislation, in the human resources space, SB 336 requires local public health agencies to post orders at least 72 hours prior to enforcement, allowing employers necessary time to comply. Throughout the COVID-19 pandemic, public health requirements evolved at an unprecedented pace, leaving employers to dedicate significant resources monitoring and interpreting changes. Another measure, SB 657 provides relief by permitting employers to distribute workplace notifications by email in situations where they must physically display notifications. The pandemic brought to light complications that employers face when their employees telecommute. This change will be helpful beyond the crisis.

California’s Uniform Electronic Transactions Act (UETA) will be modernized through SB 361 by allowing for vehicle financing contracts to be delivered and signed electronically. This will facilitate the  execution of contracts when borrowers cannot be physically present. Currently, UETA, which is California’s version of the federal E-SIGN ACT, expressly prohibits conditional sales and lease contracts for motor vehicles.

The California Investment and Innovation Program established by SB 625 and administered by the California Infrastructure and Economic Development Bank, provides grants to qualified community development financial institutions. The program will be supported by a $71 million budget appropriation which CBA also supported.

We are supporting several residential real property related measures. AB 633 adopts the Uniform Law Commission’s model Uniform Partition of Heirs Property Act which establishes important procedural protections when partitioning real property held as tenancy-in-common where there is no agreement in a record binding all the co-tenants which governs the partition of the property and where one or more of the co-tenants acquired title from a relative. The measure endeavors to preserve family wealth in circumstances where there is not an estate plan. In addition, AB 948 requires that real estate sales contracts include a notice that any appraisal of the property must be unbiased, objective and not influenced by improper or illegal considerations and establishes important consumer protections in circumstances where there is discrimination in appraisals. The measure requires that a financial institution also provide this notice when refinancing a first lien purchase money loan secured by residential real property containing no more than four dwelling units.

The association is also continuing to advocate for needed reforms to Property Assessed Clean Energy Finance (PACE) lending. AB 790 applies California’s Consumer Legal Remedies Act relating to home solicitations of PACE loans that encumber the primary residence of a senior citizen for purposes of paying for home improvements where such transactions are part of a pattern or practice that violates existing law PACE program provisions. Finally, SB 476 prohibits a program administrator offering a PACE loan from executing an assessment contract or commencing work until an energy audit has been conducted. PACE lending relies, in part, on un-solicited door-to-door sales to consumers that may otherwise not be in the market for PACE-related improvements to their real property. The door-to-door sales methodology and the near immediate requirement to enter into a binding contract that encumbers the real property may create undue pressure for senior citizens and representations have been made as to the purported savings that may result from the efficiency improvement which are characterized by salespersons as offsetting the cost of the debt obligation.

We appreciate the opportunity to share examples of measures we support that provide critical financial relief to individuals impacted by the pandemic, enhance consumer protections, and modernize and simplify the law.