Assembly committee advances AB 801 to create a California Community Reinvestment Act

Assemblymember Bonta introduced AB 801, a bill to establish a California Community Reinvestment Act, and the Assembly Banking and Finance Committee voted to pass the bill as amended and refer it to the Assembly Appropriations Committee.

The bill’s author said AB 801 would impose a continuing, affirmative obligation on covered financial institutions — including state‑chartered banks, credit unions, residential mortgage lenders and money transmitters — to meet the credit and service needs of low‑ and moderate‑income communities and communities of color where the institutions do substantial business. The bill would direct the Department of Financial Protection and Innovation (DFPI) to conduct a disparity study and to evaluate and rate covered institutions’ community investments; institutions receiving low ratings in two consecutive examinations could be barred from receiving state funds or contracts and subject to penalties.

The bill’s backers told the committee they expect the state CRA to drive new capital to underserved areas. Paulina Gonzalez Brito, chief executive officer of RISE Economy, said, “AB 801 would unlock billions of dollars annually to help our state fund the housing development it needs,” and asked for a high vote. Tate Hill, chief executive officer of AccessPlus Capital, described the proposal as a “smart future‑facing solution” that would expand reinvestment obligations and create a Community Reinvestment Fund.

Supporters included labor and affordable‑housing groups (SEIU California; California Housing Partnership), consumer advocates (Consumer Federation of California; the Greenlining Institute) and community development financial institutions that said fintechs and nonbank lenders now originate a large share of mortgages and are not covered by the federal Community Reinvestment Act.

Opposition came from industry groups that warned the state measure would create costs and regulatory burdens. Indira McDonald of the California Mortgage Bankers Association argued mortgage banks were excluded from the federal CRA because they do not take deposits and instead fund loans through credit facilities and the secondary market. Robert Wilson of the California Credit Union League said subjecting member‑owned, nonprofit credit unions to a state CRA would be “unnecessary, costly to implement, and subject credit unions to unnecessary risk.”

Committee members asked about implementation and fiscal impacts on DFPI. A committee exchange cited a Legislative Analyst’s Office projection about the DFPI’s financial status; the author said the oversight structure would provide clarity about where investments are going and allow the state to identify potential steering or discriminatory practices. Several members pressed the author on tailoring requirements for smaller credit unions and on possible incentives the state could offer institutions that exceed investment benchmarks.

After debate, the committee took a voice/roll call vote. The clerk recorded Valencia, Fong, Krell and Soria voting yes; Dixon voting no; and Chen, Michelle Rodriguez and Blanca Rubio recorded as not voting. The motion passed and AB 801 was referred to the Appropriations Committee; the clerk left the roll open for absent members.

Assemblymember Bonta closed by saying the bill “ensures that modern financial institutions operating in California are held to the same community investment standards, helping close long standing racial and economic gaps in financial access.”

Votes at a glance from this meeting are included in the companion article summarizing committee votes and consent items.