Assembly committee advances state Community Reinvestment Act bill to Appropriations

Assemblymember Bonta’s measure to create a California Community Reinvestment Act (AB 801) cleared the Assembly Banking and Finance Committee on a voice/roll vote and was referred, as amended, to the Committee on Appropriations.

The bill seeks to establish a state-level Community Reinvestment Act requiring covered financial institutions to meet the credit and investment needs of low- and moderate-income communities and communities of color, and directs the Department of Financial Protection and Innovation (DFPI) to conduct a disparity study and evaluate institutions’ community investments. “I’m pleased to present my bill AB 801, which seeks to create a state level Community Reinvestment Act,” Assemblymember Bonta said in opening remarks.

Supporters told the committee the bill would close gaps left by the federal statute. “The federal CRA has driven billions of dollars into historically underserved communities,” Paulina Gonzalez Brito, chief executive officer of Rise Economy, said. She told the committee Rise Economy’s alliance helped secure “$116 billion in the last five years alone” through federal CRA activity and argued a state law would extend oversight to nonbank lenders and fintech firms now prominent in mortgage markets.

Tate Hill, chief executive officer of AccessPlus Capital, a community development financial institution (CDFI), said that expanding state-level obligations "is a smart future-facing solution" that would direct funds toward affordable housing, small-business lending and climate-resilient investments in underserved regions such as the Central Valley. Several community-development organizations, labor groups and housing advocates—including SEIU California, the California Housing Partnership, the Greenlining Institute and others—registered support.

Industry witnesses raised objections about scope, cost and regulatory reach. Indira McDonald of the California Mortgage Bankers Association said mortgage banks historically were not subject to the federal CRA because they are nondepository institutions that “do not collect deposits from local communities,” and argued a state mandate would impose costs and duplicate oversight. McDonald cited an Urban Institute review she said showed independent mortgage lenders have grown market share and perform well serving low- and moderate-income borrowers.

Robert Wilson of the California Credit Union League testified in respectful opposition, saying credit unions already serve underserved members and that the bill’s reporting and exam structure would be “unnecessarily costly to implement” for member‑owned cooperatives. Wilson warned of increased back‑office costs for some institutions and suggested potential downstream effects on DFPI assessments and licensee fees.

Committee members asked for clarifications about small-credit-union carveouts, tiers for examinations and whether the statute should pair regulatory obligations with state incentives. One member noted seven states and the District of Columbia have enacted state-level CRAs and asked whether other states include carve-outs for smaller institutions. Bonta and witnesses signaled openness to continued negotiations on tiering and incentives while emphasizing the bill’s purpose to create a framework for accountability and to study disparities.

The committee vote transcript shows the motion was approved as amended and referred to Appropriations; the roll was left open for additional members to sign on. Committee staff recorded a vote sequence during the session in which members recorded as voting yes included Chair Valencia, Assemblymembers Fang, Krell and Thiago Soria; Assemblymember Dixon is recorded as voting no; several members were recorded as not voting during that roll call. The committee statement accompanying the action notes the bill was passed as amended and moved forward for fiscal review.

Next steps: AB 801 will be considered by the Assembly Appropriations Committee; DFPI implementation items cited in testimony include a required disparity study and an examination regime that supporters said would allow state officials to assess whether investments reach communities of color and low- and moderate-income neighborhoods.

Votes at a glance: AB 801 — motion to pass as amended and refer to Appropriations (roll left open).