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Panel advances bill to require interest on escrowed post-loss insurance payouts
Summary
The Senate Committee on Banking and Financial Institutions voted to send Assembly Bill 493 to Senate Judiciary after approving a measure to require lenders to pay interest (at least 2%) on insurance payouts held in escrow following a loss, closing a court-created exemption for such funds.
The Senate Committee on Banking and Financial Institutions voted to refer Assembly Bill 493, authored by Assemblymember Harbedian, to the Senate Judiciary Committee after testimony on changes to how lenders handle post-loss insurance payouts.
Assemblymember Harbedian told the committee that recent California court decisions have allowed lenders to retain interest on insurance payouts held in escrow after a loss. He said AB 493 ‘‘seeks to support and protect homeowners by eliminating the exemption on post…
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