Mortgages: hazard insurance proceeds: interest.
Vote required
Majority
Fiscal committee
No
Appropriation
No
Current location
Enrolled
Take action
Record your position on this measure.
Create an account to take a stance, submit a written position, or contact your legislator.
Progress
Where this bill stands in the legislative process.
- Introduced
- Passed Assembly
- Passed Senate
- To Governor
- Became Law
Overview
This bill changes how financial institutions must handle hazard insurance proceeds held for homeowners rebuilding after a disaster. Currently, they must pay at least 2% simple interest on these funds in a ‘loss draft account.’ This bill allows them to either credit the interest to the account or pay it directly to the borrower via check, electronic transfer, or another agreed-upon method. Uncashed checks after 90 days will be canceled, and the funds will be returned to the account.
Key provisions
- Financial institutions can now pay hazard insurance proceeds directly to borrowers instead of solely relying on loss draft accounts.
- Payments to borrowers must be made by check, electronic funds transfer, or a mutually agreed-upon method.
- Uncashed checks related to these payments will be canceled after 90 days.
- The minimum interest rate on hazard insurance proceeds remains at 2% simple interest per annum.
- The bill clarifies the definition of ‘check’ for the purpose of this law.
- It prohibits financial institutions from charging fees for maintaining or disbursing hazard insurance proceeds.
- It allows for deposits into interest-bearing accounts at federally insured institutions.
- Interest accrues on existing funds in loss draft accounts as of the bill’s effective date.
Who is affected
- Homeowners
- Financial Institutions (banks, savings and loan associations, credit unions)
Bill text
Read the latest version inline or switch to a previous version.
Text extraction is in progress. View the official source.
Sponsors
Official sponsors from legislative records.
1 on record
Primary sponsor
Arguments
Reasons offered for and against this legislation.
Arguments in favor
No arguments in favor have been submitted.
Submit yoursArguments opposed
No arguments opposed have been submitted.
Submit yours