AB 1278
Mortgages: hazard insurance proceeds: interest.
Vote required
Majority
Fiscal committee
No
Appropriation
No
Current location
Judiciary
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Sign in to take action- Introduced
- Passed Assembly
- Passed Senate
- To Governor
- Became Law
Bill overview
This bill changes how financial institutions must handle hazard insurance proceeds held for homeowners after a property damage event. Currently, they must pay at least 2% simple interest on these funds in a ‘loss draft account.’ This bill allows institutions to either credit the interest to the account or pay it directly to the homeowner via check, electronic transfer, or another agreed-upon method. Uncashed checks after 90 days will be canceled at no cost to the borrower, and the interest rate must remain at least 2% per annum.
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