Sacramento Update September 2024
Legislators are in the final week of the 2024 session and are working late into the evenings to pass the hundreds of bills before them on the Senate and Assembly floors. CCBN has been busy advocating to protect the interests of community banks and will continue to do so until the Legislature adjourns on August 31.
CCBN secured a major victory for state-chartered banks via an amendment to SB 278 (Dodd), which requires financial institutions to establish “emergency financial contact” programs for elder and dependent adults and requires financial institutions to delay transactions by these accountholders by three days if there is a reasonable suspicion of financial abuse. Due to concerns regarding preemption for federally chartered banks, CCBN secured an amendment to SB 278 that specifies that if the bill is found not to apply to federally chartered banks, it won’t apply to state-chartered institutions either.
In addition to SB 278, CCBN is supporting AB 2618 (Chen), which extends, until January 1, 2031, the authority for a local agency to invest up to 50% (rather than 30%) of its surplus funds in deposits at a commercial bank, savings bank, savings and loan association, or credit union. Until January 1, 2026, statute allows, but does not mandate, a local agency to deposit up to 50 percent of their overall surplus funds with a depository institution that uses reciprocal deposits as a means of collateralization. These local agency funds may be deposited into a certificate of deposit or a demand deposit account. Using reciprocal deposits allows the depository institution to accept a deposit from a local agency exceeding the Federal Deposit Insurance Corporation or National Credit Union Association standard insurance limit of $250,000 (per depositor) while maintaining full insurance coverage over the entirety of the local agency's deposit. AB 2618 maintains flexibility for local agencies and banks as they work together in managing local agency funds and in serving their communities.
After the Legislature adjourns on August 31, the Governor has until September 30 to sign or veto bill that make it to his desk.