California Orders Lenders to Report Handling of LA Fire Insurance Payouts
Key Takeaway: California has given banks and mortgage lenders two weeks to account for how they handled insurance payouts to 2025 LA fire survivors, after 160+ complaints of delays.
California has ordered banks, credit unions and mortgage lenders to report how they handled insurance payouts to survivors of the 2025 Los Angeles fires, after more than 160 complaints about delayed or disputed funds. The Business and Consumer Services Agency and the Department of Financial Protection and Innovation issued the order on 15 October 2026.
The order
The agencies are investigating whether lenders delayed payments to survivors, failed to provide a timely appeal process for decisions about releasing funds, or held insurance money even after a loan was fully paid, according to the Business and Consumer Services Agency.
Firms that fail to comply are subject to state enforcement under state and federal consumer protection laws. DFPI Commissioner KC Mohseni said the department will take action, including potentially through fines, against institutions that unnecessarily delay payouts, the Associated Press reported.
Governor Gavin Newsom said: “The last thing survivors need is unnecessary red tape, delays, and barriers standing between them and the relief they deserve,” according to the Business and Consumer Services Agency.
What lenders must disclose
The mandatory report requires lenders to share the size and distribution of insurance proceeds they received from insurers to pay wildfire survivors for property loss or damage, including personal property and living expenses.
Licensees must provide written explanations on whether all funds were disbursed, how long disbursements took, and the reasons for any delays or withheld funds as of 30 September 2026, according to the Business and Consumer Services Agency.
Lenders have two weeks to submit their reports, the Associated Press reported.
The complaints behind the order
Since January 2025, DFPI has received more than 160 confidential consumer complaints reporting delays or issues with insurance disbursements. The push follows reports from survivors about challenges accessing relief funds held in escrow by mortgage lenders during construction.
In July, Governor Newsom wrote to associations representing banks, credit unions and mortgage lenders about the concerns and directed the agencies to collect complaints about delayed or denied access to funds.
In August 2025, the governor signed AB 493, which requires financial institutions to pay interest on escrowed post-loss insurance funds while survivors await full disbursement, according to the Business and Consumer Services Agency.
Key Story Metrics
| Figure | Reported Status |
|---|---|
| **15 October 2026** | Order date (BCSA) |
| **160+** | Confidential complaints since January 2025 (DFPI, AP) |
| **2 weeks** | Deadline for lenders to submit reports (AP) |
| **30 September 2026** | As-of date for the required data (BCSA) |
| **August 2025** | AB 493 signed: interest on escrowed funds (BCSA) |
✓ Verified
• On 15 October 2026, BCSA and DFPI ordered financial institutions to report on handling of insurance payouts to Eaton and Palisades fire survivors (BCSA).
• DFPI received more than 160 confidential complaints about delays or issues with insurance disbursements since January 2025 (BCSA, AP).
• Lenders have two weeks to submit reports; the report must cover whether all funds were disbursed, how long disbursements took, and reasons for delays as of 30 September 2026 (BCSA, AP).
• AB 493, signed August 2025, requires lenders to pay interest on escrowed post-loss insurance funds (BCSA).
⚠ Still needs confirmation
• Whether any specific lender violated the law: the order opens an investigation, and an information demand does not establish a violation (BCSA).
Frequently Asked Questions
Which institutions does the order cover?
Banks, credit unions and mortgage lenders that handle insurance payouts to survivors of the Eaton and Palisades fires, according to the Business and Consumer Services Agency and the Associated Press.
What is the reporting deadline?
Lenders have two weeks from the 15 October 2026 order to submit their reports, the Associated Press reported.
Has any lender been found in violation?
No. The order is an information demand and an investigation; it does not establish that any lender committed a violation, according to the Business and Consumer Services Agency.
Editor’s note: This is an information demand and investigation; it does not establish that any lender committed a violation.
