California orders lenders to report on insurance payouts for LA fire survivors

California officials have ordered mortgage lenders, including banks and credit unions, to report on their handling of insurance payouts for survivors of the 2025 Los Angeles-area fires. The California Business and Consumer Services Agency and the Department of Financial Protection and Innovation (DFPI) aim to accelerate the distribution of insurance proceeds held by lenders to homeowners.

The DFPI has received over 160 complaints regarding payment delays or related issues since January 2025. Lenders have been given two weeks to submit their reports. This action follows reports that survivors of the Palisades and Eaton fires, which destroyed more than 16,000 structures, have faced significant delays in accessing funds necessary for rebuilding.

Governor Gavin Newsom previously directed the state to collect data on lenders that take longer than 10 days to distribute proceeds without a plan to expedite them. Additionally, a law passed last year requires banks and credit unions to pay interest on insurance payments they hold.