October 15, 2026

California Orders Financial Institutions to Report Data on Insurance Payouts to LA Fires Survivors, Investigates Reports of Delayed and Denied Payments

SACRAMENTO – In California’s latest action to support survivors of the Eaton and Palisades fires, the Business and Consumer Services Agency (BCSA) and the Department of Financial Protection and Innovation (DFPI) today ordered financial institutions to report on how they are handling the disbursement of insurance payouts to assist in rebuilding. Specifically, California is investigating whether lenders have 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. These firms may be subject to enforcement under state and federal consumer protection laws.

The push comes after survivors reported challenges accessing relief funds due to delayed release of insurance funds held in escrow by their mortgage lenders during construction. In July, Governor Newsom wrote to associations representing banks, credit unions, and mortgage lenders about these concerns and directed BCSA and DFPI to collect complaints about delayed or denied access to funds.

“Survivors’ ability to access the insurance coverage they’ve paid for is foundational to recovery. Financial institutions have a critical role to play as families move from immediate stabilization to rebuilding their homes, their businesses, and their lives. The last thing survivors need is unnecessary red tape, delays, and barriers standing between them and the relief they deserve,” said Governor Gavin Newsom.

“It’s unacceptable that after running through a gauntlet of paperwork to file insurance claims, some wildfire survivors still have not gotten access to the funds they need to rebuild. California is committed to ensuring that all Los Angeles fire survivors receive fair and timely insurance payouts, and we will hold firms accountable for failures that impede survivors’ access to the money they are owed,” said California Business and Consumer Services Secretary Rohit Chopra.

“Survivors of such devastating tragedy should not be forced to wait while financial institutions drag their feet and fail to release post-loss insurance funds owed to homeowners,” said Department of Financial Protection and Innovation Commissioner KC Mohseni. “We will not hesitate to take strong action against an institution that has needlessly delayed payments or broken our laws, and this data is an additional useful tool. It is critical that as homeowners and families continue to rebuild and recover, lenders do not stand in their way.”

The mandatory report requires lenders to share information regarding the size and distribution of insurance proceeds they received from insurance companies to pay wildfire survivors for property loss or damage, including personal property and living expenses. Licensees must provide written explanations to BCSA and DFPI as to whether all funds were disbursed to survivors, how long the disbursements took, and reasons for any delays or withheld funds as of September 30, 2026.

Since January 2025, DFPI has received more than 160 confidential consumer complaints reporting delays or issues with insurance disbursements. DFPI has resolved many of these complaints and continues to take action to ensure that all lenders are complying with the law, proactively supporting survivors as they move into the construction phase of recovery.

Relatedly, in August 2025, the Governor signed AB 493 to require that financial institutions pay interest on escrow funds while survivors await their full insurance disbursement. The new law explicitly required lenders to pay homeowners the interest earned on post-loss insurance payouts in the same way they do for other escrowed property expenses.

More information about mortgage relief for LA fire survivors can be found here. Consumers who believe a financial institution or financial service provider has violated the law can submit a confidential complaint to DFPI here.

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California’s new Business and Consumer Services Agency is working to protect consumers and lower costs by strengthening oversight, improving coordination across departments, and ramping up enforcement actions across sectors that touch the daily lives of Californians. As the federal government weakens consumer protection and hurts Americans by engaging in corruption and backsliding, California is leading the way to create a strong backstop and deliver a fair economy for all.

The Department of Financial Protection and Innovation protects consumers, regulates financial services, and fosters responsible innovation. DFPI protects consumers by establishing and enforcing financial regulations that promote transparency and accountability. We empower Californians to access a fair and equitable financial marketplace through education and by preventing potential risks, fraud, and abuse.

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