Governor Newsom Signs AB 801 Into Law, Strengthening California’s Protections Against Mortgage Discrimination

New California law will hold financial institutions accountable as the federal government rolls back anti-discrimination enforcement

Sacramento, CA - On September 31, Governor Newsom signed into law AB 801, the California Fair Lending Examination Act, authored by Assemblymember Mia Bonta and sponsored by The Greenlining Institute.

AB 801 strengthens California's ability to identify and address discrimination in mortgage lending by requiring the California Department of Financial Protection and Innovation (DFPI) to examine banks, credit unions, and licensed independent mortgage companies under its jurisdiction for compliance with state and federal fair lending laws at least once every four years.

This new law comes at a critical moment. Communities of color continue to face persistent disparities in access to mortgage credit and the costs of homeownership, while the federal government is weakening tools used to identify and address lending discrimination.

Strong state oversight is especially important for independent mortgage companies, which have become major sources of mortgage credit for communities of color. As more lending has shifted outside traditional banks, California's approach to oversight must keep pace.

"While the Trump administration guts federal fair lending enforcement and lets big banks and corporate lenders off the hook, California is holding the line. With AB 801 now law, every bank, credit union, and mortgage company under DFPI's watch will be regularly examined for compliance with our fair lending laws, because no one should pay more for a mortgage because of their background," said Assemblymember Mia Bonta. "I'm grateful to Governor Newsom for signing this bill, and to our coalition partners who fought to hold corporate lenders accountable in the face of Washington's rollback of consumer protections."

"For communities of color, weak oversight of our financial institutions means paying more for the opportunity to own a home, or being shut out altogether. Governor Newsom's signature on AB 801 is a critical step towards holding lenders accountable to anti-discrimination laws and ensuring fair access to homeownership for communities of color," said Max Vargas, President and CEO of The Greenlining Institute. "We thank Governor Newsom for signing this bill, Assemblymember Bonta for her leadership, and our partners across the state who supported us in the push to get AB 801 signed into law. We look forward to working with the DFPI to ensure implementation creates real accountability and real access for borrowers of color throughout California."

With AB 801 now into law, the focus shifts to strong implementation. Effective examinations must be rigorous enough to identify emerging patterns of discrimination, responsive to changes in lending practices and technology, and backed by meaningful accountability when violations occur. California now has an opportunity to set a strong national standard for fair lending oversight and enforcement.