California Gives Lenders Two Weeks to Report on Wildfire Payouts

California on Thursday gave mortgage lenders two weeks to report how they handled insurance payouts for people affected by the 2025 Los Angeles fires, after state regulators received more than 160 complaints about payment delays and other problems.

The California Business and Consumer Services Agency and the Department of Financial Protection and Innovation issued the order. Its stated aim is to speed the release of insurance proceeds lenders hold before passing them to homeowners. Banks and credit unions are among the mortgage lenders covered by the directive.

The Department of Financial Protection and Innovation has received more than 160 complaints since January 2025 involving delayed payments and other issues. The complaints come as survivors work to repair or rebuild properties damaged in the Eaton and Palisades fires. Those fires swept through Los Angeles-area neighborhoods in 2025 and destroyed more than 16,000 homes and other structures. Very few homes had been rebuilt by the time state officials announced the order.

Rohit Chopra, secretary of the California Business and Consumer Services Agency, called the continuing access problems “unacceptable.” He said some survivors had completed extensive insurance claim paperwork but still lacked money needed to rebuild.

In July, Gov. Gavin Newsom wrote to banking associations and credit unions after fire victims rebuilding their homes told the state that lenders sometimes held payouts for weeks. He directed state officials to collect information on lenders taking more than 10 days to distribute insurance proceeds without a plan to speed payments.

A law Newsom signed last year requires banks and credit unions to pay homeowners interest on insurance proceeds they hold. KC Mohseni, commissioner of the Department of Financial Protection and Innovation, said the department may take action, including fines, against banks and credit unions that unnecessarily delay payouts. Lenders have two weeks to submit their reports to the state.