California passed a bill requiring payment of interest on funds in a loss draft account. Under the bill, a servicer must pay at least 2% interest per year on the funds held in the loss draft account. The interest must be credited to the borrower’s account annually or upon termination of the account, whichever is earlier. In addition, a servicer may not impose any fee or charge in connection with maintenance or disbursement of proceeds that would result in an interest rate of less than 2% being paid on the funds. The bill went into effect August 29, 2025.
Click to view the California AB-493: https://www.tenaco.com/wp-content/uploads/2025/10/CA-AB-493-08-30-25.pdf
