SB 1380: Mortgage brokers. | Digital Democracy

Current Status:

In Progress

(2026-03-04: Referred to Com. on RLS.)

Introduced

In Committee

Awaiting First Chamber Vote

Passed First Chamber

In Committee

Awaiting Second Chamber Vote

Passed Second Chamber

Enacted

What does this bill do?

This bill makes minor wording and citation updates to Civil Code section 2923.1 and confirms that a mortgage broker who provides brokerage services is a fiduciary of the borrower — meaning the broker must put the borrower’s financial interest ahead of the broker’s own. It also updates definitions and statute names for licensed persons, mortgage brokers, mortgage brokerage services, and residential mortgage loans without changing the substance of their duties.

Version:

Existing law defines mortgage brokers, provides that a mortgage broker who provides brokerage services to a borrower is a fiduciary of that person, and makes a violation of the brokers fiduciary duties to that person a violation of the brokers license law.

This bill would make nonsubstantive changes to those provisions.

Version:

The people of the State of California do enact as follows:SECTION 1.Section 2923.1 of the Civil Code is amended to read:2923.1.

(a)A mortgage broker providing mortgage brokerage services to a borrower is the fiduciary of the borrower, and any a violation of the brokers fiduciary duties shall be a violation of the mortgage brokers license law. This fiduciary duty includes a requirement that the mortgage broker place the economic interest of the borrower ahead of his or her the brokers own economic interest. A mortgage broker who provides mortgage brokerage services to the borrower owes this fiduciary duty to the borrower regardless of whether the mortgage broker is acting as an agent for any other party in connection with the residential mortgage loan transaction.

(b)For purposes of this section, the following definitions apply:

(1)Licensed person means a real estate broker licensed under the Real Estate Law (Part 1 (commencing with Section 10000) of Division 4 of the Business and Professions Code), a finance lender or broker licensed under the California Finance Lenders Financing Law (Division 9 (commencing with Section 22000) of the Financial Code), a residential mortgage lender licensed under the California Residential Mortgage Lending Act (Division 20 (commencing with Section 50000) of the Financial Code), a commercial or industrial bank organized under the Banking Financial Institutions Law (Division 1 (commencing with Section 99) of the Financial Code), a savings association organized under the Savings Association Law (Division 2 (commencing with Section 5000) of the Financial Code), and a credit union organized under the California Credit Union Law (Division 5 (commencing with Section 14000) of the Financial Code).

(2)Mortgage broker means a licensed person who provides mortgage brokerage services. For purposes of this section, a licensed person who makes a residential mortgage loan is a mortgage broker, and subject to the requirements of this section applicable to mortgage brokers, only with respect to transactions in which the licensed person provides mortgage brokerage services.

(3)Mortgage brokerage services means arranging or attempting to arrange, as exclusive agent for the borrower or as dual agent for the borrower and lender, for compensation or in expectation of compensation, paid directly or indirectly, a residential mortgage loan made by an unaffiliated third party.

(4)Residential mortgage loan means a consumer credit transaction that is secured by residential real property that is improved by four or fewer residential units.

(c)The duties set forth in this section shall not be construed to limit or narrow any other fiduciary duty of a mortgage broker.

Date	Status
Mar 4, 2026	Referred to Com. on RLS.
Feb 23, 2026	From printer. May be acted upon on or after March 23.
Feb 23, 2026	Read first time.
Feb 20, 2026	Introduced. To Com. on RLS. for assignment. To print.

Authors shown for version:
Introduced (2/20/2026)