The Consumer Credit Reporting Agencies Act imposes obligations on consumer credit reporting agencies, users of consumer credit reports, and furnishers of credit information, and establishes remedies for a consumer who suffers damages resulting from a violation of those provisions.

Existing law makes specified provisions of the act applicable to an escrow rating service, as defined, requires an escrow agent rating service to establish policies and procedures to safeguard personally identifiable information obtained from an escrow agent, and provides that an escrow agent is a consumer for purposes of those provisions. Existing law repeals those provisions of the act applicable to escrow agent rating services and escrow agents on January 1, 2027.

This bill would extend the operation of those provisions indefinitely.

The Consumer Credit Reporting Agencies Act imposes obligations on consumer credit reporting agencies, users of consumer credit reports, and furnishers of credit information, and establishes remedies for a consumer who suffers damages resulting from a violation of those provisions.

Existing law makes specified provisions of the act applicable to an escrow rating service, as defined, requires an escrow agent rating service to establish policies and procedures to safeguard personally identifiable information obtained from an escrow agent, and provides that an escrow agent is a consumer for purposes of those provisions. Existing law repeals those provisions of the act applicable to escrow agent rating services and escrow agents on January 1, 2027.

This bill would extend the operation of those provisions indefinitely.

The Consumer Credit Reporting Agencies Act imposes obligations on consumer credit reporting agencies, users of consumer credit reports, and furnishers of credit information, and establishes remedies for a consumer who suffers damages resulting from a violation of those provisions.

Existing law makes specified provisions of the act applicable to an escrow rating service, as defined, requires an escrow agent rating service to establish policies and procedures to safeguard personally identifiable information obtained from an escrow agent, and provides that an escrow agent is a consumer for purposes of those provisions. Existing law repeals those provisions of the act applicable to escrow agent rating services and escrow agents on January 1, 2027.

This bill would extend the operation of those provisions indefinitely.

SENATE THIRD READING

STR Bill Id:SB 946

Author:(Seyarto)

As Introduced Ver:February 2, 2026

Majority vote

SUMMARY

Existing law requires an escrow agent rating service to establish policies and procedures to safeguard personally identifiable information obtained from an escrow agent and provides that an escrow agent is a consumer for purposes of those provisions This bill will remove the sunset date of this requirement, extending the requirement indefinitely.

Specifically, this bill:

Repeals Section 1785.28.6 of the Civil Code.

Major Provisions

Repeal the sunset on the chapter which provides regulations for escrow rating services.

COMMENTS

1. Background

Escrow services may legally be performed in California under a variety of different laws, administered by a variety of different regulators. Escrow may be performed by persons licensed under the Escrow Law, administered by the Department of Financial Protection and Innovation; under the Real Estate Law, administered by the Department of Real Estate; under the Insurance Law, administered by the Department of Insurance; and may also be performed by attorneys and depository institutions. Escrow is also performed differently in different regions of the state.  In northern California, title companies typically perform both title and escrow services; in southern California, it is more common for title companies to handle title services and for independent escrow companies to handle escrow. In all cases, however, the mortgage lenders involved in the transactions seek to ensure that the third parties they use to perform escrow services operate in full accordance with the law.  

In 2012 the Consumer Financial Protection Bureau (CFPB) released guidance to supervised banks and nonbanks about overseeing their business relationships with service providers in a way that ensures compliance with federal consumer financial laws. To clarify its regulatory expectations, the CFPB has issued two bulletins on the topic.^[1] The guidance stated that the CFPB expects supervised banks and nonbanks to have an effective process for managing the risk of service provider relationships. To limit the potential for statutory or regulatory violations and related consumer harms, supervised banks and nonbanks should take steps to ensure that their business arrangements with service providers do not present unwanted risks to consumers. The guidance provided the following minimum recommended steps:

1. Conducting thorough due diligence to verify that the service provider understands and is capable of complying with federal consumer financial law; 
2. Requesting and reviewing the service provider's policies, procedures, internal controls, and training materials to ensure that the service provider conducts appropriate training and oversight of employees or agents that have consumer contact or compliance responsibilities; 
3. Including in the contract with the service provider clear expectations about compliance, as well as appropriate and enforceable consequences for violating any compliance-related responsibilities, including engaging in unfair, deceptive, or abusive acts or practices; 
4. Establishing internal controls and on-going monitoring to determine whether the service provider is complying with federal consumer financial law; and 
5. Taking prompt action to address fully any problems identified through the monitoring process, including terminating the relationship where appropriate.

As a result, third party risk management companies emerged to provide a screening service for supervised banks and nonbanks. At the end of 2012, the then named Department of Corporations provided a Commissioner's Bulletin No: 001-12, The bulletin notes that the Department had learned that some third party risk management companies were requiring potential service providers to pay a fee in order to be pre-screen by the companies, and to appear on a list of "approved" providers, in violation of several laws regarding "pay-to-play" or kickbacks.

1. Current Protections for Escrow Agents

In 2013, California enacted a law intended to protect escrow agents from misuse of the data collected by escrow agent rating services. The underlying rationale of the law is that escrow agents should have similar rights as consumers in reviewing the information collected about them and the ability to request corrections of any inaccuracies.

Functionally, the implementation of this statute has deviated from its original intent. While envisioned as a mechanism for escrow professionals to inspect their records, the law has instead served to limit the volume of data gathered. During the 2021 extension of the sunset provision, the sponsor reported that agents frequently invoke these protections to decline providing sensitive identifiers, such as social security numbers, to rating entities.^[2]

This bill makes permanent the current protections for escrow agents' data.

1. Prior and Related Legislation
   1. AB 1169 (Daly) Chapter 380, Statutes of 2013 extended certain provisions of the California Consumer Credit Reporting Agencies Act to apply to escrow agent rating services with a sunset of January 1, 2017.
   2. AB 2416 (Wilk) Chapter 135, Statutes of 2016 extended the sunset date of the law enacted by AB 1169 to January 1, 2022.
   3. SB 360 (Wilk) Chapter 105, Statutes of 2021 extended the sunset date of the law enacted by AB 2416 to January 1, 2027.

According to the Author

SB 946 preserves important consumer-reporting protections for escrow agents by removing a sunset date that would otherwise repeal them on January 1, 2027. Current law protects escrow agents through the Consumer Credit Reporting Agencies Act (CCRAA). This includes the right to see their information, challenge errors, fix mistakes, and protect their personal data when they're being evaluated. These protections were created because lenders started using third-party rating services to decide which escrow companies they'd work with. Sometimes these services used wrong or old information. Escrow professionals were also being pressured to share very sensitive personal information just to keep working. Since these protections started, they've worked well with no problems. They're still needed today. SB 946 simply makes these protections permanent instead of temporary. Lenders can still check and approve escrow agents as before.

Arguments in Support

"Escrow agent rating services are used by lenders and other financial institutions to evaluate escrow companies, often using public and private information and scoring systems similar to consumer credit reports. Concerns have arisen that these services may rely on inaccurate or outdated information, potentially harming escrow professionals without giving them a meaningful opportunity to review or correct the information being reported."

"Existing law helps address these concerns by treating escrow agents similarly to consumers under the CCRAA, allowing them to access reports prepared about them, dispute and correct inaccuracies, and benefit from safeguards for personally identifiable information. These protections also help ensure that escrow professionals are not pressured to provide sensitive personal data without appropriate protections."

"However, the current law is scheduled to sunset on January 1, 2027. SB 946 simply repeals that sunset provision so that these important safeguards remain in place. By doing so, the bill maintains a balanced framework that allows lenders to continue conducting appropriate due diligence on escrow providers while ensuring fairness, accuracy, and privacy protections for escrow professionals" -- California Escrow Association

Arguments in Opposition

None received. Last verified 6/23/2026

FISCAL COMMENTS

The following is from the analysis of the Assembly Committee on Appropriations.

Minor and absorbable costs to the Department of Financial Protection and Innovation, which licenses escrow agents under the Escrow Law.

Ongoing cost pressures of an unknown amount, potentially in excess of $150,000, to the courts in additional workload by continuing certain Act provisions, including the provision allowing an escrow agent to bring an action for damages and other relief against an escrow rating service that fails to safeguard the agent's personally identifiable information (General Fund (GF) or Trial Court Trust Fund (TCTF)). It is unclear how many actions may be brought statewide and how much court time may be needed to resolve each case, but scams targeting escrow agents are not uncommon and it generally costs approximately $1,000 to operate a courtroom for one hour. Although courts are not funded on the basis of workload, increased pressure on staff and the TCTF may create a demand for increased court funding from the GF. The state budget provides annual GF backfills to the TCTF to offset revenue reductions, totaling approximately $117.3 million in fiscal year 2025-26.

VOTES

SENATE FLOOR: 33-0-7

YES: Archuleta, Arreguín, Ashby, Blakespear, Cabaldon, Caballero, Cervantes, Choi, Cortese, Dahle, Durazo, Gonzalez, Grayson, Grove, Jones, Laird, Limón, McGuire, McNerney, Menjivar, Ochoa Bogh, Pérez, Reyes, Richardson, Rubio, Seyarto, Smallwood-Cuevas, Strickland, Umberg, Valladares, Wahab, Weber Pierson, Wiener

ABS, ABST OR NV: Allen, Alvarado-Gil, Becker, Hurtado, Niello, Padilla, Stern

ASM BANKING AND FINANCE: 8-0-1

YES: Valencia, Chen, Dixon, Fong, Krell, Michelle Rodriguez, Blanca Rubio, Soria

ABS, ABST OR NV: Schiavo

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Hoover, Arambula, Calderon, Caloza, Dixon, Fong, Mark González, Krell, Pacheco, Pellerin, Sharp-Collins, Solache, Ta, Tangipa

UPDATED

VERSION: February 2, 2026

CONSULTANT: Desiree Nguyen Orth / B. & F. / (916) 319-3081 FN: 0003191

1. Bulletin 2012–03 (https://files.consumerfinance.gov/f/documents/201204_cfpb_bulletin_service-providers.pdf) Last visited 6/15/2026 and Bulletin 2016-02 (https://files.consumerfinance.gov/f/documents/102016_cfpb_OfficialGuidanceServiceProviderBulletin.pdf ) Last visited 6/15/2026. ↑

2. See analysis of the Senate Banking and Financial Institutions Committee of SB 360, as heard on March 10, 2021. ↑

Date of Hearing: August 5, 2026

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

SBPCA Bill Id:SB 946

Author:(Seyarto) – As Introduced Ver:February 2, 2026

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill repeals the sunset date for certain provisions of the Consumer Credit Reporting Agencies Act (Act) applicable to an escrow rating service, thus making those provisions operative indefinitely.

FISCAL EFFECT:

1. Minor and absorbable costs to the Department of Financial Protection and Innovation, which licenses escrow agents under the Escrow Law.
2. Ongoing cost pressures of an unknown amount, potentially in excess of $150,000, to the courts in additional workload by continuing certain Act provisions, including the provision allowing an escrow agent to bring an action for damages and other relief against an escrow rating service that fails to safeguard the agent’s personally identifiable information (General Fund (GF) or Trial Court Trust Fund (TCTF)). It is unclear how many actions may be brought statewide and how much court time may be needed to resolve each case, but scams targeting escrow agents are not uncommon and it generally costs approximately $1,000 to operate a courtroom for one hour. Although courts are not funded on the basis of workload, increased pressure on staff and the TCTF may create a demand for increased court funding from the GF. The state budget provides annual GF backfills to the TCTF to offset revenue reductions, totaling approximately $117.3 million in fiscal year 2025-26.

COMMENTS:

1. Purpose. According to the author:

Current law protects escrow agents through the [Act]. This includes the right to see their information, challenge errors, fix mistakes, and protect their personal data when they’re being evaluated. These protections were created because lenders started using third-party rating services to decide which escrow companies they’d work with. Sometimes these services used wrong or old information. Escrow professionals were also being pressured to share very sensitive personal information just to keep working. Since these protections started, they’ve worked well with no problems. They’re still needed today. SB 946 simply makes these protections permanent instead of temporary.

This bill is sponsored by the California Escrow Association and supported by the Escrow Institute of California.

1. Escrow Services. Escrow agents serve as neutral third parties who manage legal documents and funds that change hands during a complex and high value financial transaction, such as a real estate transaction involving buyers, sellers, agents, and lenders. Providers of escrow services include escrow companies that specialize in real estate transactions, as well as banks and attorneys that engage in a broader range of activities.

The parties to a real estate transaction must be able to trust that their escrow provider safeguards and transmits funds and legal documents correctly. Additionally, as a regulated financial institution, a mortgage lender has a legal obligation to vet such third-party service providers. An escrow agent rating service helps lenders and other parties by investigating escrow companies and their employees to verify compliance with licensure, insurance, and bonding requirements. AB 1169 (Daly), Chapter 380, Statutes of 2013, made certain provisions of the Act applicable to an escrow agent rating service to protect the misuse of an escrow agent’s data by such rating services. Such protections include the right of an agent to dispute inaccurate information and the requirement that a rating service safeguard all personally identifiable information obtained from an escrow agent, enforceable by a private right of action. AB 1169 included a sunset date of January 1, 2017, which has been extended twice, most recently to January 1, 2027, by SB 360 (Wilk), Chapter 105, Statutes of 2021. This bill repeals this sunset date.

Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081

SENATE THIRD READING

STR Bill Id:SB 946

Author:(Seyarto)

As Introduced Ver:February 2, 2026

Majority vote

SUMMARY

Existing law requires an escrow agent rating service to establish policies and procedures to safeguard personally identifiable information obtained from an escrow agent and provides that an escrow agent is a consumer for purposes of those provisions This bill will remove the sunset date of this requirement, extending the requirement indefinitely.

Specifically, this bill:

Repeals Section 1785.28.6 of the Civil Code.

Major Provisions

Repeal the sunset on the chapter which provides regulations for escrow rating services.

COMMENTS

1. Background

Escrow services may legally be performed in California under a variety of different laws, administered by a variety of different regulators. Escrow may be performed by persons licensed under the Escrow Law, administered by the Department of Financial Protection and Innovation; under the Real Estate Law, administered by the Department of Real Estate; under the Insurance Law, administered by the Department of Insurance; and may also be performed by attorneys and depository institutions. Escrow is also performed differently in different regions of the state.  In northern California, title companies typically perform both title and escrow services; in southern California, it is more common for title companies to handle title services and for independent escrow companies to handle escrow. In all cases, however, the mortgage lenders involved in the transactions seek to ensure that the third parties they use to perform escrow services operate in full accordance with the law.  

In 2012 the Consumer Financial Protection Bureau (CFPB) released guidance to supervised banks and nonbanks about overseeing their business relationships with service providers in a way that ensures compliance with federal consumer financial laws. To clarify its regulatory expectations, the CFPB has issued two bulletins on the topic.^[1] The guidance stated that the CFPB expects supervised banks and nonbanks to have an effective process for managing the risk of service provider relationships. To limit the potential for statutory or regulatory violations and related consumer harms, supervised banks and nonbanks should take steps to ensure that their business arrangements with service providers do not present unwanted risks to consumers. The guidance provided the following minimum recommended steps:

1. Conducting thorough due diligence to verify that the service provider understands and is capable of complying with federal consumer financial law; 
2. Requesting and reviewing the service provider's policies, procedures, internal controls, and training materials to ensure that the service provider conducts appropriate training and oversight of employees or agents that have consumer contact or compliance responsibilities; 
3. Including in the contract with the service provider clear expectations about compliance, as well as appropriate and enforceable consequences for violating any compliance-related responsibilities, including engaging in unfair, deceptive, or abusive acts or practices; 
4. Establishing internal controls and on-going monitoring to determine whether the service provider is complying with federal consumer financial law; and 
5. Taking prompt action to address fully any problems identified through the monitoring process, including terminating the relationship where appropriate.

As a result, third party risk management companies emerged to provide a screening service for supervised banks and nonbanks. At the end of 2012, the then named Department of Corporations provided a Commissioner's Bulletin No: 001-12, The bulletin notes that the Department had learned that some third party risk management companies were requiring potential service providers to pay a fee in order to be pre-screen by the companies, and to appear on a list of "approved" providers, in violation of several laws regarding "pay-to-play" or kickbacks.

1. Current Protections for Escrow Agents

In 2013, California enacted a law intended to protect escrow agents from misuse of the data collected by escrow agent rating services. The underlying rationale of the law is that escrow agents should have similar rights as consumers in reviewing the information collected about them and the ability to request corrections of any inaccuracies.

Functionally, the implementation of this statute has deviated from its original intent. While envisioned as a mechanism for escrow professionals to inspect their records, the law has instead served to limit the volume of data gathered. During the 2021 extension of the sunset provision, the sponsor reported that agents frequently invoke these protections to decline providing sensitive identifiers, such as social security numbers, to rating entities.^[2]

This bill makes permanent the current protections for escrow agents' data.

1. Prior and Related Legislation
   1. AB 1169 (Daly, Chapter 380, Statutes of 2013) extended certain provisions of the California Consumer Credit Reporting Agencies Act to apply to escrow agent rating services with a sunset of January 1, 2017.
   2. AB 2416 (Wilk, Chapter 135, Statutes of 2016) extended the sunset date of the law enacted by AB 1169 to January 1, 2022.
   3. SB 360 (Wilk, Chapter 105, Statutes of 2021) extended the sunset date of the law enacted by AB 2416 to January 1, 2027.

According to the Author

SB 946 preserves important consumer-reporting protections for escrow agents by removing a sunset date that would otherwise repeal them on January 1, 2027. Current law protects escrow agents through the Consumer Credit Reporting Agencies Act (CCRAA). This includes the right to see their information, challenge errors, fix mistakes, and protect their personal data when they're being evaluated. These protections were created because lenders started using third-party rating services to decide which escrow companies they'd work with. Sometimes these services used wrong or old information. Escrow professionals were also being pressured to share very sensitive personal information just to keep working. Since these protections started, they've worked well with no problems. They're still needed today. SB 946 simply makes these protections permanent instead of temporary. Lenders can still check and approve escrow agents as before.

Arguments in Support

"Escrow agent rating services are used by lenders and other financial institutions to evaluate escrow companies, often using public and private information and scoring systems similar to consumer credit reports. Concerns have arisen that these services may rely on inaccurate or outdated information, potentially harming escrow professionals without giving them a meaningful opportunity to review or correct the information being reported."

"Existing law helps address these concerns by treating escrow agents similarly to consumers under the CCRAA, allowing them to access reports prepared about them, dispute and correct inaccuracies, and benefit from safeguards for personally identifiable information. These protections also help ensure that escrow professionals are not pressured to provide sensitive personal data without appropriate protections."

"However, the current law is scheduled to sunset on January 1, 2027. SB 946 simply repeals that sunset provision so that these important safeguards remain in place. By doing so, the bill maintains a balanced framework that allows lenders to continue conducting appropriate due diligence on escrow providers while ensuring fairness, accuracy, and privacy protections for escrow professionals" -- California Escrow Association

Arguments in Opposition

None received. Last verified 6/23/2026

FISCAL COMMENTS

None.

VOTES

SENATE FLOOR: 33-0-7

YES: Archuleta, Arreguín, Ashby, Blakespear, Cabaldon, Caballero, Cervantes, Choi, Cortese, Dahle, Durazo, Gonzalez, Grayson, Grove, Jones, Laird, Limón, McGuire, McNerney, Menjivar, Ochoa Bogh, Pérez, Reyes, Richardson, Rubio, Seyarto, Smallwood-Cuevas, Strickland, Umberg, Valladares, Wahab, Weber Pierson, Wiener

ABS, ABST OR NV: Allen, Alvarado-Gil, Becker, Hurtado, Niello, Padilla, Stern

ASM BANKING AND FINANCE: 8-0-1

YES: Valencia, Chen, Dixon, Fong, Krell, Michelle Rodriguez, Blanca Rubio, Soria

ABS, ABST OR NV: Schiavo

UPDATED

VERSION: February 2, 2026

CONSULTANT: Desiree Nguyen Orth / B. & F. / (916) 319-3081 FN: 0003191

1. Bulletin 2012–03 (https://files.consumerfinance.gov/f/documents/201204_cfpb_bulletin_service-providers.pdf) Last visited 6/15/2026 and Bulletin 2016-02 (https://files.consumerfinance.gov/f/documents/102016_cfpb_OfficialGuidanceServiceProviderBulletin.pdf ) Last visited 6/15/2026. ↑

2. See analysis of the Senate Banking and Financial Institutions Committee of SB 360, as heard on March 10, 2021. ↑

Date of Hearing: June 22, 2026

ASSEMBLY COMMITTEE ON BANKING AND FINANCE

Avelino Valencia, Chair

SBPCA Bill Id:SB 946

Author:(Seyarto) – As Introduced Ver:February 2, 2026

SENATE VOTE: 33-0

SUBJECT: Consumer Credit Reporting Agencies Act: escrow agent rating services and escrow agents

SUMMARY: Existing law requires an escrow agent rating service to establish policies and procedures to safeguard personally identifiable information obtained from an escrow agent, and provides that an escrow agent is a consumer for purposes of those provisions This bill will remove the sunset date of this requirement, extending the requirement indefinitely

Specifically, this bill:

1. Repeals Section 1785.28.6 of the Civil Code.

EXISTING LAW:

1. Defines an “escrow agent” to mean any of the following:
   1. A natural person who performs escrow services for an entity licensed pursuant to the Escrow Law contained the Financial Code.
   2. A natural person performing escrow services for a title insurer admitted pursuant to the Insurance Code or an underwritten title company licensed pursuant to the Insurance Code.
   3. A natural person performing escrow services for a controlled escrow company, as defined in the Insurance Code. Or 
   4. A natural person licensed pursuant to the Business and Professions Code, who performs escrow services, in accordance with the Financial Code. California Civil Code (Cal.Civ.Code) section 1785.28(a)(2). 
2. Interprets “Consumer” to also mean escrow agent for this specified division. Cal.Civ.Code section 1785.28(a)(5). 
3. Defines an “escrow agent rating service” as a person or entity that prepares a report, for compensation or in expectation of compensation, for use by a creditor in evaluating the capacity of an escrow agent to perform escrow services in connection with an extension of credit. An escrow agent rating service does not include either of the following:
   1. A creditor or an employee of a creditor evaluating an escrow agent in connection with an extension of credit by that creditor.
   2. An entity described as “escrow agent” for which a natural person performs escrow services as an employee or an independent contractor. Cal.Civ.Code section 1785.28(a)(3).
4. Requires an escrow agent rating service to comply with consumer credit reporting reselling procurement requirements. Cal.Civ.Code section 1785.28(c) and Cal.Civ.Code section 1785.22. 
5. Requires an escrow agent rating service to establish policies and procedures reasonably intended to safeguard from theft or misuse any personally identifiable information it obtains from an escrow agent. Cal.Civ.Code section 1785.28(d). 
6. Provides that an escrow agent who suffers damages as the result of the failure of an escrow agent rating service to comply with the aforementioned requirements may bring an action in a court of competent jurisdiction pursuant to rules contained in Civil Code Section 1785.31.  Civil Code Section 1785.31 provides for actual damages in the case of a negligent violation and both actual damages, punitive damages between $100 and $5,000 per violation, and any other relief the court deems proper in the case of a willful violation.
7. Is subject to a sunset date of January 1, 2027, upon which date, the chapter is repealed.

FISCAL EFFECT:  None.

COMMENTS:

1. Purpose

According to the Author

SB 946 preserves important consumer-reporting protections for escrow agents by removing a sunset date that would otherwise repeal them on January 1, 2027. Current law protects escrow agents through the Consumer Credit Reporting Agencies Act (CCRAA). This includes the right to see their information, challenge errors, fix mistakes, and protect their personal data when they're being evaluated. These protections were created because lenders started using third-party rating services to decide which escrow companies they'd work with. Sometimes these services used wrong or old information. Escrow professionals were also being pressured to share very sensitive personal information just to keep working. Since these protections started, they've worked well with no problems. They're still needed today. SB 946 simply makes these protections permanent instead of temporary. Lenders can still check and approve escrow agents as before.

1. Background

Escrow services may legally be performed in California under a variety of different laws, administered by a variety of different regulators. Escrow may be performed by persons licensed under the Escrow Law, administered by the Department of Financial Protection and Innovation; under the Real Estate Law, administered by the Department of Real Estate; under the Insurance Law, administered by the Department of Insurance; and may also be performed by attorneys and depository institutions. Escrow is also performed differently in different regions of the state.  In northern California, title companies typically perform both title and escrow services; in southern California, it is more common for title companies to handle title services and for independent escrow companies to handle escrow. In all cases, however, the mortgage lenders involved in the transactions seek to ensure that the third parties they use to perform escrow services are operating in full accordance with the law.  

In 2012 the Consumer Financial Protection Bureau (CFPB) released guidance to supervised banks and nonbanks about overseeing their business relationships with service providers in a way that ensures compliance with federal consumer financial laws. To clarify its regulatory expectations, the CFPB has issued two bulletins on the topic.^[1] The guidance stated that the CFPB expects supervised banks and nonbanks to have an effective process for managing the risk of service provider relationships. To limit the potential for statutory or regulatory violations and related consumer harms, supervised banks and nonbanks should take steps to ensure that their business arrangements with service providers do not present unwanted risks to consumers. The guidance provided the following minimum recommended steps:

1. Conducting thorough due diligence to verify that the service provider understands and is capable of complying with federal consumer financial law; 
2. Requesting and reviewing the service provider’s policies, procedures, internal controls, and training materials to ensure that the service provider conducts appropriate training and oversight of employees or agents that have consumer contact or compliance responsibilities; 
3. Including in the contract with the service provider clear expectations about compliance, as well as appropriate and enforceable consequences for violating any compliance-related responsibilities, including engaging in unfair, deceptive, or abusive acts or practices; 
4. Establishing internal controls and on-going monitoring to determine whether the service provider is complying with federal consumer financial law; and 
5. Taking prompt action to address fully any problems identified through the monitoring process, including terminating the relationship where appropriate.

As a result, third party risk management companies emerged to provide a screening service for supervised banks and nonbanks. At the end of 2012, the then named Department of Corporations provided a Commissioner’s Bulletin No: 001-12, The bulletin notes that the Department had learned that some third party risk management companies were requiring potential service providers to pay a fee in order to be pre-screen by the companies, and to appear on a list of “approved” providers, in violation of several laws regarding “pay-to-play” or kickbacks.

1. Current Protections for Escrow Agents

In 2013, California enacted a law intended to protect escrow agents from misuse of the data collected by escrow agent rating services. The underlying rationale of the law is that escrow agents should have similar rights as consumers in reviewing the information collected about them and the ability to request corrections of any inaccuracies.

Functionally, the implementation of this statute has deviated from its original intent. While envisioned as a mechanism for escrow professionals to inspect their records, the law has instead served to limit the volume of data gathered. During the 2021 extension of the sunset provision, the sponsor reported that agents frequently invoke these protections to decline providing sensitive identifiers, such as social security numbers, to rating entities.^[2]

This bill makes permanent the current protections for escrow agents’ data.

1. Prior and Related Legislation

AB 1169 (Daly, Chapter 380, Statutes of 2013) extended certain provisions of the California Consumer Credit Reporting Agencies Act to apply to escrow agent rating services with a sunset of January 1, 2017.

AB 2416 (Wilk, Chapter 135, Statutes of 2016) extended the sunset date of the law enacted by AB 1169 to January 1, 2022.

SB 360 (Wilk, Chapter 105, Statutes of 2021) extended the sunset date of the law enacted by AB 2416 to January 1, 2027.

Arguments in Support

“Escrow agent rating services are used by lenders and other financial institutions to evaluate escrow companies, often using public and private information and scoring systems similar to consumer credit reports. Concerns have arisen that these services may rely on inaccurate or outdated information, potentially harming escrow professionals without giving them a meaningful opportunity to review or correct the information being reported.

Existing law helps address these concerns by treating escrow agents similarly to consumers under the CCRAA, allowing them to access reports prepared about them, dispute and correct inaccuracies, and benefit from safeguards for personally identifiable information. These protections also help ensure that escrow professionals are not pressured to provide sensitive personal data without appropriate protections.

However, the current law is scheduled to sunset on January 1, 2027. SB 946 simply repeals that sunset provision so that these important safeguards remain in place. By doing so, the bill maintains a balanced framework that allows lenders to continue conducting appropriate due diligence on escrow providers while ensuring fairness, accuracy, and privacy protections for escrow professionals”-- California Escrow Association

Arguments in Opposition

None received. Last verified 6/19/2026.

REGISTERED SUPPORT / OPPOSITION:

Support Last verified  6/19/2026

California Escrow Association

Escrow Institute of California

Opposition Last verified  6/19/2026

None received.

Analysis Prepared by: Desiree Nguyen Orth / B. & F. / (916) 319-3081

1. Bulletin 2012–03 (https://files.consumerfinance.gov/f/documents/201204_cfpb_bulletin_service-providers.pdf) Last visited 6/15/2026 and Bulletin 2016-02 (https://files.consumerfinance.gov/f/documents/102016_cfpb_OfficialGuidanceServiceProviderBulletin.pdf ) Last visited 6/15/2026. ↑

2. See analysis of the Senate Banking and Financial Institutions Committee of SB 360, as heard on March 10, 2021. ↑

Date of Hearing: June 22, 2026

ASSEMBLY COMMITTEE ON BANKING AND FINANCE

Avelino Valencia, Chair

SBPCA Bill Id:SB 946

Author:(Seyarto) – As Introduced Ver:February 2, 2026

SENATE VOTE: 33-0

SUBJECT: Consumer Credit Reporting Agencies Act: escrow agent rating services and escrow agents

SUMMARY: Existing law requires an escrow agent rating service to establish policies and procedures to safeguard personally identifiable information obtained from an escrow agent, and provides that an escrow agent is a consumer for purposes of those provisions This bill will remove the sunset date of this requirement, extending the requirement indefinitely

Specifically, this bill:

1. Repeals Section 1785.28.6 of the Civil Code.

EXISTING LAW:

1. Defines an “escrow agent” to mean any of the following:
   1. A natural person who performs escrow services for an entity licensed pursuant to the Escrow Law contained the Financial Code.
   2. A natural person performing escrow services for a title insurer admitted pursuant to the Insurance Code or an underwritten title company licensed pursuant to the Insurance Code.
   3. A natural person performing escrow services for a controlled escrow company, as defined in the Insurance Code. Or 
   4. A natural person licensed pursuant to the Business and Professions Code, who performs escrow services, in accordance with the Financial Code. California Civil Code (Cal.Civ.Code) section 1785.28(a)(2). 
2. Interprets “Consumer” to also mean escrow agent for this specified division. Cal.Civ.Code section 1785.28(a)(5). 
3. Defines an “escrow agent rating service” as a person or entity that prepares a report, for compensation or in expectation of compensation, for use by a creditor in evaluating the capacity of an escrow agent to perform escrow services in connection with an extension of credit. An escrow agent rating service does not include either of the following:
   1. A creditor or an employee of a creditor evaluating an escrow agent in connection with an extension of credit by that creditor.
   2. An entity described as “escrow agent” for which a natural person performs escrow services as an employee or an independent contractor. Cal.Civ.Code section 1785.28(a)(3).
4. Requires an escrow agent rating service to comply with consumer credit reporting reselling procurement requirements. Cal.Civ.Code section 1785.28(c) and Cal.Civ.Code section 1785.22. 
5. Requires an escrow agent rating service to establish policies and procedures reasonably intended to safeguard from theft or misuse any personally identifiable information it obtains from an escrow agent. Cal.Civ.Code section 1785.28(d). 
6. Provides that an escrow agent who suffers damages as the result of the failure of an escrow agent rating service to comply with the aforementioned requirements may bring an action in a court of competent jurisdiction pursuant to rules contained in Civil Code Section 1785.31.  Civil Code Section 1785.31 provides for actual damages in the case of a negligent violation and both actual damages, punitive damages between $100 and $5,000 per violation, and any other relief the court deems proper in the case of a willful violation.
7. Is subject to a sunset date of January 1, 2027, upon which date, the chapter is repealed.

FISCAL EFFECT:  Unknown. This bill is keyed Fiscal by Legislative Counsel.

COMMENTS:

1. Purpose

According to the Author

SB 946 preserves important consumer-reporting protections for escrow agents by removing a sunset date that would otherwise repeal them on January 1, 2027. Current law protects escrow agents through the Consumer Credit Reporting Agencies Act (CCRAA). This includes the right to see their information, challenge errors, fix mistakes, and protect their personal data when they're being evaluated. These protections were created because lenders started using third-party rating services to decide which escrow companies they'd work with. Sometimes these services used wrong or old information. Escrow professionals were also being pressured to share very sensitive personal information just to keep working. Since these protections started, they've worked well with no problems. They're still needed today. SB 946 simply makes these protections permanent instead of temporary. Lenders can still check and approve escrow agents as before.

1. Background

Escrow services may legally be performed in California under a variety of different laws, administered by a variety of different regulators. Escrow may be performed by persons licensed under the Escrow Law, administered by the Department of Financial Protection and Innovation; under the Real Estate Law, administered by the Department of Real Estate; under the Insurance Law, administered by the Department of Insurance; and may also be performed by attorneys and depository institutions. Escrow is also performed differently in different regions of the state.  In northern California, title companies typically perform both title and escrow services; in southern California, it is more common for title companies to handle title services and for independent escrow companies to handle escrow. In all cases, however, the mortgage lenders involved in the transactions seek to ensure that the third parties they use to perform escrow services are operating in full accordance with the law.  

In 2012 the Consumer Financial Protection Bureau (CFPB) released guidance to supervised banks and nonbanks about overseeing their business relationships with service providers in a way that ensures compliance with federal consumer financial laws. To clarify its regulatory expectations, the CFPB has issued two bulletins on the topic.^[1] The guidance stated that the CFPB expects supervised banks and nonbanks to have an effective process for managing the risk of service provider relationships. To limit the potential for statutory or regulatory violations and related consumer harms, supervised banks and nonbanks should take steps to ensure that their business arrangements with service providers do not present unwanted risks to consumers. The guidance provided the following minimum recommended steps:

1. Conducting thorough due diligence to verify that the service provider understands and is capable of complying with federal consumer financial law; 
2. Requesting and reviewing the service provider’s policies, procedures, internal controls, and training materials to ensure that the service provider conducts appropriate training and oversight of employees or agents that have consumer contact or compliance responsibilities; 
3. Including in the contract with the service provider clear expectations about compliance, as well as appropriate and enforceable consequences for violating any compliance-related responsibilities, including engaging in unfair, deceptive, or abusive acts or practices; 
4. Establishing internal controls and on-going monitoring to determine whether the service provider is complying with federal consumer financial law; and 
5. Taking prompt action to address fully any problems identified through the monitoring process, including terminating the relationship where appropriate.

As a result, third party risk management companies emerged to provide a screening service for supervised banks and nonbanks. At the end of 2012, the then named Department of Corporations provided a Commissioner’s Bulletin No: 001-12, The bulletin notes that the Department had learned that some third party risk management companies were requiring potential service providers to pay a fee in order to be pre-screen by the companies, and to appear on a list of “approved” providers, in violation of several laws regarding “pay-to-play” or kickbacks.

1. Current Protections for Escrow Agents

In 2013, California enacted a law intended to protect escrow agents from misuse of the data collected by escrow agent rating services. The underlying rationale of the law is that escrow agents should have similar rights as consumers in reviewing the information collected about them and the ability to request corrections of any inaccuracies.

Functionally, the implementation of this statute has deviated from its original intent. While envisioned as a mechanism for escrow professionals to inspect their records, the law has instead served to limit the volume of data gathered. During the 2021 extension of the sunset provision, the sponsor reported that agents frequently invoke these protections to decline providing sensitive identifiers, such as social security numbers, to rating entities.^[2]

This bill makes permanent the current protections for escrow agents’ data.

1. Prior and Related Legislation

AB 1169 (Daly, Chapter 380, Statutes of 2013) extended certain provisions of the California Consumer Credit Reporting Agencies Act to apply to escrow agent rating services with a sunset of January 1, 2017.

AB 2416 (Wilk, Chapter 135, Statutes of 2016) extended the sunset date of the law enacted by AB 1169 to January 1, 2022.

SB 360 (Wilk, Chapter 105, Statutes of 2021) extended the sunset date of the law enacted by AB 2416 to January 1, 2027.

Arguments in Support

“Escrow agent rating services are used by lenders and other financial institutions to evaluate escrow companies, often using public and private information and scoring systems similar to consumer credit reports. Concerns have arisen that these services may rely on inaccurate or outdated information, potentially harming escrow professionals without giving them a meaningful opportunity to review or correct the information being reported.

Existing law helps address these concerns by treating escrow agents similarly to consumers under the CCRAA, allowing them to access reports prepared about them, dispute and correct inaccuracies, and benefit from safeguards for personally identifiable information. These protections also help ensure that escrow professionals are not pressured to provide sensitive personal data without appropriate protections.

However, the current law is scheduled to sunset on January 1, 2027. SB 946 simply repeals that sunset provision so that these important safeguards remain in place. By doing so, the bill maintains a balanced framework that allows lenders to continue conducting appropriate due diligence on escrow providers while ensuring fairness, accuracy, and privacy protections for escrow professionals”-- California Escrow Association

Arguments in Opposition

None received. Last verified 6/19/2026.

REGISTERED SUPPORT / OPPOSITION:

Support Last verified  6/19/2026

California Escrow Association

Escrow Institute of California

Opposition Last verified  6/19/2026

None received.

Analysis Prepared by: Desiree Nguyen Orth / B. & F. / (916) 319-3081

1. Bulletin 2012–03 (https://files.consumerfinance.gov/f/documents/201204_cfpb_bulletin_service-providers.pdf) Last visited 6/15/2026 and Bulletin 2016-02 (https://files.consumerfinance.gov/f/documents/102016_cfpb_OfficialGuidanceServiceProviderBulletin.pdf ) Last visited 6/15/2026. ↑

2. See analysis of the Senate Banking and Financial Institutions Committee of SB 360, as heard on March 10, 2021. ↑

 THIRD READING  

Bill No: SB 946

Author: Seyarto (R)

Introduced: 2/2/26

Vote: 21

SENATE BANKING & F.I. COMMITTEE: 6-0, 3/18/26

AYES: Grayson, Niello, Cervantes, Reyes, Richardson, Strickland

NO VOTE RECORDED: Hurtado

SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/14/26

AYES: Cervantes, Seyarto, Cabaldon, Dahle, Grayson, Richardson, Wahab

SUBJECT: Consumer Credit Reporting Agencies Act: escrow agent rating services and escrow agents

SOURCE: California Escrow Association

DIGEST:

This bill removes a sunset that applies to provisions of the Consumer Credit Reporting Agencies Act related to escrow agent rating services, making the provisions operative indefinitely.

ANALYSIS:

Existing law:

1. Defines an escrow agent rating service as a person or entity that prepares a report, for compensation or in expectation of compensation, for use by a creditor in evaluating the capacity of an escrow agent to perform escrow services in connection with an extension of credit. (Civil Code Section 1785.28)
2. Defines an escrow agent, for purposes of Civil Code Section 1785.28, as a natural person who performs escrow services for an entity licensed under the Escrow Law (Financial Code Section 17000 et seq.); a natural person performing escrow services for a title insurer admitted under the Insurance Code (Insurance Code Section 699 et seq.) or for an underwritten title company licensed under the Insurance Code (Insurance Code Section 12389 et seq.); a natural person performing escrow services for a controlled escrow company, as defined in Insurance Code Section 12340.6; or a natural person licensed under the Real Estate Law (Business and Professions Code Section 10000 et seq.), as specified.
3. Provides that the term “consumer,” for purposes of Civil Code Section 1785.28, also means “escrow agent.”
4. Requires an escrow agent rating service to comply with and be subject to the following sections of law applicable to consumer credit reporting agencies (Civil Code Section 1785.28):
   1. Subdivision (a) of Civil Code Section 1785.10: requirement to allow a consumer who presents proper identification to visually inspect all files maintained by a credit reporting agency regarding that consumer at the time of the consumer’s request.
   2. Subdivision (b) of Civil Code Section 1785.10, limited to the obligation to inform a consumer of his or her right to a decoded written version of a file: requirement to inform a consumer of their right to request a decoded written version of the file a consumer reporting agency has on that consumer.
   3. Subdivision (d) of Civil Code Section 1785.10: requirement that a consumer credit reporting agency disclose the recipients of any consumer credit report on the consumer that it furnishes for employment purposes, within the two-year period preceding a consumer’s request for such information.
   4. Paragraph (2) of subdivision (a) of Civil Code Section 1785.11: requirement that a consumer credit reporting agency furnish a consumer credit report only in accordance with the written instructions of the consumer to whom it relates.
   5. Civil Code Section 1785.13: prohibits against including certain types of adverse information that exceed a certain age (seven years in some cases, ten years in other cases, e.g., bankruptcies, accounts sent to collection).
   6. Civil Code Section 1785.14: requirement to maintain reasonable procedures to assure the maximum possible accuracy of the information about whom the report relates.
   7. Paragraph (1) of subdivision (a) of Civil Code Section 1785.15, limited to the right to request and receive a decoded written version of the file: requirement to allow a consumer to request and receive a decoded written version of their file, including all information in the file at the time of the request, with an explanation of any code used.
   8. Civil Code Section 1785.16: requirement to allow a consumer to dispute the completeness or accuracy of any item of information in their credit file, requirement that the consumer credit reporting agency reinvestigate disputed information, requirement to allow a consumer to include a note in their file disputing certain information, and requirement that the consumer credit reporting agency include a consumer’s note in any consumer credit report it provides that includes information being disputed by that consumer.
   9. Civil Code Section 1785.18: requirement to specify the source of any public record included in a credit report.
5. Provides that an escrow agent rating service is considered a reseller of credit information, if it assembles and merges information contained in the database or databases maintained by a consumer credit reporting agency (Civil Code Section 1785.28). Requires an escrow agent rating service that acts as a reseller of credit information to comply with and be subject to Civil Code Section 1785.22: requirement to disclose the ultimate end user and each permissible purpose for which the report is furnished to the end user and requirement to establish and comply with reasonable procedures designed to ensure that the consumer credit report is resold only for a purpose for which the report may be furnished under existing law.
6. Requires an escrow agent rating service to establish policies and procedures reasonably intended to safeguard from theft or misuse any personally identifiable information it obtains from an escrow agent (Civil Code Section 1785.28).
7. Provides that an escrow agent who suffers damages as the result of the failure of an escrow agent rating service to comply with the aforementioned requirements may bring an action in a court of competent jurisdiction pursuant to rules contained in Civil Code Section 1785.31. Civil Code Section 1785.31 provides for actual damages in the case of a negligent violation and both actual damages, punitive damages between $100 and $5,000 per violation, and any other relief the court deems proper in the case of a willful violation.
8. Sunsets the aforementioned provisions on January 1, 2022. (Civil Code Section 1785.28.6)

This bill removes the sunset date that applies to the provisions described in the Existing Law section, making those provisions operative indefinitely.

Background

Escrow agents play an important and trusted role in some of the most complex and high value financial transactions in consumers’ lives, such as real estate transactions. Escrow agents serve as neutral third parties who manage legal documents and funds that change hands between buyers, sellers, lenders, and borrowers once all conditions of a contract have been satisfied. Providers of escrow services include specialized firms that focus on activities related to the settlement of real estate transactions, as well as banks and attorneys who engage in a broader range of activities.

Given the large sums of money involved, scammers and fraudsters target escrow agents and parties to the escrow process. Last year, the Department of Financial Protection and Innovation (DFPI), the state financial regulator, issued a bulletin warning of the social engineering scams targeting licensed escrow companies.^[1] An excerpt from that bulletin provides an example of the threat:

In the past five years, the DFPI has investigated many cases where licensed escrow companies fell prey to social engineering scams. For example, in 2023, a licensed escrow company received a call from a fraudster who claimed to be an IT employee of the bank. The fraudster instructed the escrow company to log into its online trust bank account for data migration. Within 15 minutes of receiving the phone call, the company’s internet service was disconnected. Shortly after the internet service was restored, the company found multiple outgoing wires were initiated to divert close to $2 million trust and general account funds to various bank accounts. The escrow company was unable to halt all the outgoing wires or replace the trust shortage caused by the outgoing wires. As a result, the company was taken over by the DFPI under conservatorship.

The parties to a real estate transaction – the buyer and seller, their respective agents, and the mortgage lender – must be able to trust that the escrow provider safeguards the funds and transmits the funds and legal documents correctly. Additionally, as regulated financial institutions, mortgage lenders have a legal obligation to vet third-party service providers that they work with. In recent decades, an industry of escrow agent rating services has emerged to help mortgage lenders protect against fraud and to fulfill their due diligence responsibilities over service providers. These rating services investigate escrow companies and their employees to verify compliance with licensure, insurance and bonding requirements. According to a leading provider of escrow agent ratings, Secure Insight provides the following description of how it evaluates and monitors escrow agents:

Secure Insight conducts an initial hands-on deep dive investigation, assigns trained risk analysts to review and interpret the data, interacts with the agents directly to verify derogatory or ambiguous information, arrives at a risk rating for the agent and then monitors agent personal and professional data to monitor for any changes in risk, updating its profile reports as new information becomes available.^[2]

Protections for escrow agents. In 2013, California enacted a law intended to protect escrow agents from misuse of the data collected by escrow agent rating services. The law was sponsored by escrow agents who wanted to protect their personally identifiable information, particularly to the extent that rating services evaluated the credit reports of escrow agents as part of their vetting process. As the California Escrow Association argued in 2013, the rating services “carry some of the indicia of credit reporting agencies,” which inspired the law that this bill seeks to make operative indefinitely.^[3] The underlying rationale of the law is that escrow agents should have similar rights as consumers in reviewing the information collected about them and the ability request corrections of any inaccuracies.

In practice, this law seems to have a slightly different effect than initially expected. Rather than providing a pathway for escrow agents to review the information collected about them, the law may lead to less data being collected on them in the first place. According to feedback from this bill sponsor when the sunset was last extended in 2021, some escrow agents have cited this law when pushing back on requests from ratings services for an employee’s social security number.^[4]

This bill proposes making permanent the above-discussed protections for escrow agents’ data. The three previously enacted bills on this subject have advanced unopposed with no “no” vote. Committee staff is unaware of any stakeholders in the escrow process who have concerns with making this law operative indefinitely.

FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No

According to the Senate Appropriations Committee, unknown, potentially significant court workload cost pressures to the extent any actions are brought against an escrow rating service due to that service’s theft or misuse of any personally identifiable information. The number of cases that would be brought as a result of this bill is unknown. It generally costs about $1,000 to operate a courtroom for one hour. If cases brought as a result of this bill take an additional 50 hours of court time in the aggregate in a given year, the cost pressures to the courts would surpass the Suspense File threshold. Although courts are not funded on the basis of workload, increased staff time and resources may create a need for increased funding for courts from the General Fund to perform existing duties. (Trial Court Trust Fund, General Fund).

SUPPORT: (Verified 5/14/26)

California Escrow Association (sponsor)

Escrow Institute of California

OPPOSITION: (Verified 5/14/26)

None received

ARGUMENTS IN SUPPORT: The California Escrow Association, as sponsor, writes: “[this] bill maintains a balanced framework that allows lenders to continue conducting appropriate due diligence on escrow providers while ensuring fairness, accuracy, and privacy protections for escrow professionals.”

Prepared by: Michael Burdick / B. & F.I. /

5/14/26 16:32:39

**** END ****

1. https://dfpi.ca.gov/wp-content/uploads/2025/02/EscrowBulletin0225.pdf ↑

2. https://secureinsight.com/about/why-secure-insight/: accessed on March 9, 2026. ↑

3. See analysis of the Senate Judiciary Committee of AB 1169, as heard on July 2, 2013. ↑

4. See analysis of the Senate Banking and Financial Institutions Committee of SB 360, as heard on March 10, 2021. ↑

SENATE COMMITTEE ON

Senator Sabrina Cervantes, Chair

2025 - 2026 Regular Session

SB 946 (Seyarto) - Consumer Credit Reporting Agencies Act: escrow agent rating services and escrow agents

Bill Summary:

SB 946 removes the sunset date that applies to provisions related to escrow agent rating services in the Consumer Credit Reporting Agencies Act (Act), making the provisions operative indefinitely.

Fiscal Impact:

Unknown, potentially significant court workload cost pressures to the extent any actions are brought against an escrow rating service due to that service’s theft or misuse of any personally identifiable information. The number of cases that would be brought as a result of this bill is unknown. It generally costs about $1,000 to operate a courtroom for one hour. If cases brought as a result of this bill take an additional 50 hours of court time in the aggregate in a given year, the cost pressures to the courts would surpass the Suspense File threshold. Although courts are not funded on the basis of workload, increased staff time and resources may create a need for increased funding for courts from the General Fund to perform existing duties. (Trial Court Trust Fund, General Fund).

Background:

The Act defines an escrow agent rating service as a person or entity that prepares a report, for compensation or in expectation of compensation, for use by a creditor in evaluating the capacity of an escrow agent to perform escrow services in connection with an extension of credit (Civil Code Section 1785.28). These rating services are essentially specialized consumer reporting agencies that act as third-party risk management firms for buyers/sellers, their respective agents, and mortgage lenders. They investigate escrow companies and their employees to verify compliance with licensure, insurance, and bonding requirements. Rating services may also audit the financial health and operational security of these entities and their individual agents. According to a leading provider of escrow agent ratings, Secure Insight provides the following description of how it evaluates and monitors escrow agents:

Secure Insight conducts an initial hands-on deep dive investigation, assigns trained risk analysts to review and interpret the data, interacts with the agents directly to verify derogatory or ambiguous information, arrives at a risk rating for the agent and then monitors agent personal and professional data to monitor for any changes in risk, updating its profile reports as new information becomes available

Because escrow agent rating services may evaluate the personal data (including credit report) of individual escrow agents, the Act grants agents many of the same protections that regular consumers have with credit bureaus. This includes the right for agents to dispute inaccuracies and protect their personally identifiable information. The Act mandates an escrow agent rating service to safeguard all personally identifiable information it obtains from an escrow agent. It also establishes a private right of action, allowing agents to seek damages from a rating service. The provisions related to escrow agent rating services in the Act are set to sunset on January 1, 2027.

Proposed Law:

Removes the sunset date that applies to provisions related to escrow agent rating services in the Consumer Credit Reporting Agencies Act, making the provisions operative indefinitely.

-- END --

SENATE COMMITTEE ON

BANKING AND FINANCIAL INSTITUTIONS

Senator Timothy Grayson, Chair

2025 - 2026 Regular

Bill No: SB 946 Hearing Date: March 18, 2026

Subject: Consumer Credit Reporting Agencies Act: escrow agent rating services and escrow agents

SUMMARY

This bill removes a sunset that applies to provisions of the Consumer Credit Reporting Agencies Act that apply to an escrow agent rating service, making the provision operative indefinitely.

EXISTING LAW

1. Defines an escrow agent rating service as a person or entity that prepares a report, for compensation or in expectation of compensation, for use by a creditor in evaluating the capacity of an escrow agent to perform escrow services in connection with an extension of credit. (Civil Code Section 1785.28)
   
2. Defines an escrow agent, for purposes of Civil Code Section 1785.28, as a natural person who performs escrow services for an entity licensed under the Escrow Law (Financial Code Section 17000 et seq.); a natural person performing escrow services for a title insurer admitted under the Insurance Code (Insurance Code Section 699 et seq.) or for an underwritten title company licensed under the Insurance Code (Insurance Code Section 12389 et seq.); a natural person performing escrow services for a controlled escrow company, as defined in Insurance Code Section 12340.6; or a natural person licensed under the Real Estate Law (Business and Professions Code Section 10000 et seq.), as specified.
   
3. Provides that the term “consumer,” for purposes of Civil Code Section 1785.28, also means “escrow agent.”
   
4. Requires an escrow agent rating service to comply with and be subject to the following sections of law applicable to consumer credit reporting agencies (Civil Code Section 1785.28):
   
   1. Subdivision (a) of Civil Code Section 1785.10: requirement to allow a consumer who presents proper identification to visually inspect all files maintained by a credit reporting agency regarding that consumer at the time of the consumer’s request.
      
   2. Subdivision (b) of Civil Code Section 1785.10, limited to the obligation to inform a consumer of his or her right to a decoded written version of a file: requirement to inform a consumer of their right to request a decoded written version of the file a consumer reporting agency has on that consumer.
      
   3. Subdivision (d) of Civil Code Section 1785.10: requirement that a consumer credit reporting agency disclose the recipients of any consumer credit report on the consumer that it furnishes for employment purposes, within the two-year period preceding a consumer’s request for such information.
      
   4. Paragraph (2) of subdivision (a) of Civil Code Section 1785.11: requirement that a consumer credit reporting agency furnish a consumer credit report only in accordance with the written instructions of the consumer to whom it relates.
      
   5. Civil Code Section 1785.13: prohibits against including certain types of adverse information that exceed a certain age (seven years in some cases, ten years in other cases, e.g., bankruptcies, accounts sent to collection).
      
   6. Civil Code Section 1785.14: requirement to maintain reasonable procedures to assure the maximum possible accuracy of the information about whom the report relates.
      
   7. Paragraph (1) of subdivision (a) of Civil Code Section 1785.15, limited to the right to request and receive a decoded written version of the file: requirement to allow a consumer to request and receive a decoded written version of their file, including all information in the file at the time of the request, with an explanation of any code used.
      
   8. Civil Code Section 1785.16: requirement to allow a consumer to dispute the completeness or accuracy of any item of information in their credit file, requirement that the consumer credit reporting agency reinvestigate disputed information, requirement to allow a consumer to include a note in their file disputing certain information, and requirement that the consumer credit reporting agency include a consumer’s note in any consumer credit report it provides that includes information being disputed by that consumer.
      
   9. Civil Code Section 1785.18: requirement to specify the source of any public record included in a credit report.
      
5. Provides that an escrow agent rating service is considered a reseller of credit information, if it assembles and merges information contained in the database or databases maintained by a consumer credit reporting agency (Civil Code Section 1785.28). Requires an escrow agent rating service that acts as a reseller of credit information to comply with and be subject to Civil Code Section 1785.22: requirement to disclose the ultimate end user and each permissible purpose for which the report is furnished to the end user and requirement to establish and comply with reasonable procedures designed to ensure that the consumer credit report is resold only for a purpose for which the report may be furnished under existing law.
   
6. Requires an escrow agent rating service to establish policies and procedures reasonably intended to safeguard from theft or misuse any personally identifiable information it obtains from an escrow agent (Civil Code Section 1785.28).
   
7. Provides that an escrow agent who suffers damages as the result of the failure of an escrow agent rating service to comply with the aforementioned requirements may bring an action in a court of competent jurisdiction pursuant to rules contained in Civil Code Section 1785.31. Civil Code Section 1785.31 provides for actual damages in the case of a negligent violation and both actual damages, punitive damages between $100 and $5,000 per violation, and any other relief the court deems proper in the case of a willful violation.
8. Sunsets the aforementioned provisions on January 1, 2022. (Civil Code Section 1785.28.6)

THIS BILL

Removes the sunset date that applies to the provisions described in the Existing Law section, making those provisions operative indefinitely.

COMMENTS

1. Purpose

According to the author, the purpose of this bill is to make “permanent current protections that allow escrow agents to access information used about them, dispute and correct inaccuracies, and protect personally identifiable information. This ensures fair and accurate vetting practices while allowing lenders to continue using escrow agent rating services.”

1. Background

Escrow agents play an important and trusted role in some of the most complex and high value financial transactions in consumers’ lives, such as real estate transactions. Escrow agents serve as neutral third parties who manage legal documents and funds that change hands between buyers, sellers, lenders, and borrowers once all conditions of a contract have been satisfied. Providers of escrow services include specialized firms that focus on activities related to the settlement of real estate transactions, as well as banks and attorneys who engage in a broader range of activities.

Given the large sums of money involved, scammers and fraudsters target escrow agents and parties to the escrow process. Last year, the Department of Financial Protection and Innovation (DFPI), the state financial regulator, issued a bulletin warning of the social engineering scams targeting licensed escrow companies.^[1] An excerpt from that bulletin provides an example of the threat:

In the past five years, the DFPI has investigated many cases where licensed escrow companies fell prey to social engineering scams. For example, in 2023, a licensed escrow company received a call from a fraudster who claimed to be an IT employee of the bank. The fraudster instructed the escrow company to log into its online trust bank account for data migration. Within 15 minutes of receiving the phone call, the company’s internet service was disconnected. Shortly after the internet service was restored, the company found multiple outgoing wires were initiated to divert close to $2 million trust and general account funds to various bank accounts. The escrow company was unable to halt all the outgoing wires or replace the trust shortage caused by the outgoing wires. As a result, the company was taken over by the DFPI under conservatorship.

The parties to a real estate transaction – the buyer and seller, their respective agents, and the mortgage lender – must be able to trust that the escrow provider safeguards the funds and transmits the funds and legal documents correctly. Additionally, as regulated financial institutions, mortgage lenders have a legal obligation to vet third-party service providers that they work with. In recent decades, an industry of escrow agent rating services has emerged to help mortgage lenders protect against fraud and to fulfill their due diligence responsibilities over service providers. These rating services investigate escrow companies and their employees to verify compliance with licensure, insurance and bonding requirements. According to a leading provider of escrow agent ratings, Secure Insight provides the following description of how it evaluates and monitors escrow agents:

Secure Insight conducts an initial hands-on deep dive investigation, assigns trained risk analysts to review and interpret the data, interacts with the agents directly to verify derogatory or ambiguous information, arrives at a risk rating for the agent and then monitors agent personal and professional data to monitor for any changes in risk, updating its profile reports as new information becomes available.^[2]

1. Protections for escrow agents

In 2013, California enacted a law intended to protect escrow agents from misuse of the data collected by escrow agent rating services. The law was sponsored by escrow agents who wanted to protect their personally identifiable information, particularly to the extent that rating services evaluated the credit reports of escrow agents as part of their vetting process. As the California Escrow Association argued in 2013, the rating services “carry some of the indicia of credit reporting agencies,” which inspired the law that this bill seeks to make operative indefinitely.^[3] The underlying rationale of the law is that escrow agents should have similar rights as consumers in reviewing the information collected about them and the ability request corrections of any inaccuracies.

In practice, this law seems to have a slightly different effect than initially expected. Rather than providing a pathway for escrow agents to review the information collected about them, the law may lead to less data being collected on them in the first place. According to feedback from this bill sponsor when the sunset was last extended in 2021, some escrow agents have cited this law when pushing back on requests from ratings services for an employee’s social security number.^[4]

This bill proposes making permanent the above-discussed protections for escrow agents’ data. The three previously enacted bills on this subject have advanced unopposed with no “no” vote. Committee staff is unaware of any stakeholders in the escrow process who have concerns with making this law operative indefinitely.

1. Prior and Related Legislation

AB 1169 (Daly, Chapter 380, Statutes of 2013) extended certain provisions of the California Consumer Credit Reporting Agencies Act to apply to escrow agent rating services with a sunset of January 1, 2017.

AB 2416 (Wilk, Chapter 135, Statutes of 2016) extended the sunset date of the law enacted by AB 1169 to January 1, 2022.

SB 360 (Wilk, Chapter 105, Statutes of 2021) extended the sunset date of the law enacted by AB 2416 to January 1, 2027.

LIST OF REGISTERED SUPPORT/OPPOSITION

Support

California Escrow Association (sponsor)

-- END --

1. https://dfpi.ca.gov/wp-content/uploads/2025/02/EscrowBulletin0225.pdf ↑

2. https://secureinsight.com/about/why-secure-insight/: accessed on March 9, 2026. ↑

3. See analysis of the Senate Judiciary Committee of AB 1169, as heard on July 2, 2013. ↑

4. See analysis of the Senate Banking and Financial Institutions Committee of SB 360, as heard on March 10, 2021. ↑