Senate Standing Committee on Banking and Financial Institutions

All right. The Senate Committee on Banking and Financial Institutions will come to order. Good afternoon. The Senate continues to welcome the public in person and via teleconference service. For individuals wishing to provide public comment for today's participation, they can call in at 877-226-8216 and the access code is 6217162. We are holding our Committee hearings here in the O Street Building, and I ask all Members of the Committee to please be present in Room 2100 so that we can establish quorum and begin our hearing.

We do have six bills on the agenda today, and we don't have quorum yet, so we will hold off on calling roll, and I think that we do have our first author here. We welcome Senator Skinner, and we will begin as a Subcommittee until we are able to reach quorum. Welcome, Senator Skinner. You may present SB 54 when you are ready.

One second. I've got to get my glasses. Always forgetting that.

Haven't figured out how to have super vision yet. Thank you, Madam Chair and Members. SB 54 deals with the fact that we are finding now that investors that are the lifeblood of startups and entrepreneurs are not investing in women-owned firms or minority-owned firms, but specifically Black-owned firms. California, as all of us know, has been very proactive in promoting diversity and inclusion, including in the corporate and the financial sector.

We've also led the nation in pay equity, which we still know remains unequal for women and people of color. But as I referenced, those who choose the path to use their entrepreneurial skills, rather than being an employee to launch a startup, a new enterprise, capital investment, specifically venture capital investment, is their lifeline. But if you are a women-led or a Black-led startup, such investments don't come your way.

So let me give you the specific statistics on this. PitchBook, which tracks venture investments, found that female-founded startups received only 2.3 percent of venture capital investments in 2020, and that percentage went the wrong direction the year after. In 2021, it dropped, or rather 2022, it dropped to 1.7 percent. The same report found that the venture capital firms themselves are not made up. The decision makers in them don't have very many women or Blacks.

Eight percent of decision makers of venture capital firms were women, three percent of decision makers were Black. Did that affect the decision? We don't really know. But what I'm more interested in is making sure that women-led startups and Black-owned and other minority-led startups can compete fairly and attract venture capital investment. Last year, we enacted the Chair's bill, SB 1162, to make sure that we would achieve the gender pay equity that we've been working on.

And we did that by transparency, by having employers report and show publicly the positions and what the pay was so you could hold them accountable if you were not being paid what you were worth. SB 54, the bill before you is very similar.

It simply requires venture capital firms to report on the diversity of their investments to our Department of Financial Protection and Innovation, who will make these reports then publicly accessible so then we can see whether the venture capital investments--are they respecting that diversity and trying to increase the number of Black and women-owned startups, which, of course, is beneficial for the economy or are they not? So it's purely a disclosure transparency measure. And I would like to introduce my witness in support, who is also from the sponsoring organization, which is the F5 Collective, and my witness is Marquisa Finch.

And while the witness in support comes up, we have established quorum. So I am going to ask for the roll to be called so we can officially take a vote.

Actually, her name is Marquesa. So, yeah. Anyway.

[Roll Call].

Great. We have established quorum. You may proceed with your testimony in support.

Good afternoon, Members of the Committee. My name is Marquesa Finch. I am the founding partner of the F5 Collective. I'm sorry. Should I beginning again--oh. There we are. Okay. I can hear myself now. All right. So, again, good afternoon, Members of the Committee. My name is Marquesa Finch, and I am the founding partner of the F5 Collective. We are a venture fund, and we invest solely in female founders.

Women are one of the most underfunded groups when it comes to venture-backed startups, despite outperforming their all male counterparts by 63 percent. We believe that not only is investing in women good for society, it's good for markets, but it's also a great return on investment. I am also the CEO and cofounder of Pyrium, a financial technology startup that helps diverse entrepreneurs from all backgrounds raise capital.

Many times, these founders find difficulty in raising from traditional venture capitalists simply because those investors don't come from the communities they're trying to build for. So what we do at Pyrium is that we convert those communities into investors via process called equity crowdfunding. So, as Senator Skinner outlined, dissemination of capital to female founders and entrepreneurs of color and other diverse entrepreneurs is woefully lacking within institutional venture capital. And it has been for decades, and it continues to worsen.

So for me, aside from being a venture capitalist and a founder, I am also a Bay Area native. I'm a technologist. I hold graduate and postgraduate degrees. I am also of African American and Filipino heritage. I've built technology for large enterprises and for startups for 11 years, and I've also been part of the investment committees that has funded many talented entrepreneurs for the last seven years. And yet, despite my experience, I still face barriers to funding.

When speaking to investors, I'm often mistaken for the support staff, the validity of my venture and/or my qualifications in pitches, in questions in pitches, convey the expression of doubt in the line of questioning. It's a stark contrast to the line of questioning that my white male counterparts get where their questions are more rooted in potential and excitement. Furthermore, there is credibility around being a builder of financial products. As a woman, I'm expected to be building products in beauty or fashion or food.

So being an entrepreneur is already financially and emotionally taxing. But then to have to battle what seem like one million and one misconceptions about my ability to succeed is what's widening the equity gap in entrepreneurship. There is no doubt that the success of Silicon Valley, of tech, and of entrepreneurship has helped California thrive, but we are missing so many Californians and so many entrepreneurs in that process, I don't know if we can really call it thriving.

So I'm here to express my support of SB 54 in an attempt to bring more transparency around diversity within venture-backed founders and empower the larger venture community to have access to the bigger picture when it comes to creating better outcomes. Thank you.

Thank you. Do we have any additional witnesses in support? If we do, I would like to welcome you to please come up to the microphone and state your name, your affiliation, and your position only. All right. Seeing no additional witnesses in support, do we have any witnesses in opposition? Seeing no witnesses in opposition in the room, Moderator, do we have any witnesses in support or in opposition on the lines? If so, could we ask them to be on the queue for SB 54?

Okay. Moderator? Do we have a moderator?

Yes. It's Tom, and for whatever reason, he doesn't have the number.

All right, we will go back to the moderator. I think we're having some technical issues, but Members, we will open it up for any discussion or comments. Vice Chair Niello.

Thank you, Madam Chair. Senator Skinner, perhaps I live in an alternative universe, but I am intimately familiar with at least three venture funds here in the Sacramento region, and there are several women-owned businesses being funded by these venture funds. There's also a Black entrepreneur in Sacramento who has built a fund and specifically targets Black-owned businesses. I'm at the moment forgetting his name. I can find that out. But my personal experience is completely contrary to what you describe. I'm not doubting what you say.

It's just, it's totally different than my experience, and my knowledge is very detailed and involved with regard to these funds here. So it just seems to me unnecessary detail.

Certainly all of us have anecdotal experiences. Not an anecdotal. Those are real experiences.

I'm sorry, Senator Skinner. This is not anecdotal.

True. It's true. Those are real experiences. But what I meant more is that they can be anecdotes to what the data shows. And I'm happy to hear that there are some women-led firms that are getting that venture capital. And as I cited, there are some percent that are, but it's tiny. And perhaps the Sacramento region is better than others. The data I gave was nationwide. But when we look at--not that all founders become the CEOs--but it's just representative.

When you look at the number of female CEOs, it's paltry. It's hardly any. And is it only because women-led organization or women-led firms didn't get the venture capital? Who knows? But it's connected. And I think what I'm trying to do here is by this transparency, open it up. And we have had a number of--California has enacted policy to get more women and people of color on corporate boards. We have enacted policy for pay equity.

We've done a variety of things that by just getting more women and people of color into these roles, whether it's on corporate boards, whether it's in firms, regardless of what it is, then there becomes more of that comfortability, which can help to lead to that investment. But the data, which I didn't cite, shows that this lack of investment was, regardless of, as our witness described, the expertise of the particular female founder, the track record, the viability of their business plan, of a variety of things like that.

And so, like I said, I'm very happy to hear that there is venture investment here in this area, in women-led firms. And that is my goal, to have that expanded. And this is not a mandate in terms of requiring a certain percent of investment go to those such firms, it is purely the ability to have transparency so we can try to hold them accountable and we can try to have these kind of debates.

Thank you, Senator. And we have Senator Min, and I just do want to tell everyone there may be a chance that we will need to take a two minute recess if we can't figure out the technicality. So I just want to prepare, folks. So, Senator Min.

Thank you. So in academia, where I used to be, there was a saying that we often use that the plural of anecdote is not data, and so while anecdotes can be informational, if the data is overwhelming, that is what it is now. I think this bill is an important one because if Senator Niello is right that this is something that is not a problem, I think this bill will actually help unearth that.

If, however, it does confirm that there is systemic bias against certain classes of people in founding firms, in leadership, then we can start to dig out the data. So I think this is an important bill to start help determining, are those anecdotes correct or is there a different picture such as the one that the author portrays? So with that, since I've coauthored your last two bills that I've heard, I'll request to coauthor this one at the appropriate time as well.

Members, and due to the technicality that we have, we do have to actually recess for really just hopefully no more than two minutes, but we will continue the conversation. We just want to allow folks on the phone lines to participate accordingly. So we will recess for really just a few seconds as soon as we can get the moderator on the line.

We are here. I'm here. We just connected to your room. Thank you.

All right. Well, there you go, Members. We're going to lift the call from recess. Glad that all happened here and now. So, Senator Skinner, don't go anywhere because we were back from recess. It was that quick. Senator Skinner, we're back. We're back. It was that quick. It was magic. And so I know Senator Bradford has comments or questions.

Well, comment. I just want to thank the Senator for this measure, and I know there might be exceptions to the rules, but the majority of my experience for the last 25 years says that it's lacking both people of color and women and our veterans in not only the financial space, but almost in every entity in business, and so this is greatly needed.

And I've lost track of the number of bills that we've had to do since I've been in the Legislature, whether it's women on corporate boards, you name it, and to continue to have to assert both gender and race into much of what we do because it's devoid. It's truly devoid. So there are exceptions to the rules, but whether it's contracting, whether it's cannabis, whether it's--you name it--it's white male dominated, especially in the financial institution. So I'm excited about this bill, and if you will have me, I would love to be added as a coauthor as well.

Happily.

Great. Thank you. Seeing no other questions or comments, I am going to now go to the phone lines. Moderator, this is SB 54. If there are any individuals on the phone lines either wishing to testify in support or opposition, can we please queue them?

Thank you, Madam Chair. If you are in support or opposition to SB 54, please press one followed by zero at this time. One followed by zero. And we'll give a final reminder: please press one zero at this time if you are in support or opposition to SB 54. And Madam Chair, nobody's queuing up at this time.

All right, thank you very much. So we will bring it back, and I just want to thank you for bringing this forward. I think that in the conversation about this bill, I think it's really important when you hear differences in what people's lived reality is and experience with this, I actually think it begs for reporting so that we can have a greater conversation that is based on multiple perspectives, multiple experiences that are lived by the individuals that we wish to serve.

And that's what this bill does. It is a reporting bill, and we will get more information, not less, and I think more information can influence how we move forward. So I will be supporting the bill, and I thank you for bringing that forward. Would you like to close?

Thank you. I appreciate it. I think I made some of the comments I might have otherwise in closing and during our conversation, and with that, I would just ask for your aye vote.

Thank you. We have a motion by Senator Min. This is SB 54. The motion is 'do pass, but first re-refer to the Committee on Judiciary.' Can we please call the roll?

Motion is 'do pass, but first be referred to the Committee on Judiciary.' [Roll Call].

All right, we have three ayes and one no, and we will leave that on call. Thank you. And as we prepare to have Senator Dodd present, we will take a motion on the consent calendar. We have two bills in the consent calendar, SB 531 by Ochoa Bogue and SB 66 by Min.

Thank you. Vice Chair Niello has moved the consent calendar. Can we please call the role in consent, Senator Lamone. Aye.

So moved.

Limone? Aye. Niello? Aye. Niello, aye. Bradford? Bradford, aye. Caballero? Min? Aye. Min, aye. Nguyen? Portantino?

All right, we have four votes for the consent calendar. We will leave the call open, the roll open. Next we have Senate Bill by Senator Dodd. You can begin whenever you're ready.

Thank you, Madam Chair. And Members, I'm presenting SB 278 pertaining to elder financial abuse. SB 278 clarifies California's elder financial abuse statute so that a person or entity who knows or should have known that an elder or dependent adult is subject to financial abuse but fails to act as a reasonable person may be held accountable for assisting in the abusive activity. Elder financial abuse is everywhere. Losses equal $3 billion annually. Once a senior falls prey to financial fraud, they may never recover.

As mandated reporters, care custodians, investment advisors, and financial institutions are well positioned to detect elder financial abuse and take action to protect elders. Unfortunately, the language of California's current financial elder abuse statute is not as clear as it should be, or as clear as it needs to be, frankly. Typically, in cases where the victim attempts to hold someone who has assisted the financial scam accountable, that person or entity will claim they cannot be liable because they didn't have actual knowledge of the abuse.

This is a near impossible standard, and it was never the intent of the law. SB 278 will clarify what is expected of mandated reporters if they know or should have known that financial abuse was taking a place. In response to concerns raised by banks and credit unions, SB 278 was amended to add specificity pertaining to the definition of assisting in elder financial abuse, and I believe, adequately resolves at least that concern. I am going to kind of go off the cuff a little bit.

You'll hear in the testimony today against this Bill that some issues. Not only have I been a staunch supporter of seniors my whole career as an elected official, including 14 years as a county supervisor, I've also been a bank board Member and a loan Committee Member, and I do see the concerns of the banking industry.

I think we kind of went a little bit sideways in communication the last time we spoke, and I was kind of expecting to have something sent to me that would work, but I have not received that. And I just wanted the Committee to know before the close that this is something that I intend to work on.

Thank you very much, Senator Dodd. And so we will go ahead and we will move to the first witness in support.

Good afternoon, Madam Chair and Members. My name is Addison. I am a resident of Hamburg, California. I came here to ask your support for Senate Bill 278. I immigrate here from Taiwan to pursue American dream. My husband and I raised four kids, and we saved some money for retirement. After my husband passed away, I tried really hard to care for myself and my older son, who is on disability. Last year, my American dream turned into nightmare.

I fell victim to a scammer who convinced me to wire money for investment. So I went to the bank to ask to wire money. Instead of asking me why, they just get a manager's approval. Why out of money. I fang in again and again and again for those wire transfers. Seven times I bang in and the massive amount of money we wire out from my account, it took less than three weeks. If the bank had stopped the third wire, my loss would have been 70, $62,000.

If the layer would stop the fourth wire, my loss will be a little bit over 170,000. Even if they stop at six time, then my loss will be $370,000. In the end, I lost almost three quarters of $1.0 million. It's almost all my life savings. I was a lawyer and longtime customer of my bank. If only the bank had done its job to protect elders like me from being scammed, I would not be where I am now.

An 80 year old widow left to pick up the pieces of my life. Honestly, when this happened, I wanted to end it all. Then I finally gathered the energy and stand up again. I was hit by the tax consequences. I had already lost all my money, but those money are from my Ira, Kong and the stocks. And thinking of that I had to pay tax on that money is terrifying. For the second time, I thought about killing myself again. Then I heard about Senate Bill 278.

It gave me a hope that I, along with 6 million other elders, will be able to find peace and happiness for the demander of our life. I have been through like hell the last seven months. Like it takes tons of energy and effort to to be here. But I'm here to ask you, please pass this Bill because this Bill help us. And I thank you for your time. May God bless you all.

Thank you very much for that testimony. Additional witnesses in support just ask you to be aware of the time, yes.

Good afternoon, Madam Chair and Members. My name is Kirsten Fish, and I'm here on behalf of the bill's co sponsor, Consumer Attorneys of California. I've been a law Professor since 2009, teaching torts and legal research and writing. I'm also one of the authors of CEB's book on California elder law litigation. As an attorney for the last 20 years, I've dedicated my career to representing elders, independent adults who are victims of physical and financial abuse.

Over the years, I've received many heartbreaking calls, exactly like Miss Lynn recounting how they were swindled out of their life savings by scammers for various reasons, including tech support, lottery, government imposter, and charity scams. And the results, as you just heard, are devastating, as it's virtually impossible for the elders to earn back the money that was taken from them during their lifetimes. As a result, I've had clients who have become homeless, others who have become dependent on family or public assistance once their savings were gone.

And for many, the worry, fear, financial distress is too much to bear, resulting in sharp declines in mental and physical health and even suicide. In representing these victims of financial abuse, the most difficult legal issue is determining what the standard is for holding a person liable for assisting in the abuse.

And that's because, while the intent of the elder Abuse act is clear to protect the state's vulnerable population from abuse and neglect, the language of the statute is not making it difficult for all parties to know what is required to prove of cause of action for assisting and abuse and resulting in inconsistent rulings as different judges in different forums attempt to interpret the law.

Which is why SB 278 is so important, because it provides much needed clarity as to what a victim must prove in order to hold a mandated reporter liable. Persisting in financial abuse, whether they are care custodians, investment advisors, or financial institutions. For example, in one of my cases, after many years of routine banking, an 85 year old suddenly started requesting wire transfers from his bank in the amount of $49,500 every other day to different individuals.

In Thailand, he did this 29 times in a two month period with no questions asked by his bank, even though it was totally uncharacteristic for him. $1.4 million later, his family found out he'd been the victim of a tech support scam. The bank argued that under their reading of the statute, they couldn't be held liable for assisting in the abuse because they didn't have actual knowledge of the scam.

This Bill would give an elderly victim a chance to prove their case, but it does not impose strict liability. The victim must show that the defendant had actual or constructive knowledge that their conduct was likely to be harmful and that they failed to act as a reasonable person in a like position would. Those are reasonable person standard is one that is used very commonly throughout contract, tort and criminal law. It's also important to note that the Bill does not create a new private right of action.

It simply clarifies when a person or entity who assists in financial abuse may be held accountable. In short, SB 278 codifies what mandated reporters should already be doing, acting reasonably, when they know or should have known that an elder or dependent adult is a victim of financial abuse, which is entirely consistent with the stated intent of our Elder Abuse act. For those reasons, I respectfully urge you to support SB 278. Thank you.

Thank you. Any other witnesses in the room in support, please come forward. State your name, affiliation and position.

Madam Chair, Pat Moran, with Aaron Reed and associates representing the retired Public employees Association. Strong support. Thank you. Thank you. Joshua Dube, on behalf of the Consumer Federation of California in support. Thank you.

Ruth Silvertop, Catherine and George Alexander, community Law center at Santa Clara University School of Law and the Santa Clara County Wage Theft Coalition in strong support.

Thank you. Good morning.

Chair and Members, Danny Kandokaiser, on behalf of the co sponsors of the Bill, the California Low Income Consumer Coalition and elder law and advocacy, as well as a nationwide coalition of supporters, with your permission, I'd like to read the list of names. If that's so, it's the other supporters.

You can read the list of names.

Rather than having them call in. I thought a little faster. Betced legal services, Centro Legal De La Rasa, community legal Services of East Palo Alto, legal aid of Marin, Legal Aid Society of San Bernardino, Legal Assistance for Seniors, National Consumer Law center, open door legal, public counsel, public good law center, public Riverside Legal Aid, Watsonville Law center. Thank you very much.

Great, thank you. All right, seeing no other witnesses in support, we will now have the lead witnesses in opposition. Please come forward.

Good afternoon, Madam Chair and Members. My name is Laurel Sykes. I'm the Executive Vice President and chief risk officer at American Riviera Bank. I'm here on behalf of the bank as well as the California Community Banking Network. We're a community bank serving Californians in the Santa Barbara area and I'm here today to regretfully oppose Senate Bill 278.

While I'm personally passionate about the ultimate goal of the Bill to protect seniors and dependent adults from financial abuse as currently drafted, it will have sweeping negative consequences for the very population that it's intended to protect. Individuals working at financial institutions must adhere to strict regulatory requirements as mandated. Reporters and community banks take this very seriously. When our tellers suspect financial abuse, they must report it to either adult protective agencies or law enforcement as soon as possible.

Senate Bill 278 specifies that a person who assists in taking, secreting, appropriating, obtaining or retaining property for wrongful use has committed financial abuse if the person knew or should have known that this conduct is likely to be harmful to the elder or dependent adult. In most elder adult financial abuse cases, community banks have actual knowledge, but it is typically impossible to prevent the taking or spending of money when an elder has fallen prey to a scam.

If assisting is solely those issues where a bank employee is involved in facilitating, community banks will be putting in a position of deciding whether or not to honor their request. And how would a bank deny such a request when it's the customer's money and their right to access their funds? If there are suspicions, banks already have an obligation to report. We frequently have customers who we suspect are victims of financial abuse.

In these instances, we report the suspected abuse, assist law enforcement, and spend months on each case attempting to convince the elder adult of suspected abuse. Unfortunately, even with all of these safeguards, and even after we have flagged it and informed the customer that we suspected is fraudulent, if the customer insists on the transaction, we must approve it. It is in the best interest of our customers and of financial institutions to ensure that transactions are not fraudulent.

No one wins when a transaction is deemed fraudulent and under regulation and the new faqs that were issued by the CFPB in 2021, banks are already liable for debit card and online banking transactions if the senior didn't perform or authorize those transactions themselves. At American Riviera Bank, we see at least one case of suspected elder abuse per week. Right now, most of these instances are romance scams.

In one case just last month, we had a senior reporting an unauthorized transaction after she fell prey to a scam. She had already been forced out of another institution and had an overdraft loss of $24,000 and was ultimately reported to check systems. Now, if her account is closed like that due to repeated fraud, and if she's reported to check systems, she likely won't be able to open another account at a bank.

Liability for losses at banks will hurt consumers more since they will be less likely to maintain the banking relationship. Senate Bill 278 will have significant negative impact on access to banking services for elder adults by essentially requiring banks to deny seniors access to their accounts when they suspect suspicious activity, placing banks in a conservator role and forcing them to make very conservative decisions regarding transactions. This will lead to delays and potentially less willingness by banks to maintain accounts with customers after the first suspicion of fraud.

Because the Bill will hinder access to financial services for elder customers, we must regretfully oppose Senate Bill 278.

Thank you. Any additional witnesses in opposition?

Good afternoon, chair and Members Michael Levy, Senior Vice President and General counsel for Travis Credit Union, on behalf of the California credit union league. Travis is a memberowned notforprofit serving a quarter million California consumers, including 45,000 seniors. We thank Senator Dodd for meeting with us and applaud his goal to protect our elderly. We oppose this Bill because we do not have the legal authority it assumes we have to prevent financial abuse.

The Bill creates strict liability for negligent failure to prevent fraud by another against financial institutions and individual branch tellers for supposedly not acting like reasonable person to prevent it. The Bill seeks prevention, but it does not say what a reasonable, mandated reporter should do besides their existing duty to report suspected exploitation to APS or another responsible agency.

The sponsors loosely describe financial abuse with the word fraud to argue that we have detection systems and algorithms, none of which expose romance and confidence schemes, undue influence and duress, whether by family Members, housekeepers or others. While the sponsors are correct that we do try to steer Members away from questionable activity and occasionally may take it upon ourselves to refuse a transaction, in fact, credit unions have no inherent authority to refuse a member's directions.

Credit unions have no 5150 power to order a compulsory psych evaluation. We cannot initiate conservatorship proceedings, and no laws give us power to prevent Members who have not been adjudged incompetent from doing what they want with their own money, even when their behavior is objectively unreasonable and unwise, the Bill relies upon the Finsen advisory, which identifies red flags we routinely use to detect suspicious transactions. But not one sentence in that 15 page advisory indicates how we should actually prevent exploitation. Neither do the sponsors.

That's because we can't actually prevent it. If we decline a transaction, the Member can initiate it online or from another institution. The sponsors suggest we should just freeze Members accounts, but no court proceedings exist to trigger their release, and we expose ourselves to liability for conversion of the member's property. If enacted, we will be forced to interrogate every senior and preserve evidence of the details of every transaction.

Because years after the fact, often in a probate proceeding between siblings we may be forced to justify the reasonableness of choosing to allow any transaction. Even honest miscalculations in the eyes of a future jury will be borne by the other credit union Members without proof of causation, and the judgment will conceivably follow the branch teller for life, not subject to bankruptcy, and make the teller unbondable for future fiduciary positions.

Ultimately, that will decrease accessibility of financial services to our elderly Members and will incent financial institutions to avoid the risk by choosing not to service them. We urge your no vote. Thank you.

Thank you. Any other witnesses in the room in opposition, please come forward. State just your name, affiliation and position.

Jason Lane, California Bankers Association. Look forward to working with the Senators. To build these forward.

Thank you. Indira Mcdonald, on behalf of the California Mortgage Bankers Association, respectfully opposed.

Brenda Bass with California Chamber of Commerce, respectfully opposed.

Joanne Bettencourt, on behalf of SIFMA, the Securities Industry and Financial Markets Association, in opposition. Great, thank you. See no other witnesses in the room in opposition. Moderator can you please queue up any callers for SB 278? Either opposition or support. Thank you. If you are in opposition or support on SB 278. Is that correct?

That is correct. SB 278.

Thank you. And please press one followed by zero at this time. One followed by zero. Go to line 42. You are open.

Good afternoon. This is white. On behalf of Disability Rights California, and we are in support.

And next, we will go to line 43. You are open.

Good afternoon. Natalie Bost, on behalf of the California Business Roundtable, respectfully opposed.

Line 36, please go ahead.

Brian Checko with the Legal Aid Association of California in support.

And one moment, Madam Chair. We have a few more queuing up. Line 38, you are open. Yeah.

Hi. Jason Sullivan-Halpern with the Long-Term Care Ombudsman Association, in support.

For anybody else, please press one followed by zero if you're in support or opposition to SB 278. And line 27, please go ahead.

This is Vivianne Mbaku with Justice in Aging, in support.

We do have a couple more with operators. One moment. Line 20, please go ahead.

Madam Chair, Honorable Members of the Committee, Norbert De Anda calling on behalf of the Office of the State Long Term Care Ombudsman, expressing support for Senate Bill 278.

Line 41, you are open.

Hello. This is Carol Sewell with the California Elder Justice Coalition, in support. Thank you.

Line 22, please go ahead.

My name is Ave Williams. I live in San Diego, California. I am calling to urge support for SB 278 as the daughter of a victim of elder financial fraud.

Thank you.

Thank you.

Line 32, you are open.

Pat McGinnis, California Advocates for Nursing Home Reform, in strong support of SB 278.

Madam Chair, we have gone through the queue. There are no more participants.

Great. Thank you very much. Members, we will bring it back to any questions or comments. Senator Min.

I had a question for the support witness, which is, I was just wondering basically if you might respond to the second witness from opposition. And in particular, I'm just wondering about the question. I had a brief chance to chat with you before this hearing, and you talked about a reasonable person's standard as being a safeguard against the types of problems that the opposition witness mentioned. And I guess I'm grappling with the specific question.

I'm very sympathetic, and I am a coauthor of this bill, but I'm very sympathetic to the idea of if somebody withdraws, an elderly person withdraws 21 times over seven months, like their entire life savings, that ought to be a red flag. But what should a reasonable teller, a reasonable bank person, manager do in that situation? I'm just curious what you see as their responsibilities.

Right. So right now, we do see banks refusing transactions, freezing accounts, and closing accounts when they have actual or constructive knowledge of fraud because as the opposition pointed out in their letters, they, too, lose money when this fraud occurs and the money gets transferred out of the elderly person's account. So they're also mandated reporters where they're supposed to report any suspected instance of elder abuse.

And while SB 278 does not tell any specific financial institution the specific things they have to do with respect to each transaction, it uses a reasonable person standard, which is an objective standard that says, based on all the surrounding facts and circumstances, including multiple red flags, such as 29 transactions in a two month period, all wired to a foreign country, uncharacteristically and sudden, if under all those facts and circumstances, all they have to do to avoid liability under the statute would be to act as a reasonable person or entity in a like position would.

That may be freezing the account, refusing a transaction--which banks, again, can and do do now--or if it's a single transaction, that might be reasonable to allow the transaction to proceed. So the reasonable person standard, because everything is fact specific and dependent on the circumstances, the objective reasonable person standard gives the banks the opportunity to do what they should already be doing, which is act reasonably as a similar person or entity in the same situation would.

So maybe like a temporary freeze or are you thinking, anticipating like a long--like what if--I'm concerned about some of the things raised by the opposition that they feel like there might be liability. How would you respond to their claims that under that circumstance, a freeze might leave a teller or manager open to liability?

Oh. Well, as far as, you know, leaving a teller or manager open for liability, I mean, in California, there's vicarious liability. So the bank who--if an employee acts, does a wrongful act in the course and scope of their employment--for example, assisting in financial elder abuse--the liability would be on the employer, not on the employee.

So then what about liability of the bank?

Right. They are able to freeze an account temporarily. It can be a three-day hold until they open it. They can warn the elder, like we've heard from the opposition and what they said in their letters, that they're trained to identify this. They take steps to ensure that this doesn't happen. So if they do those things, then that would be potentially acting reasonably as a reasonable, like bank or person or entity in a similar situation would.

So it's very fact-specific and it depends on each case, but there are ways to prevent it, and many banks do do a great job, some credit unions. Smaller banks do a great job of making sure that when it's obvious that there are multiple red flags of financial elder abuse, that they do not allow the transaction to occur because once it's done, it cannot be undone.

Got it. Thank you. And then I had a question for the author. Now, I had a chance to speak with opposition yesterday, and they told me that they were seeking a safe harbor on this bill where they would be exempt from liability if they follow certain procedures, and given some of the concerns raised, I expressed that I was sympathetic to that, and they had said that you had not negotiated with them on a safe harbor. So I guess I wanted to hear your response.

Yeah. First of all, that's what I said in my opening comments where somehow we went haywire. There was a misunderstanding. But I was expecting during this time period, we're certainly not going to negotiate again. I'm not going to negotiate against myself if they want to bring me something that makes sense, that's going to protect the consumer because at the end of the day, that's what we're trying to do here is protect the senior citizens that are getting ripped off.

And if in doing that, that also protects the banks from also having to pay out where they don't want to. So, yes, it's something. I had a conversation today--I'm sorry, Jason, right--yeah. California Bankers Association that happy to have those discussions and find some fruit there that perhaps some middle ground as we move this bill forward to try to get that sweet spot.

Thank you, Senator, for bringing this bill forward. This is obviously a pernicious problem in California and across the country, and I do think potentially a safe harbor, if it is in the interests of this bill, might be appropriate, but I trust your judgment in moving this bill forward, but I will be supporting the bill today and will move the bill.

Thank you very much. We have a motion. Next, we have Vice Chair Niello.

Thank you, Madam Chair. Senator Dodd, you and I are close personal friends for many years before politics, and not everybody here knows this. And I would like very much to support every bill that you introduce because of that. Perhaps in another environment over wine or beer, we can talk about the yeas and nays, but I support what you're trying to do. Elder abuse of any sort, financial or otherwise, is a horrible thing. There's no doubt about it.

I don't know that we can ever completely prevent it, but we need to do all we can. I think, though, that the testimony of the opponents presented good reason that there is a high probability of unintended consequences in this legislation.

And the discussion notwithstanding about the reasonable person in this context, I think it may be just an invitation to litigation, but as I said, more importantly, unintended consequences. We do a lot around here and we really need to work to not do it, and I think this bill needs work because of that. And I would urge that, but I can't support it today.

It's fine. It's okay, Roger. Senator. Senator Roger.

Thank you, Bill.

Thank you. Senator Caballero.

It's a little bruh moment here. So, Senator, I understand what you're trying to do here. I appreciate it because what you realize is that as we mature and we age, all of a sudden, all of these phone calls and emails and just some really predatory stuff pops up either on your newsfeeds or coming through--up until last week, I still had a landline and my landline is full of scams. This is the IRS calling.

You owe us money and we're going to come out and we've issued a warrant. We're going to give you a minute to figure this out and then we're coming for you. Anyway, it is pernicious and it preys on people's inability to kind of think through things and makes people jump and do things. So, I appreciate what you're trying to do. I do think that there's some work that's needed. I agree with my good friend from Irvine that there's a need for a safe harbor.

In other words, if the bank does x, y, and z, that then whatever comes next, they're protected. And I say that too because my mother passed away a year ago and I had her power of attorney for a number of years because she was suffering from Alzheimer's and trying to get things taken care of at the bank.

Even though I was the attorney of record and I had a power of attorney and I had all the paperwork, was really hard because they were trying to make sure that it was legit and that it was on the up and up, and I get it. So you want to make sure that you're protecting the consumer but also not making it so difficult that people can't take care of the basic needs of seniors that are there.

And I can see my father going down to a bank and just saying, 'I'm elderly, but I have the right to do what I want with my money as well.' And so there has to be a way for the bank to be able to say, yes, we agree, and here's a process you have to go through in order to make sure this is a good thing.

What would be really helpful is to know what is the way that most fraud happens so that we can then craft for it. My guess is it's around wire transfers, but I don't know, and I don't know if banks can transfer electronically or whether you have to go down to Western Union. So there's some more work that should be done.

I'm going to support it today, but want your commitment that you'll continue to meet with the parties that are affected by it and do your best. And I know you will because you work on very difficult bills and usually come to a resolution where you get people off of opposition, so, rely on you on that.

Thank you. Senator Portantino.

Thank you, Madam Chair. I'm sorry I missed earlier discussion, but was presenting in another Committee, but I share the comments of my colleague, Ms. Caballero. This is an important issue, and I know the author deeply cares about the issue. And we all have had constituents, maybe even family members, who have been victim of elder abuse and scams, and it's not something we don't hear in our districts. That being said--and I'm going to support the bill today.

That being said, I do think there's room for the conversation. And just in the one point that the author made about who might be generating potential amendments, whether it was the author's office or the opposition, I think that just sort of cries out from the need to have that face to face conversation. I know this bill is going to Judiciary next, and so there's opportunity and time to have that conversation.

So I think getting the parties in a room and having a face to face conversation with the amended bill--I know there were earlier conversations--I think could only lead to a better, more implementable product because what we want here is something that's going to protect our seniors to the fullest extent possible, but not have unintended consequences. So I think there's a path to get there, and I encourage the parties to have that conversation because I think it's important.

And obviously, there's another opportunity, another Policy Committee, and then depending on how that bill comes out of that Committee, whether there are costs or not, so just encourage you to have that conversation. And you and I have talked about that. Thank you.

Thank you. And I think that this bill presents an important opportunity for us to have a conversation. Since 1991, the Elder Abuse Independent Adult Civil Protection Act passed, so that's over three decades. And in those three decades, despite all that we have done as a state and as a country to put law, regulations, guidelines in place, elder abuse has only increased. The problem is 3.4 billion a year in this country. This is not little.

And as far as I know, and I can see at the moment, this is the only elder abuse bill in the Legislature, in the banking space. There are others that are going through the process. And so for me, I think your bill has allowed for us to have a needed conversation. As has been stated, all of us, 58 different counties, have experienced elder abuse.

And so I think what we are looking for is certainly a way to have a conversation about an important issue that's impacting our constituents. Today's, we heard of a horrible example, and my heart goes out to you, to your family for everything that you've been through. And I also know that it's not just us here who care. I really also believe that when the financial institutions say they don't want this to happen, they don't. They don't.

And so I think that this is something that we all have to work on. In terms of what we work on, I really am hoping that we can get more specificity from both sides. I think that my concern in leaving this too broad is that the guidelines to protect our elders aren't clear enough. And there's also concerns in making it too specific and making it too specific and believing that our specificity would encompass every single situation that happens.

I think that, additionally, if there isn't a point of understanding on how we can take a policy and an outcome that we'd like to a place where it can be in practice implemented in a great way, I worry that the default will be denial. And the second that we are denying elders the opportunity to make financial decisions for themselves, it becomes a form of discrimination. And so I'm wondering where we land on this, and I think that that's an important piece.

I do feel that the analysis provides some guidelines, and one of the ones that I think, for me, that I still struggle with has to do with the definition of the concept of assisting. And I think that that's probably an area where we have to define more specifically what that looks like. There is not a concept of assist that's clearly defined in law at the moment. And so that is one of the pieces that I hope we will be able to discuss.

I will be supporting this bill. I think everybody wants to find a place where this important issue is addressed and the outcome that we all share, financial institutions, everyone here, you as the author, is really something that will achieve protecting our elder community and not having these situations that have been brought forward to all of us today and in our district continue to happen at such a rapid, rapid pace.

I also want to recognize that despite all the best efforts, sometimes those that fraud people are one step ahead with a lot of tools, technology to be able to do this. So with that, I will also be supporting this bill, and we'll allow you to close before we take a vote.

Thank you, Madam Chair. Thank you for those comments and thanks to you and your staff for the assistance that we had with some of the amendments. I take to heart what my colleagues say here. I guess at the end of the day, what I'm willing to do is meet in person, but there are going to have to be--I'll just be clear here that my obvious concern is for the seniors.

So there's going to have to be some positive action on financial institutions parts, not just, 'here's our training program,' because that doesn't protect seniors. I think I got the commitment this morning that we'll go ahead with those conversations. I know most of the people that are on the opposition and respect them and look forward to those conversations.

Thank you. And with that, we do have a motion by Senator Min. The motion is 'do pass, but first re-refer to the Committee on Judiciary.' Can we please call the roll?

Senate Bill 278: motion is 'do pass, but first be referred to the Committee on Judiciary.' [Roll Call].

Thank you, Madam Chair and Members.

Thank you. That bill has four votes, and we will leave the roll open for people to add on next. I see that we have Senator Durazo here, and Senator Durazo will be presenting Senate Bill 594. Thank you.

Thank you, Madam Chair and members, SB 594 aims to establish transparency in the ownership of limited liability companies and similar corporate entities. This Bill requires that LLCs, corporations and real estate investment trusts disclose the name of owners with substantial control over the entity when they are created and when they submit their biannual filings. Existing law allows for the creation of LLCs and similar entities in order to provide legal protection for assets not owned by the LLC.

Often, however, owners abuse LLCs to shield not only their assets, but also their identities. Right now, there is no required public disclosure of who the real owners of LLCs or corporations are. Many LLCs are owned in the name of another LLC, which creates an additional layer of anonymity. None of this is necessary to achieve the legal and the financial protection that is afforded by forming an LLC.

The ability for LLCs to abuse a structure to remain anonymous ends up presenting numerous issues and even enables unscrupulous and illegal practices. For instance, anonymous LLCs are pervasive among employers that skirt laws meant to protect workers. Deceitful employers can use LLCs to avoid responsibility for underpaying workers, violating meal and rest break periods, and ignoring occupational health and safety regulations.

By the time a business is found responsible for violations, the owners have dissolved the LLC and created a new one, leaving nobody to pay back wages or address safety issues. It can take years for the justice departments and labor agencies to connect the dots to show that a single person is responsible for repeated violations, allowing abuses to continue largely unimpeded.

Contractors can also split construction projects across LLCs to present the appearance that the contract is under the local cost threshold, when in fact the total cost can be above a project labor agreement trigger. The lack of owner transparency also provides an avenue to skirt responsibility for substandard housing when property owners can hide behind a web of LLCs. Tenants and local enforcement officials are often frustrated in their attempts to obtain repairs because they can't find the true owner responsible for the property.

SB 594 is a good governance bill. It does not change any of the legal protections afforded to these entities. It simply requires the disclosure of an LLC or similar corporate entity's beneficial owner name and address. This is the same information that we ask from the CEOs, directors, managers, and members. Without owner transparency, policymakers, enforcement agencies, and the public lack critical information to make informed policy decisions.

Today, I have with me two witnesses in support of this bill, Jyotswaroop Kaur Bawa from the California Reinvestment Coalition and Ruth Silver-Taube, supervising attorney at the Santa Clara University School of Law. I believe Ms. Taub will go first.

Good afternoon, Senators. The ability to use and abuse LLCs to create anonymity allows dishonest employers to play shell games and avoid complying with laws that protect workers. This happens across a variety of industries, including hospitality, construction, nursing homes, the ports and other low-wage industries.

In my work, I see this happen all the time. I supervise a workers' rights clinic at Santa Clara University Law School. I recently worked with a Labor Commission attorney on a wage theft and retaliation case where we had to name 11 hotel and restaurant entities because we did not know the names of the owners. We would not have had to name so many entities or experience such a long delay if we knew who was on the hook.

In low-wage industries, LLCs are often used to hide assets and make it hard for workers to ever recover wages even after there is a judgment. In one of our restaurant cases, the restaurant changed hands 21 times or every time there was a judgment, those owners can simply dissolve their business and quickly set up shop under a new name while still maintaining ownership and register with the Secretary of State's office, all without having to disclose who the real owner is.

If workers don't know who the owners of a business are, they would be unable to file wage claims with the Labor Commission because the owner could not be served. We've heard that one of the most time-consuming activities for the Labor Commissioner's office is trying to determine who the employer is. Prosecutors could also better identify lawbreaking individuals in a criminal case and show a pattern of abuse if they could identify a single person or entity responsible for the repeated violations.

Requiring LLCs and companies to include their beneficial owner in their business filings will provide additional transparency and accountability. This is why we need SB 594, a good governance bill, and I respectfully ask that you support this effort and vote aye. Thank you.

Thank you. Additional witnesses in support.

Hi, good afternoon. I'm Jyotswaroop Bawa with the California Reinvestment Coalition. As stewards of responsible use of taxpayer dollars and government efficiency, we hope you will support beneficial owner transparency.

Last year, as part of a bank mortgage-related investigation, we found California bank's community reinvestment program relying heavily on lending specifically to landlords in what are essentially previously redlined neighborhoods. We discovered dozens of loans connected to infamous slumlords. Reinvestment, as you know, is capital that is supposed to serve community needs and rectify harms caused by redlining. Instead, this capital was helping bad landlords with unlawful business practices grow their operation, and the unknowing regulators were giving this bank CRA credit for it.

You see, this kind of Intel is not always available to us statewide, but with SB 594, we could build an infrastructure to better inform regulators and state and local officials about the impact of lending in our communities, thus increasing the efficiency and impact of private capital investment.

Similarly, we could use this information to also guide taxpayer dollar investment that is deployed via necessary emergency relief aid like the PPP program and the Emergency Rental Relief program by ensuring that law-abiding businesses, business people who fuel our economy, have access and are not cut out of line by nefarious actors who bog down our justice apparatus.

Lastly, in defense of first-time home buyers, I'd like to point out that our research shows that in Q four of 2021, when interest rates were a historic low, 75% of all purchases made by LLCs were in cash. These are not small investors. These are large operations growing as monopolies.

A report earlier in the year showed that just 10 of the largest landlords had amassed $191,000,000,000 cash on hand during the pandemic and were readying for a buying frenzy in a state that is already stressed by housing unaffordability. Further consolidation under large corporate landlords has undoubtedly made things worse for small investors, tenants and first-time homebuyers in particular.

Families cannot compete with $191,000,000,000 in cash. Owner opacity and the resulting lack in data for cities, counties and electoral districts is a barrier to designing and moving policy that addresses all these issues effectively. So for these reasons, we humbly thank you for your thoughtful consideration and support of SB 594.

Thank you. Any other witnesses in support, please just say your name, affiliation and position.

Good afternoon, Chair and members, Brian Augusta. On behalf of the California Coalition for Rural Housing, the California Rural Legal Assistance Foundation, the National Housing Law Project, and the Public Interest Law Project, in support.

Good afternoon, Chair and members, Amy Hines-Shaikh with Wildcat Consulting representing Unite Here Local 11 and the California Community Land Trust Network. Thank you.

Mariko Yoshihara, on behalf of the California Employment Lawyer's Association and the California Coalition for Worker Power, in support. Thank you.

Lauren Ahkiam for the Los Angeles Alliance for a New Economy and the Santa Clara County Wage Theft Coalition, in strong support. Thank you.

Mitch Steiger with the California Labor Federation also in support.

D'Artagnan Byrd with the American Federation of State County Municipal Employees, in support.

Mark stairs with the California Housing Partnership, in support.

Prince Osemwengie from inclusive action for the city, in support.

All right. Thank you. Any witnesses in opposition. Seeing no witnesses in opposition, we will move to the teleconference line. Moderator can we please queue up any comments in support or in opposition of SB 594.

Thank you, Madam Chair. If you are in support or opposition to SB 594, please press 1 0 at this time. One followed by zero. And one moment, please. We have a couple queuing up. For anybody else, please press 10 if you're in support or opposition to SB 594. And we will go to line 55. You are open.

Thank you. Kimberly Rosenberger with SEIU in support.

And we will give a final reminder. One followed by zero. To testify in support or opposition to Senate Bill 594 and line 44, you are open.

Good afternoon, Madam Chair and members. Karim Drissi, on behalf of the California Association of Realtors, in opposition, sincerest apologies for the lateness of our coalition letter. Respectfully request a no vote. Thank you so much.

Madam Chair. There are no other participants queued up at this time.

See no other witnesses or testimony over the conference line in support or opposition members, any comments or questions? Vice Chair Niello. And we do have a motion from Min to move the bill.

Thank you, Madam Chair. Senator Durazo, this paints an awfully broad brush and implicates a lot of limited liability companies, thousands of which are very involved in their local community and more than adequately known. I just happen to be an owner of one myself. But you paint the brush pretty broadly. Yesterday, you supported Senator Menjivar's SB 371 that offered pretty generous allowances to businesses in the BreEZe system to not disclose their home address.

And I recognize the issue you have with bad actors, but as I said, as bad as they are, they're still a pretty small minority of the limited liability companies out there. So I'm wondering what's different between that population and this population, other than the small number of bad actors? Relatively small.

Well, what I aim to do with this is get some very simple information. If you look at the Secretary of State's form. Right. The information that we'd be asking for is simply the name of the beneficial owner and either their personal or residential address. Just to know who they are. Whether there's a lot of bad actors or just a handful, I think it's important to have the accurate information that just should be available to public.

A lot of it is already reported to the Secretary of State. We just need to get that final bit of information.

All right, thank you, members. Any other questions or comments? Seeing none, I will just comment that I think that this is important and there's a lot of reasons to want more information.

Certainly, I also hope that some of the policy questions outlined in pages 8 and 9 of the analysis will be considered in the future as this bill moves forward, really to strengthen, I think the bill, and I think there's some just questions that are important, I think, to note. I also want to recognize that Senator Hurtado, who is not here or present, has a bill she's, I think, going to be working with you on your particular bill.

So it is an interest of multiple members of the Senate to really think about transparency in this particular space. So with that, would you like to close?

I ask for your aye vote, thank you.

Thank you. We have a motion by Senator Min, and the motion is due pass, but first re-referred to the Committee on Judiciary. Can we please call the roll?

Senate Bill 594, motion is due pass, but first re-referred to the Committee on Judiciary. [Roll Call]

All right, the Bill has five votes, and we will leave the roll open for additional Members to add on. Thank you. Thank you, Madam Chair. All right, and now we have our final Bill. We have Senator McGuire. And this is Senate Bill 455. Changing it up. I like it.

There we go. The podium is so awkward, right? Because it's not high enough. And so there we go. Exactly. Madam Chair, first and foremost, I just want to say thank you for hearing the Bill today, number one. And also thank you for being accommodating this afternoon and know how busy a schedule you have. Madam Chair SB 455 is a common sense piece of legislation that will protect fire and other disaster survivors and keep their home rebuilds on track.

Madam Chair, I know that we have support, support recommendation. So I'll truncate the statement here and knowing that folks have other committees. Long story short, there have been literally hundreds of cases since 2015 where a home rebuild is underway and a mortgage is sold and that new mortgage company changes the terms for that fire survivor.

Some new mortgage companies have added additional terms to existing rebuild agreements, such as requiring more information and inspections, which then significantly delays the payout and delaying the rebuild of the home for months. In other cases, where the homeowners were underinsured and the original mortgage company had signed off on a rebuild of a smaller house, the new mortgage company didn't honor that agreement, and that new company then refused to release all the remaining funds because the rebuild was different in the lost home.

So what SB 455 would do is make sure any agreements made between homeowners and their mortgage company on the rebuilding their home after disaster are disclosed to the new company if the mortgage is sold. And it also requires that the new financial institution honors the original agreement. Again, common sense. And it's only in those spaces where we have a disaster and a rebuild. And it ensures that the existing rebuild agreements are honored when mortgages are sold.

Now, I will also say a few thank yous. I want to say thank you to the California Bankers Association, the California Mortgage Bankers Association, and the California Community Banking Network for their direct engagement. I will tell you, Madam Chair, we are continuing conversations, and I'm committed to be able to make some future amendments on this Bill based off of some of the housekeeping amendments that they're advancing. And I'm grateful for that.

But bottom line is disaster survivors already face tremendous challenges, recover from the impacts, and we need to ensure that we help them rebuild their homes and lives properly. Today, I have Kendall Jarvis. She's the Lead Disaster Relief Attorney for Legal Aid of Sonoma County. I want to say thank you, Madam Chair, to legal aid for all the work that they do for fire survivors and would respectfully ask for an aye vote.

Thank you, Senator Mcguire. We'll go ahead and hear from lead support. Fair enough. Thank you, Madam Chair. Committee Members. Thank you. My name is Kendall Jarvis, and I've been the Lead Disaster Relief Attorney for Legal Aid of Sonoma county for the past five and a half years. I'm here today to express legal aid support for Senate Bill 455.

The intent of SB 455 is to ensure that survivors of declared disasters who experience the total loss of their home are able to rebuild without the transfer of their mortgage, causing additional unnecessary delays during the rebuild or repurchase process. I will now read a statement from a client expressing how this issue can impact families dear Committee Members, my name is Nina Hugh Gill and I am writing today to express my sincere support for Senate Bill 455.

My husband, our three sons, and I lost our home as a result of the Sonoma complex fires. Shortly after suffering that loss, we discovered that we were significantly underinsured. After working with numerous contractors, we were finally able to identify a plan that would allow us to rebuild. Subsequently, we presented our plan to our mortgage company and they agreed to release the funds accordingly. When we decided to rebuild, we knew that we would have to use all of our insurance proceeds and cut costs to do so.

For this reason, my family and I moved into an rv on our friend's parcel while we were rebuilding because we did not have the financial resources to pay for temporary housing that would allow us to keep our children in the same schools. It is important to understand that we spent significant time, effort, and energy negotiating with our insurance company and identifying a way forward that would allow us to rebuild.

Once we identified a way forward, our insurance company and mortgage company were both made well aware of the fact that we would have to use all of our insurance proceeds to rebuild and be left precariously housed until the rebuild was complete. Unfortunately, after my family and I entered into a rebuild contract and began the process of rebuilding with the approval of our mortgage company, our mortgage was then transferred to a new mortgage servicer.

At the time our mortgage was transferred, our rebuild was roughly 80% complete and our projected move in date was on the horizon. Unfortunately, our new mortgage provider refused to release the funds as previously agreed, which caused significant delays and ultimately put my family and me in a position where we were forced to remain precariously housed and fearful that we may not be able to complete our rebuild.

It is my strong belief that my family and I never should have gone through the trauma associated with losing our home and then facing obstacles like this that are entirely preventable. Mortgages should not be transferred in a manner that jeopardizes a survivor's ability to rebuild according to an existing contract. The loss of our home itself was incredibly painful, but honestly, it is largely a pain and secondary trauma from issues like this that has nearly broken us.

This is why my family and I wholeheartedly support SB 45. We do not want to see another family face the same unnecessary trauma, delays and financial hardship when it should be so easy to prevent. Thank you for your time. Sincerely, Nina Hugh Gill. And beyond that, I'm here to answer any questions, if I can be helpful. Thank you.

Thank you. That was some serious speed reading. Thank you. All right. It was good. It was good. So, any additional witnesses in support? Seeing no additional witnesses in support in the room. Do we have any witnesses in opposition in the room who would like to testify? See no witnesses in opposition in the room. We will go ahead to the phone lines. Moderator, can we please queue up any individuals who want to testify for Senate Bill 455?

Thank you, ladies and gentlemen, if you would like to testify, please press one, followed by zero. Madam Chair, nobody has queued up.

Great. Thank you very much. So, Members, we will bring it back to any Members for questions or comments or emotion. Thank you. We have a motion by Senator Bradford. I don't see any Members with additional comments or questions. Would you like to close?

We respectfully ask for an aye vote. And thank you again, Madam Chair.

Thank you. All right, so this Bill has a do pass, but first re refer. Shocking. To the Committee on Judiciary. Can we please call the roll?

Senate Bill is do pass, but first be referred to the Committee on Judiciary. Senator Limon. Aye. Limon aye. Niello. Aye.

[Roll Call]

All right, the bill has seven votes. Thank you very much, Members. We will now go ahead and open the roll for any Members to add on. We will begin with Senate Bill 54.

Senate Bill 54. Motion is do pass, but first be referred to the Committee on Judiciary. With the chair voting aye. [Roll Call].

All right, that has five votes. Next is Senate Bill 278.

Senate Bill 278. Motion is do pass, but first be referred to the Committee on Judiciary. Senator Limon voting aye. Senator Bradford. Senator Nguyen. That one has four.

All right, that has four votes. Next is Senate Bill 455. That. We just did that. Sorry. That everyone voted on that. Next we have Senate Bill 594.

Senate Bill 594. Motion is do passed, but first be referred to the Committee on Judiciary. The chair is voting aye. Senator Nguyen. Senator Nguyen, No.

All right, that has five votes. And the final item is the consent calendar.

The consent calendar. The chair voting aye. [Roll Call}

All right, the consent has seven votes. And with that, Members, we will go ahead and adjourn our Committee on banking and financial institutions.