The American Bankers Association joined the California Bankers Association and other industry groups in a letter opposing A.B. 1436, a bill introduced in the California legislature that would mandate specific outcomes for mortgage forbearance relief, require excessively prescriptive post-forbearance repayment and impose significant legal liability. “While we appreciate the intent of the bill, we believe that it undermines the positive impacts of existing efforts and protections and may ultimately delay the speed in extending important relief to impacted borrowers,” they wrote.
The bill’s broad scope may distract from lenders’ present efforts to provide forbearance options, the groups said, and it suffers from a lack of acknowledgement that servicers are intermediaries with their own contractual obligations. The bill also creates potential conflicts with federal law, the groups said, “upend[ing]a national approach deployed through the CARES Act and federal agencies.”