California Legislature Passes AB 801, Calling on Governor Newsom to Protect Borrowers of Color From Mortgage Discrimination
Media Contact
Danielle Bell
Associate Director of Narrative Strategy
media@greenlining.org danielle.bell@greenlining.orgGovernor Newsom Must Sign AB 801 to Strengthen Fair Lending Enforcement and Protect Vulnerable Borrowers in California
Sacramento, CA – The California Legislature passed AB 801, the California Fair Lending Examination Act, authored by Assemblymember Mia Bonta and sponsored by The Greenlining Institute. The California Black Caucus priority bill now heads to Governor Gavin Newsom for his signature.
AB 801 strengthens California’s ability to identify and address discrimination in mortgage lending by requiring the Department of Financial Protection and Innovation (DFPI) to regularly examine lenders for compliance with fair lending and nondiscrimination laws.
“We see what mortgage discrimination means for communities of color every day: families who are ready to buy a home face higher barriers to getting approved, pay more for the same opportunity, or are shut out altogether,” said Max Vargas, President and CEO at The Greenlining Institute. “Those barriers shape who gets to build wealth, put down roots, and pass something on to the next generation. California has an opportunity to lead. We urge Governor Newsom to sign AB 801 and ensure regulators have the tools and mandate needed to protect borrowers of color from discrimination and out of control costs.”
Strong state oversight is especially important for nonbank mortgage lenders, which have become some of the largest mortgage lenders in California and are a major source of home loans for communities of color. As the mortgage market has changed, California’s approach to oversight and enforcement must keep pace.
For generations, redlining and discriminatory lending denied communities of color access to homeownership and the wealth and stability it can provide. Those disparities persist today. Greenlining’s analysis of Home Mortgage Disclosure Act (HMDA) data has consistently found that communities of color have less access to home loans than white borrowers and often pay more when they become homeowners.
At the same time these disparities persist, the federal government is dismantling fair lending protections and retreating from enforcement. California cannot outsource borrower protection to a federal system that is actively stepping away from it. The state has a responsibility to act.
“Homeownership is the primary vehicle for building family wealth in the United States, yet California’s communities of color continue to face documented disparities in access to credit,” said Assemblymember Mia Bonta. “As the Trump administration guts fair lending enforcement by eliminating disparate-impact protections under federal credit law, gutting HUD’s fair housing staff, and dropping redlining prosecutions, AB 801 ensures California fills that gap by requiring regular examinations of covered mortgage lenders for compliance with nondiscrimination laws. This is a consumer protection bill that shows California’s willingness to lead even when the federal government will not.”
The Greenlining Institute thanks Assemblymember Mia Bonta for her leadership in advancing AB 801 and urges Governor Newsom to sign the bill as part of furthering his legacy of protecting communities of color and lowering the costs of homeownership.
Supporting organizations: Consumer Federation of California, Southern California Black Chamber of Commerce, CAMEO Network, Public Counsel, Access Plus Capital, Small Business Majority, End Poverty in California (EPIC), Housing and Economic Rights Advocates, California Public Banking Alliance, Asian Business Association, Inc., The Unity Council, Georgia Advancing Communities Together, Inc., Center for Responsible Lending, Ventures, Consumer Action, Economic Empowerment Center DBA Lending Link, Arkansas Community Organizations, AnewAmerica Community Corporation, Asian Business Association of Silicon Valley
