AB 493: Mortgages: hazard insurance proceeds.

This bill would require financial institutions to pay interest on hazard insurance proceeds held in a loss draft account pending rebuilding or repair of a property. The interest rate would be at least 2% simple interest per annum, starting from the bill's effective date. Financial institutions would not be allowed to impose any fee or charge that would result in an interest rate lower than 2% per annum on the amounts held. This provision would not apply to hazard insurance proceeds held in a non-interest-bearing demand trust fund account required by a state or federal regulatory authority. The bill would take effect immediately as an urgency statute.