SB 1320: Financing statements: residential real property.
The bill aims to regulate financing statements in owner-occupied residential real property. It prohibits the filing of a financing statement that creates or perfects a security interest in the owner-occupied residential real property. This rule applies to prevent the unauthorized creation of liens on owner-occupied homes. Violators of this rule, including those who knowingly file a financing statement, may be liable to the property owner. The goal is to protect homeowners from unwanted liens on their property.
| Apr. 27, 2026 | April 28 set for first hearing canceled at the request of author. |
| Apr. 10, 2026 | Set for hearing April 28. |
| Apr. 08, 2026 | Re-referred to Com. on JUD. |
| Mar. 24, 2026 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on RLS. |
| Mar. 04, 2026 | Referred to Com. on RLS. |
| Amended IN Senate March 24, 2026 |
| Introduced by Senator Archuleta |
February 20, 2026 |
LEGISLATIVE COUNSEL'S DIGEST
Existing law requires a collecting bank, as defined, to exercise ordinary care when performing specific duties in a commercial banking transaction, and limits the liability of a collecting bank for the insolvency, neglect, misconduct, mistake, or default of another bank or person or for loss or destruction of an item in the possession of others or in transit, as specified.
This bill would make a nonsubstantive change to this provision.
The people of the State of California do enact as follows:
SECTION 1.
Section 9527 is added to the Commercial Code, to read:9527.
(a) For purposes of this section, “owner-occupied residential real property” means residential real property that is occupied by an owner of record as the owner’s primary residence at the time the financing statement is filed.(a)A collecting bank shall exercise ordinary care in all of the following:
(1)Presenting an item or sending it for presentment.
(2)Sending notice of dishonor or nonpayment or returning an item other than a documentary draft to the bank’s transferor after learning that the item has not been paid or accepted, as the case may be.
(3)Settling for an item when the bank receives final settlement.
(4)Notifying its transferor of any loss or delay in transit within a reasonable time after discovery thereof.
(b)A collecting bank exercises ordinary care under subdivision (a) by taking proper action before its midnight deadline following receipt of an item, notice, or settlement. Taking proper action within a reasonably longer time may constitute the exercise of ordinary care, but the bank has the burden of establishing timeliness.
(c)Subject to paragraph (1) of subdivision (a), a bank shall not be liable for the insolvency, neglect, misconduct, mistake, or default of another bank or person or for loss or destruction of an item in the possession of others or in transit.