CA AB493

Requires financial institutions holding hazard insurance proceeds in loss draft accounts during property rebuilding or repair to pay borrowers at least 2% simple interest per annum on those funds

Prohibits financial institutions from imposing fees or charges on loss draft accounts that would effectively reduce the interest rate below 2% per annum

Authorizes financial institutions to deposit hazard insurance proceeds in interest-bearing accounts at federally insured depository institutions, federal home loan banks, federal reserve banks, or similar government-sponsored enterprises

Applies to loans secured by one- to four-family residential properties in California; exempts proceeds that federal or state regulators require to be held in non-interest-bearing trust accounts

Takes effect immediately as an urgency statute to protect wildfire victims and others from financial institutions withholding interest on insurance payouts during rebuilding