Summary
SB-946 repeals the January 1, 2027, sunset on existing provisions of the Consumer Credit Reporting Agencies Act (CCRAA) that extend credit-report protections to escrow agent rating services.
Background
Banks and mortgage lenders often hire outside companies to handle important parts of the mortgage and settlement process. In 2012, the Consumer Financial Protection Bureau (CFPB) told banks and mortgage lenders that they could be held responsible for problems caused by the outside companies they hire. As a result, the CFPB urged lenders to protect consumers better in these partnerships. This guidance pushed lenders to watch their vendors more closely and keep proof they were following the rules. Because of this, lenders started using third-party companies called "risk manager providers" (RMPs). These companies created databases and scoring systems, similar to credit scores, using both public and private information. Some RMPs even charged escrow companies fees to stay "accredited" and remain on approved lists.
Concerns quickly emerged that these services could rely on inaccurate or outdated information, and that escrow professionals could lose business or be forced out of the industry without a meaningful way to see or correct what is being reported. To address these concerns, California enacted AB-1169 (2013) to apply key protections from the Consumer Credit Reporting Agencies Act to escrow agent rating services, including access to information, the right to dispute and correct errors, accuracy standards, and safeguards for personally identifiable information.
These protections remain important today because escrow companies still report instances of third-party vendors seeking highly confidential data such as Social Security numbers, bank account information, and copies of driver’s licenses or passports. Escrow professionals can face “take it or lose the business” situations when lenders require a vetting result. Since 2013, the Legislature has extended these protections through AB-2416 (2016) and SB-360 (2021), with no known implementation problems. The sunset expires in 2027. To ensure these protections remain in place, SB-946 makes these safeguards permanent.
Proposal
SB-946 makes these protections permanent, keeping things fair for both sides so lenders can still check on escrow agents, and escrow agents are protected from unfair treatment and misuse of their personal information.