After fielding more than 160 complaints about delayed insurance funds meant to help California fire survivors recover, mortgage lenders faced pressure to respond.
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According to the Santa Monica Mirror, California’s Department of Financial Protection and Innovation and the Business and Consumer Services Agency opened a formal inquiry into whether banks and credit unions illegally withheld insurance payouts tied to the Eaton and Palisades fires in Los Angeles County.
Scrutiny focused on whether lenders kept money after loans were paid off, slowed the release of funds, or failed to give borrowers clear appeal options. An administrative order required institutions to explain how they handled insurance proceeds for property loss, personal property, and living expenses.
Officials said they logged more than 160 formal consumer complaints since early 2025 from people who encountered problems with rebuilding funds held in escrow…