By Michael Belote, Esq., California Advocates, UTA California Lobbyist

In 1786 Scottish poet Robert Burns wrote one of the most famous lines in western literature, paraphrased later by Californian John Steinbeck: “The best laid plans of mice and men often go awry.”  Try as we might to plan for the future, the future always wins. This is the theme of our look at the California legislature in 2025.

Coming out of the November general elections, Democrats both nationally and in California were confused, dispirited, and yes, a little chastened.  After all, they had lost the U.S. Senate, House of Representatives, and the White House. In California, still a very blue state, they had lost a net three seats in the Assembly and Senate.  And voters had tacked right, most notably with the overwhelming passage of Proposition 36, relating to theft crimes.

At that time, the idea moving forward was to focus on bread and butter issues important to working people, especially cost of living, and to position California as head of the anti-Trump resistance.  It is fair to ask how much California policymakers, or even President Trump, can really do about the cost of living. But voters want to know that at least elected officials recognize and care about kitchen table issues like rent, gas prices and food.  President George H.W. Bush lost his reelection in part because he famously couldn’t respond to a question about the price of a gallon of milk.

Exactly one day after the legislature returned to Sacramento to commence the 2025 legislative year in earnest, the fires began in Pacific Palisades.  Of course there have devastating fires before, and relatively recently, including Paradise and the wine country, but this felt different.  This was not rural, and it wasn’t forested.  Palisades and Altadena are established bedroom communities in California’s biggest and most important county.

The legislative response has been swift and way more far-reaching than anything which occurred after Paradise or Sonoma County.  So far, the attention has focused on AB 238 (Harabedian), which essentially mandates non-discretionary forbearances for two 180-day periods upon the self-attestation that the borrower was directly or indirectly impacted by the wildfires. As an urgency measure, AB 238 would take effect immediately upon the Governor’s signature.

So far AB 238 has passed the Assembly Banking and Finance, and Judiciary committees with unanimous, and even bipartisan votes.  Although there has been talk of amendments, none have yet been taken. As of this writing, the bill is headed for the Assembly Appropriations Committee, which has jurisdiction over issues of fiscal costs to the state.

A large coalition of real estate and lender groups has formed to respond to AB 238, including banks, mortgage banks, mortgage brokers, credit unions, title companies, Realtors, and trustees.  Meetings have been held many key legislators and with Assembly Member Harabedian, a lawyer and freshman legislator with offices in Pasadena and Claremont. Mr. Harabedian is not some anti-business zealot, and he has acknowledged that some amendments are likely to his bill.

The bigger question, of course, is whether something like AB 238 should constitute some sort of template for future mortgage issues when natural disasters occur.  If this is in fact the new normal, shouldn’t there be a consistent public policy response?  And shouldn’t that response be consistent regardless of the location of the disaster, or the regulator of the particular mortgage lender?

As to Governor Newsom, he had to modify his position as resister-in-chief, for the simple reason that California’s response to the fires will depend in significant measure on the assistance of the Trump administration.

Finally, under the category of best laid plans, consider Ricardo Lara, Commission of the Department of Insurance in California.  Over the fall and early winter, Commissioner Lara was busy implementing his plan to revitalize the homeowner’s insurance market and prevent the collapse of the FAIR Plan.  The plan includes speeding up premium increase applications, allowing insurers to use likely future events in their premium modeling, and recognizing reinsurance costs in premium increase requests.

As the plan was being rolled out, the fires occurred,  obviously increasing both the scope and urgency of the homeowner’s insurance crisis.  A large number of bills have been introduced to address the issue in one fashion or another. Home hardening, anyone?