LOS ANGELES — The California Business and Consumer Services Agency and the Department of Financial Protection and Innovation ordered financial institutions on Thursday to report on their handling of insurance payouts for survivors of the Los Angeles fires. The agencies warned that lenders who fail to comply with the reporting order are subject to state enforcement.

California is investigating whether lenders delayed payments to survivors, failed to provide a timely appeal process for decisions about releasing funds, or held insurance money after a loan was fully paid. Licensees must provide written explanations to the Business and Consumer Services Agency and the Department of Financial Protection and Innovation regarding whether all funds were disbursed to survivors, how long disbursements took, and reasons for any delays or withheld funds as of September 30, 2026.

The mandatory report requires lenders to share information regarding the size and distribution of insurance proceeds received from insurance companies to pay wildfire survivors for property loss or damage, including personal property and living expenses. The Department of Financial Protection and Innovation has received more than 160 confidential consumer complaints reporting delays or issues with insurance disbursements since January 2025.

Governor Gavin Newsom directed the Business and Consumer Services Agency and the Department of Financial Protection and Innovation to collect complaints about delayed or denied access to funds. He wrote to associations representing banks, credit unions, and mortgage lenders in July regarding concerns about delayed or denied access to insurance funds.

"Survivors' ability to access the insurance coverage they've paid for is foundational to recovery," Newsom said. "Financial institutions have a critical role to play as families move from immediate stabilization to rebuilding their homes, their businesses, and their lives. The last thing survivors need is unnecessary red tape, delays, and barriers standing between them and the relief they deserve."

California Business and Consumer Services Secretary Rohit Chopra said the state would hold firms accountable for failures that impede access to owed money. "It's unacceptable that after running through a gauntlet of paperwork to file insurance claims, some wildfire survivors still have not gotten access to the funds they need to rebuild," Chopra said. "California is committed to ensuring that all Los Angeles fire survivors receive fair and timely insurance payouts, and we will hold firms accountable for failures that impede survivors' access to the money they are owed."

Department of Financial Protection and Innovation Commissioner KC Mohseni said the agency would take action against institutions that delayed payments. "Survivors of such devastating tragedy should not be forced to wait while financial institutions drag their feet and fail to release post-loss insurance funds owed to homeowners," Mohseni said. "We will not hesitate to take strong action against an institution that has needlessly delayed payments or broken our laws, and this data is an additional useful tool. It is critical that as homeowners and families continue to rebuild and recover, lenders do not stand in their way."