New legislation may make changes to CalBRE

Recently, Assembly Bill 1545: the State of California Housing Agency Act (AB 1545) was introduced in the California legislature by 44^th District Assemblymember Jacqui Irwin (Democrat). The bill proposes to create a Housing Agency – separate from Business and Consumer Services – to oversee the California Bureau of Real Estate (CalBRE) and other housing-related departments, such as the Department of Housing and Community Development (DHCD) and the Contractors’ State License Board.

AB 1545 also creates the Department of Real Estate Finance within the Housing Agency, which will assume the administration of:

• the Real Estate Appraiser’s Licensing and Certification Law;
• the Escrow Law;
• portions of the California Finance Lenders law relating to mortgage originations, home purchases and refinancing;
• the California Residential Mortgage Lending Act;
• laws regarding title and mortgage insurance; and
• laws controlling the activities of home warranty companies.

Transferring authority to the new department effectively consolidates responsibility for all real estate financing matters in a single department.

Additionally, the bill proposes to redesignate CalBRE as the “Department of Real Estate,” reverting to its original title prior to the renaming in 2013 – a disruption that will no doubt burden real estate licensees who will need to adapt to yet another trivial name change.

A waiting game for details

AB 1545 was only recently introduced on August 20, 2015 and has yet to be heard in committee. Minimal information about the purpose and origins of the bill is available at this time. Sources are basically non-responsive.

first tuesday has probed some key sources about AB 1545 to determine how its contents may impact our readers. Assemblymember Irwin was not available by phone and has not yet responded to questions about the bill’s creation. The DCA, speaking on behalf of CalBRE, has not taken a position on AB 1545 and was unable to provide further information about its provisions or effect on CalBRE.

What do we know about AB 1545? The bill is being sponsored by the California Association of Realtors (CAR). Further and perhaps unsurprisingly, Assemblymember Irwin who introduced the bill has received ample funding from CAR in the past. According to Voter’s Edge, CAR was one of the top five contributers for Irwin during elections in 2014.

It is well known that CAR’s arm reaches beyond its trade union members and into the California legislature, a result of extensive lobbying and funding provided by increases to membership dues. AB 1545 may well be a case of CAR’s power and legislative connections at work to further their own as-yet-unknown agenda.

But is this bill necessary or useful? On one hand, streamlining the administration of financing and mortgage origination laws may provide more focused and effective oversight. On the other hand, the creation of additional departments further complicates the state’s government and contributes to the confusing compartmentalization of California’s administration.

The renaming of CalBRE back to its original title of “DRE” is also more wasteful and confusing than it is beneficial to the state or real estate licensees – as was the change from “DRE” to “CalBRE” two years ago. Reversing the change now does nothing to avoid complications for brokers and agents. If passed, expect to revisit the burdensome process of adapting to a new title and conforming related documents and marketing as needed.

Is this bill proposing positive changes for the CalBRE and California? Let us know what you think or know about CAR’s intentions in the comments!