SACRAMENTO, Calif. (AP) — California officials on Thursday ordered mortgage lenders, including banks and credit unions, to report how they have handled insurance payouts to survivors of the 2025 Los Angeles-area fires.

The California Business and Consumer Services Agency and the Department of Financial Protection and Innovation want to speed the release of insurance proceeds lenders hold before distributing them to homeowners.

DFPI has received more than 160 complaints about payment delays or other issues since January 2025. Lenders have two weeks to submit their reports.

“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,” said Rohit Chopra, secretary of the Business and Consumer Services Agency.

The Palisades and Eaton fires destroyed more than 16,000 homes and other structures as they tore through residential neighborhoods in and around Los Angeles. Very few of those homes have been rebuilt.

The California Mortgage Bankers Association said it would alert members to the state’s reporting requirements and encourage them to evaluate whether they can process payments more efficiently.

“We will continue working with our members, the Governor’s Office, and regulators to help survivors receive their insurance proceeds without unnecessary delay,” CEO Paul Gigliotti said in a statement.

In July, Gov. Gavin Newsom wrote to bankers’ associations and credit unions, saying homeowners rebuilding after fires reported that lenders sometimes held on to payouts for weeks before releasing them. He ordered the state to collect data on lenders that take longer than 10 days to distribute insurance proceeds and fail to develop a plan to speed payments.

Last year, he signed a law requiring banks and credit unions to pay homeowners interest on insurance payments they hold.

Newsom called Thursday's action a crucial step in support of families and business owners as they rebuild.

"The last thing survivors need is unnecessary red tape, delays, and barriers standing between them and the relief they deserve,” he said in a statement.

Questions about who should pay for the financial costs of California’s wildfires have persisted throughout Newsom’s nearly eight years as governor. He took office in 2019, months after the deadliest and most destructive fire in state history, which state fire officials found was sparked by Pacific Gas & Electric power lines. In his final legislative session as governor, he pushed a plan that would have required home insurers to bear more of the cost. But the deal fell apart when lawmakers couldn’t agree on a solution.

Joy Chen, executive director of Every Fire Survivor’s Network, a nonprofit led by survivors of the 2025 Los Angeles-area fires, said lenders must release money promptly to homeowners during rebuilding.

“Every day that they wait to pay us, they're collecting interest," she said. “And that interest really belongs to us.”

Lenders release insurance payouts in batches at various stages of rebuilding. However, lender disagreements with contractors over how much work is complete have delayed payments, Chen said.

Those delays have serious consequences for fire victims, said Annie Barbour, a recovery coordinator with United Policyholders, a nonprofit that advocates for insurance consumers.

“The longer they're out of their home, the longer they have emotional turmoil,” Barbour said.