California will now require people who charge fees for helping veterans with federal benefits claims to hold federal accreditation, under a bill that Gov. Gavin Newsom signed on Feb. 10.

The new law, Senate Bill 694, which had bipartisan support, also adds state consumer protections aimed at limiting fees and restricting practices that state officials say have been used to exploit veterans navigating the Department of Veterans Affairs (VA) benefits system.

These abusers are commonly referred to as “claim sharks,” which the Veteran’s Legal Center defines as “an individual or business that purports to help veterans with the VA disability claims process.”

Such people “frequently charge high fees for their services, even though they do not hold accreditation from the VA,” and “deprive veterans of their money through high upfront fees, misleading advertising, and false promises of guaranteed benefits.”

Under SB 694, a person may not “prepare, present, or prosecute” a veteran’s benefits claim unless they have federal accreditation. The law also prohibits fees that federal law does not allow and expands the California Consumer Legal Remedies Act to cover veterans’ benefits claims.

Newsom noted that a separate tax change affecting some military retirees and surviving spouses is now in effect. It allows eligible taxpayers to exclude up to $20,000 of income each year from California state income taxes.

The governor’s news release said the exclusion applies to veterans receiving military retirement pay and to families receiving payments from the federal Survivor Benefit Plan.

The new law includes restrictions meant to protect veterans’ privacy and access to government systems. It bars sharing login credentials and prohibits accessing secure government systems using another person’s credentials. It also prohibits requiring veterans to provide PINs tied to Common Access Cards.

Newsom framed the bill as a consumer protection step. “By signing this bill into law, we are ensuring veterans and service members get to keep more money in their pockets, and not line the coffers of predatory actors,” he said in a statement.

The Consumer Financial Protection Bureau has warned that only VA-accredited representatives are permitted to assist with VA benefits claims, and that VA-accredited representatives are not permitted to charge a fee for assistance on a veteran’s initial benefits claim.

“With SB 694, California emboldens its promise to stand up for veterans, ensuring they aren’t exploited for profit by predatory companies,” said state Sen. Bob Archuleta, who authored the bill.

California Attorney General Rob Bonta said the law is meant to curb what he described as financial harm from “claim sharks.” “If you want to charge veterans for help with their benefits claims, you must be accredited by the VA,” Bonta said in a statement.

According to a 2025 Government Accountability Office report, the VA has limited enforcement tools when complaints involve unaccredited people helping with benefits claims. The GAO said federal law does not provide monetary penalties against unaccredited individuals who improperly assist claimants, and VA officials told the GAO they can generally only do informal investigations, send cease-and-desist letters, or refer cases to other agencies.

The Newsom administration also used the signing to point veterans toward free, accredited help already available through county veteran service officers. California has one of the largest veteran populations in the country, with about 160,000 active-duty service members and nearly 1.5 million veterans living in the state, according to the governor’s office.

The release said county veteran service officers filed 316,000 claims in 2024–2025 and secured an estimated $687 million in new or increased federal benefits for California veterans and their dependents. The same offices served nearly 1 million veterans and family members that year in person, by phone, and by email, according to the release.