The issue is not the 20 characters, but the underlying reason for it. There's no technical reason they would need it unless they were storing it insecurely.
Granted it's possible they're limiting it to 20 for a nontechnical reason, but I have some 40-character passwords in a password manager. Long passwords are not only reasonable, but this is a giant alarm bell if they even imply they might be storing them insecurely.