Rodney K. Brown, president and CEO of the California Bankers Association, is responding to the June 12 editorial "Lawmakers need to stand up for homeowners." The editorial stated: "Given the limited enforcement resources of the state, the option of choice has been to allow individuals to bring cases to court – a so-called 'private right of action.' The aim is not to spur lawsuits, but to provide a real incentive for lenders and servicers to comply with the law."

During the past several months, the California Bankers Association has engaged on the legislative measures included in California Attorney General Kamala Harris' California Homeowner Bill of Rights. We are pleased to support measures that separately extend rights to tenants when their landlords are in foreclosure and help fight blight in our communities. Additionally, we join the attorney general in supporting the prohibition of third-party advance fees, rampant in loan modification scams.

The legislative measures that deal with these issues are currently moving through normal legislative channels. However, measures dealing with some of the more contentious issues, highlighted in the supportive Bee editorial, were placed into conference committee. While the California Bankers Association has expressed opposition to the two measures in the conference committee, Senate Bill 900 and Assembly Bill 278, we have participated in good faith conversations with the measures' proponents.

Our goal has been to craft a distilled version of the national mortgage settlement applicable to all mortgage servicers, bank and nonbank, currently not signatories to the settlement. We agree that borrowers who request a loan modification should get an answer regarding their eligibility before they are foreclosed upon. We also agree that borrowers who may be eligible for a loan modification should have a consistent point-of-contact to keep them better informed of their status.

The editorial correctly identifies the importance of an enforcement provision, and the bankers association has publicly stated our support for such a provision. However, details do matter. It is incredibly important that the conference committee produces a solution with clear rules in order for the financial services industry to comply. And while we may disagree over the specifics of enforcement, we must be sure to focus it on those circumstances where a material violation precluded the borrower from pursuing a loan modification that they would have likely received.

Our industry cannot support legislation that promotes meritless litigation, particularly in an environment where our court system is already overburdened, that will ultimately have no impact on the underlying financial condition of the borrower who cannot afford to stay in their home.

California's banking industry will continue to advocate for reasonable solutions that provide meaningful consumer protections to help borrowers avoid foreclosure when possible, yet also permit the foreclosure process to proceed for the benefit of the overall economy, other taxpaying homeowners and the communities they live in.

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