FOR IMMEDIATE RELEASE                                            Contact: Sheri Pemberton
Date: September 25, 2008                                                       Phone: 916-319-2053

Statement by Assemblymember Lieu on Mortgage Reform Veto

 

Wall Street won and Main Street lost today when Governor vetoed AB 1830

 

Wall Street won and Main Street lost today when Governor Schwarzenegger vetoed AB 1830, a comprehensive, bi-partisan subprime mortgage reform bill that would have fixed a dysfunctional mortgage system.  The Governor's veto message repeats the same tired arguments that were made the last eight years by industry, the same arguments that led us to the worst mortgage and foreclosure crisis in American history. 

 

The Governor's message that we should just do what the federal government does in terms of regulation is particularly galling and ignorant.  Over 60% of the subprime loans made in California during the mortgage frenzy were sold or originated by entities regulated by the state.  It was the unregulated selling of these loans that caused the massive foreclosure crisis in California and across America. 

 

The Governor's belief that we should do nothing now and let the miniscule things he has put forward "work" is outrageous.  The Governor's much vaulted foreclosure prevention programs and the signing of bills last year that simply conformed to federal law has resulted in the following:  1,300 foreclosure filings a day in California, where we now the lead nation for the 19th consecutive month.  We don't have the luxury of doing nothing, because the continued unregulated selling of risky subprime loans continues to this day.

 

Perhaps most disappointing is that this veto violates the core values the Governor apparently believed in, such as fixing broken and dysfunctional systems, governing in a post-partisan manner by moving away from extreme ideological positions, and working for the people of California and not just a few special interest groups.  AB 1830 was a balanced, compromise that fixed a dysfunctional mortgage system, was non-ideological, and would have helped all of the people of California, not just the minority of industry interest groups that opposed this bill.  The Governor today retreated into an ideological corner with a veto that does nothing other than cater to a few special interest groups in industry.

 

I will introduce this bill again because I believe the public will demand it.  Maybe the Governor doesn't care that the mortgage system he refused to fix today has cost taxpayer's $700 billion, but I know the public cares.

 

Assemblymember Ted Lieu is the Chair of the Assembly Rules Committee. He represents the 53^rd Assembly District, which includes El Segundo, Hermosa Beach, Manhattan Beach, Redondo Beach, Torrance, Lomita, Marina Del Rey, and portions of the City of Los Angeles.

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