The seven-member California Senate Banking Committee rejected SB 729 yesterday, a simple bill designed to reduce wrongful foreclosures and hold banks and servicers accountable for wrongdoing.
Only Sen. Alex Padilla (D-Pacoima) did not vote, effectively killing SB 729 in its first policy committee. Instead, the senator announced late yesterday afternoon that he would introduce an alternative measure in place of SB 729. Last year, however, Padilla voted on three separate occasions for SB 1275, a bill identical to the version of SB 729 defeated yesterday. That bill passed the Senate floor, but died in the Assembly.
“Sen. Padilla’s opposition aligned him with the interests of the banks and against the interests of California homeowners—and against the notions of fairness and accountability too,” said Paul Leonard, California director of the Center for Responsible Lending. “There’s no need for a new bill and a new process—we had a bill last year, and we had a bill this year, that would have ended ‘dual-track’ and reduced unnecessary foreclosures.”
Padilla’s bill has not yet been introduced, but CRL and other consumer advocates look forward to reviewing the details to see how it measures up.
“We should be concerned that this new bill could be a nod to big banks and a knock against Californians,” said Paul Leonard. “If industry players write the rules, transparency, accountability and fairness won’t be central—they’ll likely be absent.”
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