Big Banks Own California, Too: How Bank Lobbyists In Sacramento Killed Foreclosure Mitigation

oppositefear

By Lee Fang on Oct 6, 2011 at 6:05 pm

State Senator Juan Vargas (D) killed the foreclosure mitigation bill; later went to dinner with Bank of America lobbyists

As the 99 Percent Movement takes shape across the country, citizens are demanding that Congress represent the public interest instead of the whims of bankers and big corporations. For instance, after demanding and receiving massive bailouts, Wall Street banks successfully lobbied Congress to crush any serious effort to mitigate the foreclosure crisis. The spectacular bank lobbying coup in Washington prompted Sen. Dick Durbin (D-IL) to remark that the banks “frankly, own the place.”

And this dynamic is not only at play in Washington: Banks have a disproportionate amount of power in California as well.

As one of the epicenters of the foreclosure crisis, Californians by the tens of thousands have lost their homes. In most cases, banks have repossessed houses without bothering to re-negotiate interest payments to find foreclosure alternatives. And in a growing number of cases, “robo-signers” have allegedly forged documents and illegally foreclosed on borrowers. Since the foreclosure crisis is leading towards a spiraling decrease in home property values across the state, nearly everyone is affected.

A common sense idea to add transparency and accountability to the mortgage market died a quick death earlier this year. State Sen. Mark Leno (D-San Francisco) and State Sen. Darrell Steinberg (D-Sacramento) proposed SB729, a measure “to require banks to give people a definitive answer on loan modification, identify who owns the loan, and give borrowers legal recourse if banks don’t take these steps.”

The idea, embraced by consumer advocates and many foreclosure experts, did not even make it out of committee. State Sen. Juan Vargas (D-San Diego), the chairman of the banking committee, joined two Republican state senators in snuffing the bill. State Sen. Alex Padilla (D-Los Angeles) abstained from the vote, ensuring a 3-3 split (a tied vote does not allow the bill to proceed). Despite moving testimony from victims of foreclosure fraud and persuasive academic opinion, the bill died. To understand why, simply follow the money:

– Bank of America, a leading mortgage-lender in California, spent $173,703 lobbying this year in Sacramento. Disclosure reports show Bank of America hired lobbying firms like Nielsen Merksamer and Government Relations Counsel to kill SB729. Reports also show that Bank of America treated Vargas to dinner at the Ella Dining Room and Bar about a month after he voted to kill the foreclosure mitigation bill. Bank of America has contributed $5,500 in campaign contributions to Vargas and nearly $2,000 to Padilla.

– The California Mortgage Bankers Association, a lobbying group representing a number of mortgage lenders in the state, spent $55,711 lobbying in Sacramento this year. The bankers hired KP Public Affairs, a firm that doubles as the general counsel for the association, to help kill SB729. The group donated $4,000 to Vargas and $1,000 to Padilla recently.

– Wells Fargo spent $84,027 lobbying in Sacramento, and hired a firmed called Knudsen & Associates to help kill SB729. Wells Fargo has contributed $2,800 to Padilla and $2,000 to Vargas. Disclosure reports show agents for Wells Fargo took a state senator out to lunch shortly after the SB729 vote, but the disclosure forms appear to be incomplete because the name of the senator is not filled in.

JP Morgan Chase, the California Chamber of Commerce, Fidelity National Financial, the Securities Industry And Financial Markets Association (a trade association representing investment banks like Goldman Sachs and Barclays Capital), and other bank-related organizations spent tens of thousands to lobby against SB729.

In an article last month in the San Diego Union Tribune, Vargas pled ignorance while explaining his role in killing the mitigation and transparency measure:

“If a homeowner is doing everything the bank asked him or her to do and the bank forecloses, I think that’s very inappropriate and should be a violation of the law. But I don’t remember hearing any testimony about that kind of thing while we were discussing this bill.”

According to sources contacted by ThinkProgress, Vargas was in the hearing room with witnesses who testified about a host of unfair and rushed bank foreclosures. Perhaps the dinner Bank of America bought Vargas after the vote had some memory-wiping ingredients.
link: http://thinkprogress.org/economy/2011/10/06/337012/big-banks-own-california-too-how-bank-lobbyists-in-sacramento-killed-foreclosure-mitigation/

Freiheit_der_Rede

and that's why we 'Occupy our Homes' and to assist others in preventing eviction from their homes. There is strength is numbers and we need to grow stronger in this area .... BofA has already issued an internal memo advising its Field Members to basically turn away and not engage with protesters who are actively Occupying pre-foreclosures as the families facing eviction tell their stories to the crowd/neighborhood. These events garner media attention and BofA is afraid of experiencing even more negative attention.

bnhunter

HELLO....new person to the site here...While I understand the magnitude of the issues raised by the occupy movement, I can honestly say in earnest that I don't thin k most of the population does. It is my belief that if they knew what the movement was pressing for in simple concise terms..the majority of this countries Americans would be on board....it seems to me that the occupy movement is all over the map and that being in a scattered position of protest hinders the highly significant message that could be delivered. I am not being critical--just real. Maybe the occupy leadership could hold an online election to discern 3-4 specific platforms from which the movement could mobilize and bombard the media with these 3 or 4 issues of protests. As a side note--the AARP organization has really taken a wise stance with their medicare benefits by recently running ads indicating the strength in their voting numbers by directing it right at the politicians running for office. Their ads say--we are 5 million strong voting Americans and we will be watching you (politicians) over the next few months and you will hear from us on election day. If you want to keep your job--you best be considering our desires because we are the people you represent--and we are watching. Occupy should take this same bold in your face voting agenda. We need short concise issues that the movement could use as platform issues for resolution. Ex: 1) immediate criminal investigation and congressional inquiry into the reasons for us dollar bail outs 2) new legislation to prohibit insider trading by elected officials in Congress 3) immediate government pressure to force banks that received us tax payer bail out money to renegotiate upside down loans for Americans forcing foreclosure for the purpose of keeping their homes. 4) 3% of the foreign aid budget redirected immediately to fund US infrastructure projects that create jobs for Americans. These are just examples! Next, it might be wise to bombard the media with the selected issues so that public opinion and politicians can take sides and be accountable and empowered. Lastly, the movement can be identified by 99% as well as sheer voting power in numbers that flash in the face of politicians and that have the capacity to bring criminals to justice via congressional inquiry and hearings regarding wall street deception and good ole boy antics. The occupy movement has this capacity! It is ripe for demanding change if simple organizational functions could ensue. Just a thought and commentary?

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