[courtesy of California Progress Report]

By Frank D. Russo

There’s something amiss in the state of Sacramento—and it has something to do with the state’s banking and lending institutions and the stacking of committees that deal with them with legislators that are either weak kneed or just a bit overfriendly with the industry that they should be protecting us from.

What else is new?

Well, this afternoon, the Senate Committee on Banking, Finance, and Insurance, Chaired by Senator Michael Machado of Stockton, will be hearing two bills that have been gutted down behind a closed door process such that today’s public proceedings on them may amount to little more than a sham.

Much of this committee’s work deals with an issue in the headlines of newspapers and critically affecting California’s economy, including ripple effects on the state budget, and putting a lot of Californians in a lot of pain. One would think that Machado, given how his district is one that has been hammered by mortgage foreclosures and is referenced in dozens of news articles on the subprime mortgage mess, would be a bit more willing to curb some of the abuses of the industry.

[courtesy of California Progress Report]

By J. Mijin Cha
Policy Specialist
Progressive States Network

Not surprisingly, the Bush Administration's proposal for fixing the subprime lending crisis is an industry-led deal that involves completely voluntary actions to fix the current crisis and will ultimately help only a few of the millions of people who have either lost or are in danger of losing their homes. With absolute failure at the federal level, it is again up to states to step in. In two recent editorial pieces, the executive directors of the Progressive States Network and the Drum Major Institute called on New York Governor Spitzer to impose a six-month moratorium on foreclosures to stop the rapidly increasing rate of home loss, a policy all governors should enact. A moratorium would give lenders incentive to restructure loans on fair terms and fight back against the Wall-street backed predatory lenders.