Still stalking the predators
Since then, the legislative wheels have been grinding reluctantly, jammed with the fistfuls of cash the banking industry can bring to bear to ensure this issue never poses a threat to business as usual.
One piece of legislation that has managed to squirm through is Senate Bill 608, designed by its author, Senator Joe Dunn, to curb an escalating problem with predatory lending practices, such as deliberately targeting poor credit risks and loaning them money with padded fees and high interest rates.
As it is written now, SB 608 bans about eight practices by banks and mortgage companies. Past bills have attempted to address similar issues—the Homeowner Equity Protection Act and the Truth in Lending Act—but have been largely ineffective, critics say, due to the aggressive lobbying by the banking industry.
Brian Kettenring of Association of Community Organizations for Reform Now (ACORN) admits being surprised the first time he was confronted with the staggering influence of the banking industry.
“The number of lobbyists that the banks can line up there on the Hill and the amount of money they can put behind them is shocking,” he said.
Legislators face the same challenges overcoming industry influence this go-around.
“There’s no question in the past that proposals that started out with teeth in them have ended up to be either killed outright or neutralized so that impact on the industry was basically non-existent,” says Dunn. “The banking industry has already gone into high gear to try to make sure our bill does not make it to Governor Davis’ desk.”
Sacramento City Councilwoman Lauren Hammond’s efforts to pass a like-minded city ordinance have been similarly frustrated. The ordinance is tentatively expected to come before the City Council in June, but things have been progressing too sluggishly for Hammond.
“I think that the banking industry is doing whatever they can to slow it down here at the city, which is why it’s stuck in the city treasurer’s office,” she said. “I am tired of any more holdups on my ordinance.”
Kettenring remains confident, however, that this is an issue whose time has come.
“People are getting fed up, and frankly, we are too,” he said. “So here’s what’s going to happen. If it doesn’t pass here, you’re going to see ballot initiatives rising up in cities in the United States. You’ll see city council taking up the issue. The problem is not going away.