Earlier this week, the governor called on federal lawmakers to fix the financial mess threatening the nation’s economy. Today he vetoed five bills that would have further regulated the mortgage industry or provided greater protection to loan-seekers.
Among the governor's higher-profile veto targets: Assembly Bill 1830 by Assemblyman Ted Lieu, D-Torrance, which would have banned certain negative amortization loans and provided more information about subprime loan costs to potential borrowers. In a veto message (pdf), Arnold Schwarzenegger took a swipe at trial lawyers, saying he didn’t like bill provisions that would have created a private right of action and allowed plaintiffs to recover attorney fees in some bad-loan cases.
"This provision will likely lead to increased litigation based on de minimis violations as plaintiffs attorneys will have much to gain and little to lose," he wrote.
The AB 1830 veto was a big win for mortgage and realtor trade group opponents, which spent tens of thousands of dollars between March and June — the last months that public records are currently available — on lobbying to defeat the bill. Lawyer-lobbyists working to defeat the bill included members of California Advocates, Arnold & Associates and in-house attorney-advocates at the California Association of Realtors.
— Cheryl Miller