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The following is the complete list of all legislation that the California Association of Mortgage Brokers (CAMB) monitored during 2007. Included in this report are the bills, a brief description of the measures intent, the final outcome and CAMB’s position on the bill. In those cases where the measure made its way to Governor Schwarzenegger and were signed, CAMB has included the Chapter Number. In those cases where Governor Schwarzenegger vetoed the measure, the Governor’s veto message has been included.
AB 150: Lieu
iteracy Initiative for the purpose of improving financial literacy by offering materials for teachers and schools to provide high-quality financial literacy education for pupils in kindergarten and grades 1 to 12, inclusive. The initiative would be administered by the California Financial Literacy Council that would be required to oversee the initiative and, provide a clearinghouse of financial literacy resources and materials to be made available for schools and teachers.
Status: Vetoed by Governor
CAMB Position: Support
Veto Message: To the Members of the California State Assembly:
I am returning Assembly Bill 150 without my signature.
Teaching students the principles of money management is a worthy goal. However, this bill would merely authorize the Superintendent of Public Instruction (SPI) to convene an advisory committee and make financial literacy resources and materials that are grade-level appropriate available online. Superintendent O’Connell already has the authority to do these things, if he so chooses. In addition, many financial institutions and services providers already provide an abundance of information on financial literacy that is readily available on the Internet.
For these reasons, I am unable to sign this bill.
Sincerely,
Arnold Schwarzenegger
AB 393: Coto
This bill conforms the Personal Income Tax Law to federal law by allowing homeowners to deduct the amount paid for mortgage insurance premiums. Specifically, this legislation provides that Internal Revenue Code Sections 163(h)(3) and 163(h)(4), which permit a federal deduction for qualified mortgage insurance premiums, shall apply to premiums paid or accrued on or after January 1, 2007, and before January 1, 2008. The purpose of this bill is to make homeownership more affordable in California and to help the housing market.
Status: Died in Committee
CAMB Position: Support
AB 512: Lieber
This bill would require a person in a trade or business who negotiates specified contracts or agreements primarily in any language other than English to deliver to the other party prior to execution of the contract or agreement, a translation of the contract or agreement in the applicable foreign language and that these provisions apply to the California Residential Mortgage Lending Act. Supervised financial organizations that make loans secured by real property would be required to provide a summary translation of specified contract terms, in a form created by the Secretary of Business, Transportation and Housing, in each language described. The bill would provide that its provisions are severable.
Status: Died in Committee
CAMB Position: Oppose Unless Amended
AB 628: Price
This bill would prohibit that real estate broker or a residential mortgage lender or servicer from making a gift, to a borrower or a potential borrower. A "gift" includes, but is not limited to, money, a rebate, a trip, a gift card, or a gift certificate.
Status: Died in Committee
CAMB Position:Oppose
AB 703: Ruskin
In conjunction with existing law, this bill would prohibit a person or entity from using a social security number as an identifier, except as required by federal or state law. The bill would also require that records containing social security numbers be discarded or destroyed in a specified manner, and would require the encryption or locked storage of records containing social security numbers.
Status: Died in Committee
CAMB Position: Watch
AB 779: Jones
This bill would alter California’s breach notification law by: (1) entitling the owner or licensee of personal information to recover notification costs from the person or business that actually maintained and compromised the data; (2) clarifying that retail sellers are subject to the notification law and limits that time that they can retain personal information; (3) requiring notices to be more consumer-friendly. This bill would prohibit a retail seller from retaining the personal information of consumers for more than 90 days after a transaction. Additionally, per existing state and federal laws, licensed brokers are required to maintain records for 3 years.
Status: Vetoed by Governor
CAMB Position: Oppose unless amended
Veto Message: To the Members of the California State Assembly:
I am returning Assembly Bill 779 without my signature.
Protecting the personal information of every Californian is very important to me and I am committed to strong laws that safeguard every individual’s privacy and prevent identity theft. Clearly, the need to protect personal information is increasingly critical as routine commercial transactions are more and more exclusively accomplished through electronic means.
However, this bill attempts to legislate in an area where the marketplace has already assigned responsibilities and liabilities that provide for the protection of consumers. In addition, the Payment Card Industry has already established minimum data security standards when storing, processing, or transmitting credit or debit cardholder information. This industry has the contractual ability to mandate the use of these standards, and is in a superior position to ensure that these standards keep up with changes in technology and the marketplace. This measure creates the potential for California law to be in conflict with private sector data security standards.
While I support many of the provisions of this bill, it fails to provide clear definition of which business or agency “owns” or “licenses” data, and when that business or agency relinquishes legal responsibility as the owner or licensee. This issue and the data security requirements found in this bill will drive up the costs of compliance, particularly for small businesses.
I encourage the author and the industry to work together on a more balanced legislative approach that addresses the concerns outlined above.
Sincerely,
Arnold Schwarzenegger
AB 840: Emmerson
The Real Estate Law provides for the licensure and regulation of real estate licensees and mineral, oil, and gas brokers by the Real Estate Commissioner. This bill would authorize the commissioner to suspend, revoke, or deny the issuance of a license to a person who is convicted of a felony , a crime involving moral turpitude, or a crime substantially related to the qualifications, functions, or duties of a real estate licensee.
Status: Signed by Governor, Chaptered by the Secretary of State, Chapter 140
CAMB Position: Support
AB 1356: Houston
This bill would require the representative of an equity purchaser to provide to the parties to a contract written proof of licensure, as specified. The bill would also require the representative to provide a statement under penalty of perjury and written proof that he or she has satisfied certain minimal professional liability coverage or bonding requirements or that he or she has an unrestricted real estate license in good standing and that his or her license is not restricted pursuant to the Real Estate Recovery Program.
Status: Died in Committee
CAMB Position: Watch
AB 1538: Lieu
This bill would allow the California Housing Finance Agency to accept donations into the California Housing Trust Fund from public or private sources for the purpose of assisting homeowners to refinance home loans with variable interest rates, under specified circumstances, into stable, fixed rate loan products.
Status: Died in Committee
CAMB Position: Support
AB 1574: Houston
This bill would require a seller of property upon which a residential unit is constructed that is first transferred to a buyer on or after January 1, 2008, and which is subject to a covenant, condition, or restriction imposed by the original seller requiring payment of a fee at the time of conveyance, to make a specified disclosure and to record this disclosure in the chain of title. The bill would require that the disclosure include the amount of the fee required or a description of how the fee is calculated, the entity or entities to which funds from the fee will be paid, and the general purpose for which funds will be used.
Status: Died in Committee
CAMB Position: Support
AB 1677: Calderon, Charles.
This bill would require a business that provides banking or other financial services over the Internet to implement and maintain reasonable policies and procedures for authenticating and verifying the legitimacy of a consumer transaction over the Internet, and would require that these policies and procedures be consistent with current best industry practices. It would allow penalties to be imposed on businesses that fail to meet this requirement, as specified.
Status: Failed (Inactive File)
CAMB Position: Watch
SB 223: Machado
The Real Estate Appraisers' Licensing and Certification Law, which is part of the Real Estate Law, provides for the licensing and certification of real estate appraisers. That law prohibits a licensed appraiser from engaging in any appraisal activity in connection with the purchase, sale, or transfer of real property if his or her compensation is affected by the sales commission generated by the transaction for which the appraisal was made. Existing law makes a knowing and willful violation of the Real Estate Law a misdemeanor. This bill would prohibit a licensed appraiser from engaging in any appraisal activity in connection with the purchase, sale, transfer, financing, or development of real property if his or her compensation is dependent on or affected by the value conclusion generated by the appraisal. By broadening the definition of a crime, this bill would impose a state-mandated local program.
Status: Signed by Governor, Chaptered by the Secretary of State, Chapter 291
CAMB Position: Support
SB 226: Negrette-McLeod
This bill clarifies Business and Professions Code Sec. 10150.6 to ensure that the exemption to the usual two years experience requirement for real estate brokers who have a college degree with a "specialization in real estate" is not applied so broadly as to exempt every applicant with a four year degree from the requirement. The experience requirement for an applicant for a real estate broker's license is a critical consumer protection, because it is the broker who employs sales agents and supervises their conduct. The combination of a relatively easy entry sales license, coupled with a supervising broker who has both much more education and substantial experience, allows the real estate industry to be both flexible and responsive to market demand.
Status: Vetoed by Governor
CAMB Position: Support
Veto Message: To the Members of the California State Senate:
I am returning Senate Bill 226 without my signature.
This bill is substantially similar to a bill that I vetoed last year. Instead of directly repealing one method in which a person can become a real estate broker as last year’s bill did, this bill attempts to revise the method via a regulatory route. There is no more evidence this year than last that this licensing method has harmed consumers in the over thirty years it has been in statute.
While I cannot sign the bill, I do support one aspect of the bill. I urge the Legislature to consider legislation next year that authorizes the Department of Real Estate Commissioner to require real estate brokers and salespersons to display his or her license number on consumer first contact materials.
Sincerely,
Arnold Schwarzenegger
SB 328: Corbett
The bill would prohibit any person, as defined, from, among other things, obtaining or attempting to obtain, or causing or attempting to cause the disclosure of, personal information about a customer or employee contained in the records of a business through specified methods, such as by making false, fictitious, or fraudulent statements or representations, with specified exceptions. The bill would provide civil remedies for the violation thereof, and would make related and conforming changes in that regard.
Status: Died in committee
CAMB Position: Watch
SB 385: Machado
This legislation aims to extend federal guidance on nontraditional mortgage product risks to state-regulated mortgage lenders and brokers, and in doing so to ensure that all mortgage lenders and brokers, regardless of their regulator, are subject to the guidance. Components of the guidance include but are not limited to:
- nontraditional products should have good risk management practices in place and capital levels commensurate with the risk;
- Institutions that offer nontraditional mortgage products should make the potential consumer of these products aware of all possible risks and should provide this information to potential borrowers in a clear, balanced, and timely manner. Payment shock, negative amortization,
- prepayment penalties and the cost of reduced documentation loans should be explained. Monthly statements on payment-option adjustable rate mortgages should explain the consequences of each payment option.
Status: Signed by Governor, Chaptered by the Secretary of State, Chapter 301
CAMB Position: Neutral
SB 622 (Padilla) Independent Contractors
This bill would prohibit willful misclassification, as defined, of employees as independent contractors. The bill would authorize the Labor and Workforce Development Agency to assess specified civil penalties from persons or employers violating the bill.
Status: Vetoed by Governor
CAMB Position: Oppose
Veto Message: To the Members of the California State Senate:
I am returning Senate Bill 622 without my signature.
Although this bill is intended to promote the worthy goal of ensuring employees are not intentionally misclassified as independent contractors, thus deterring employers from conduct which may give them unfair economic advantages against their competitors, this bill also creates new mechanisms and incentives for litigation where sufficient remedies already exist. In creating new and redundant exposure to litigation and sanctions, this bill may cause businesses to avoid use of the independent contractor model even where it may be appropriately utilized. This will ultimately contribute to a negative perception of California as an inhospitable business climate.
For these reasons, I am returning the bill without my signature.
Sincerely,
Arnold Schwarzenegger
SB 670 (Correa) Private Transfer Tax Prohibition
This bill would prohibit the imposition of private transfer taxes and/or fees. “Private” transfer “taxes” (PTT’s) are increasingly being used to settle disputes between builders and “no growth” advocates or, in the alternative, by builders to proactively avoid a lawsuit or to smooth development negotiations with the local government. Typically, in return for an agreement by an opponent of the development to not pursue a lawsuit, the builder agrees to the imposition of one or more PTTs through a covenant included in the covenants, conditions and restrictions. These PTTs have totaled as much as 1.75 percent of the purchase price of a home and must be paid for 20 to 25 years or, even, in perpetuity. These taxes must be paid by the first buyer and every subsequent buyer each time the home is sold.
Status: Died in committee
CAMB Position: Neutral
SB 954: Ridley-Thomas
This measure would memorialize the President and Congress of the United States to recognize the potential dangers to a consumer’s privacy and personal identity protection presented by the sale and or transfer of personally identifiable information by Consumer Reporting Agencies to third parties for the purpose of making unsolicited “firm offers of credit or insurance” related to a mortgage product, and to take action to amend the Fair Credit Reporting Act to require Credit Reporting Agencies obtain a consumer’s express consent to receive firm offers of credit or insurance related to mortgage products prior to such sale or transfer.
Status: Died in committee
CAMB Position: Sponsor/Support
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