The Assembly has narrowly rejected a California Chamber of Commerce-opposed job killer bill that would have limited financial opportunities for Californians, further harming the housing market and creating job loss.
AB 2501 (Limón; D-Santa Barbara) would have jeopardized credit availability for consumer loans in future years by imposing onerous obligations on financial lenders to carry home, mobile home, and auto loans for extended periods of time without receiving payments from borrowers.
A CalChamber-led coalition worked hard to secure the bipartisan opposition that led to the bill’s defeat in a June 15 vote.
The bill would have required financial institutions to carry homeowner loans for a year or more without payment and without assessing fines or penalties, prohibited repossession of mobile homes or motor vehicles for nonpayment and without assessing fines and penalties, and placed onerous restrictions on deferred deposit loans.
It is important to note that consumers are not the only casualties of the global pandemic—with very few exceptions, most industries, and businesses large and small and their employees, also have been affected. Nevertheless, AB 2501 would have shifted a significant portion of the costs of this pandemic to the private sector.
The Cal Chamber has repeatedly pointed out that the private sector cannot be the safety net for this crisis. That is the role of government. While it will contribute to the recovery, the private sector cannot absorb the burdens proposed in AB 2501 without causing further harm, including loss of jobs.
AB 2501 required financial institutions to carry the burden of unpaid mortgages for more than two years by imposing a forbearance of payment covered period of 12 months, followed by a broad foreclosure moratorium for anyone for all of 2021.
Moreover, AB 2501 is largely unnecessary. California and the federal government already heavily regulate lenders in the sectors covered by the bill, and each must meet scrutiny regarding their lending practices and asset management.
At a time when consumers need more financial options, not fewer, the unprecedented provisions in AB 2501 would have limited Californians’ ability to gain access to credit now and in the future, further harming the state’s economic recovery.
AB 2501 failed to win enough votes to pass on June 15. Just 39 “yes” votes were showing each time the AB 2501 vote was displayed for an hour before the speaker closed the vote. The final tally was 28-25.
The Assembly adjourned for its summer recess on June 19 (the deadline for bills to pass the house in which they were introduced) without considering AB 2501 again, although the author had asked for it to be reconsidered.
Ayes (28): Berman (D-Palo Alto), Bloom (D-Santa Monica), Bonta (D-Oakland), Carrillo (D-Los Angeles), Chau (D-Monterey Park), Chiu (D-San Francisco), Chu (D-San Jose), Friedman (D-Glendale), Gloria (D-San Diego), Lorena Gonzalez (D-San Diego), Holden (D-Pasadena), Kalra (D-San Jose), Levine (D-San Rafael), Limón (D-Santa Barbara), McCarty (D-Sacramento), Mullin (D-South San Francisco), Muratsuchi (D-Torrance), Nazarian (D-Van Nuys), Rendon (D-Lakewood), Reyes (D-San Bernardino), Luz Rivas (D-Arleta), Robert Rivas (D-Hollister), Santiago (D-Los Angeles), Mark Stone (D-Scotts Valley), Ting (D-San Francisco), Weber (D-San Diego), Wicks (D-Oakland), Wood (D-Santa Rosa).
Noes (25): Bigelow (R-O’Neals), Brough (R-Dana Point), Burke (D-Inglewood), Chen (R-Yorba Linda), Choi (R-Irvine), Cooley (D-Rancho Cordova), Cunningham (R-San Luis Obispo), Megan Dahle (R-Bieber), Daly (D-Anaheim), Flora (R-Ripon), Fong (R-Bakersfield), Gallagher (R-Yuba City), Gray (D-Merced), Kiley (R-Roseville), Lackey (R-Palmdale), Mathis (R-Visalia), Mayes (NPP-Yucca Valley), Obernolte (R-Big Bear Lake), O’Donnell (D-Long Beach), Patterson (R-Fresno), Quirk-Silva (D-Fullerton), Ramos (D-Highland), Salas (D-Bakersfield), Voepel (R-Santee), Waldron (R-Escondido).
No vote recorded (26): Aguiar-Curry (D-Winters), Arambula (D-Fresno), Bauer-Kahan (D-Orinda), Boerner Horvath (D-Encinitas), Calderon (D-Whittier), Cervantes (D-Corona), Cooper (D-Elk Grove), Diep (R-Westminster), Eggman (D-Stockton), Frazier (D-Discovery Bay), Gabriel (D-San Fernando Valley), Cristina Garcia (D-Bell Gardens), Eduardo Garcia (D-Coachella), Gipson (D-Carson), Grayson (D-Concord), Irwin (D-Thousand Oaks), Jones-Sawyer (D-South Los Angeles), Kamlager (D-Los Angeles), Low (D-Campbell), Maienschein (D-San Diego), Medina (D-Riverside), Petrie-Norris (D-Laguna Beach), Quirk (D-Hayward), Rodriguez (D-Pomona), Blanca Rubio (D-Baldwin Park), Smith (D-Santa Clarita).