Assemblyman Pedro Nava (D – Santa Barbara), Chair of the Assembly Banking and Finance Committee, was joined on April 27 by the California Labor Federation, Consumers Union, California Public Interest Research Group (CALPIRG), and the Association for Community Reform Now (ACORN) at a Capitol press conference to announce the Corporate Responsibility Act of 2009.

The Corporate Responsibility Act (AB 1075) and other initiatives are designed to protect California taxpayers, consumers and families from mortgage fraud and abuse, and to clean up the banking and mortgage industry.

“We want to ensure that there will be no waste or abuse of taxpayer TARP (Troubled Asset Relief Program) money in California,” said Nava. “Taxpayers want TARP dollars to be reinvested in their communities, not to pay out executive bonuses or host lavish Las Vegas parties.”

As Chair of the Assembly Banking and Finance Committee, Assemblyman Nava led the charge to clean up the mortgage and banking industry in California and make sure that government bailout money is used for its intended purpose. Earlier in 2009, Nava held a number of informational hearings attended by consumer advocates, federal and state regulators, and industry representatives. The hearings focused on the crisis in the mortgage loan and housing markets and its devastating impact on California families. Nava’s legislative measures are a result of these hearings.

“Consumers Union applauds Assemblyman Nava for championing legislation to protect Californians from rampant loan modification scams by prohibiting anyone from charging an advance fee to provide loan modification services,” said Norma Garcia, Senior Attorney for the Consumers Union. “Consumers lose while these entities drain money from the very individuals who are supposed to benefit from the free government programs designed to minimize unnecessary foreclosures through loan modifications. Without legislation such as AB 764 (the Homeowner Fraud Prevention Act), these entities will continue to take unfair advantage of vulnerable consumers, charging them thousands of dollars and delivering little or no value.”

Caitlin Vega of the California Labor Federation agrees.

“The two million working families we represent are at the epicenter of the foreclosure freefall,” said Vega. “Predatory lenders steered borrowers into loans they could not afford, and now many families are at risk of losing everything they’ve worked for. We commend Assemblyman Nava’s commitment to bringing about real reform of the mortgage and banking industries to protect working families and restore the American dream of home ownership.”

“I am honored to be working with consumer organizations and the California Labor Federation to bring about much needed consumer protections and reforms to the California mortgage and banking industry,” said Nava. “California families affected by the crisis in the mortgage loan and housing markets need action. We need strong laws to prohibit unfair, abusive and deceptive lending practices, as well as stepped up oversight and enforcement of the industry.”

— John Mann is a spokesman for Assemblyman Pedro Nava, D-Santa Barbara.