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Loan Modification Fraud
Assembly Bill 764 by Assemblyman Pedro Nava of Santa Barbara would have allowed individuals or companies to collect fees only after a loan modification is successfully obtained. Everyone from President Obama to housing advocates in the Bay Area had warned distressed homeowners against paying advanced fees. Those fees can be in the thousands of dollars, and often times these companies or individuals will do little or no work after getting their fees. These services are also available for free from non-profit agencies certified by the federal government as housing counselors.
In his veto message of AB 764, Governor Schwarzenegger wrote, "I do not agree with the provision of this bill that will only allow fees to be collected if a modification is successful. This could adversely affect legitimate businesses that provide loan modification services."
Kevin Stein of the California Reinvestment Coalition expressed disappointment in the Governor's action. "All the evidence that we've seen, or the bulk of the evidence, is that that there's a huge amount of fraud in this industry."
Stein said he was only modestly pleased that the Governor chose to sign Senate Bill 94 by Senator Ron Calderon of Montebello. That bill would ban the collection of advanced fees for a loan modification. He called it better than nothing, but weaker than AB 764.
>> See the 7 On Your Side story: Distressed Homeowners Face Loan Modification Fraud
Car Buyer Protection Bill
Another bill the governor signed provides protection for motorists who trade in their vehicles. More than 5,000 complaints were filed with the Department of Motor Vehicles last fiscal year about dealers who didn't pay off loans and transfer the title as promised. That leaves drivers liable for paying off the loan for a car they no longer have or thought they owned.
"SB 95 had so much support," said Rosemary Shahan of Consumers for Auto Reliability and Safety. "Consumers, auto manufacturers, auto lenders, a statewide law enforcement agency, district attorneys (all supported it) -- it just makes sense." SB 95 was authored by Senator Ellen Corbett, D-San Leandro, and requires auto dealers to pay off the loans within 21 days of when they are traded in and before the car is resold.
>> See the 7 On Your Side story: Car Buyers Paying Bills for Cars They don't Own
Used Car Data to Be Made Public
Car buyers won another right when the Governor signed AB 647. The bill requires the state to make public information about a car's history. That means if a used car has been in a serious accident-- that information will be made available to you before you buy the car. The bill is by Assemblyman Pedro Nava, D-Santa Barbara, and brings the state in compliance with the Anti-Theft Act originally passed by Congress in 1992, but which was just recently implemented.
>> See the 7 On Your Side story: California Not Participating in Used Car Data Base
Misleading Advertising
Governor Schwarzenegger signed a bill by Senator Leland Yee, D-San Francisco, requiring clear and conspicuous language whenever a company automatically renews a subscription or sale.
Under the negative opt out, customers are required to notify a company that they don't want something or they will get billed for it. Companies now risk fines of $2,500 per incident if they don't make those terms clear.
>> See the 7 On Your Side story: Consumers Get Unexpected Bills
Swimming Pool Safety
Children will now be protected from the powerful force of swimming pool drains. At least 35 children have died and another 100 injured after parts of their bodies were sucked in by the force of those drains. Some children died after being trapped underwater.
AB 1020 by Assemblywoman Fiona Ma, D-San Francisco, would require protective covers and other measures be added in public swimming pools to make them safe. 7 On Your Side randomly inspected nine swimming pools last year in San Mateo County and found all nine of them would need to make changes under the new law. The bill brings California in compliance with the Virginia Graeme Baker Spa and Pool Safety Act passed by Congress.
"We need the state and the federal government to work together in making this country's pools safe," said Paul Pennington of the industry trade group, the Pool Safety Council. "The new law provides local officials a framework to enforce the Virginia Graeme Baker Pool and Spa Safety Act in the state of California."
>> See the 7 On Your Side story: Children Drown from Hidden Swimming Pool Danger
>> See the 7 On Your Side story: Investigation exposes pool hazards
Low-Cost Auto Insurance
Finally a bill that would have extended a low cost auto-insurance program in California another three years has been vetoed by the Governor. The program offers bare-bones auto liability insurance to good drivers for about $350 per year. The pilot program has provided insurance to about 50,000 motorists, but is set to end next year. The bill by Assemblyman Dave Jones, D-Sacramento would have extended the program to 2015.
"This veto is out of touch with the real economy that many Californians are facing," said Doug Heller, Executive Director of the nonpartisan Consumer Watchdog. "Why would a program that has allowed nearly 50,000 Californians to buy auto insurance instead of driving uninsured and doesn't cost the taxpayers a dime be on the Governor's chopping block?"
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