SACRAMENTO, Calif.-Foreclosure legislation continues to be the hot topic here in the Golden State's capital.
Bob Arnould, the CCUL's SVP of Government Affairs, told Credit Union Journal the housing market is still not performing and foreclosure rates are high, "so in California there will be a lot of pressure on the legislature to address foreclosure issues."
"This will be the fourth session in a row that foreclosure will dominate," he said. "The main problem is every legislator has a new idea on how to go after the bad guys, but the good guys always get hit by the ricochet. The legislators are aiming at lenders that refuse to talk to their borrowers, but later they realize credit unions worked with their members all the time and they have to go back and amend their legislation."
Melissa Ameluxen, director of State Government Affairs for the CCUL, said another dominant issue for 2012 will be California's continuing budget shortfall, estimated to be $13 billion.
"The governor is looking for some sort of income tax on upper income residents or a sales tax, which will affect state credit unions that pay sales tax," she said. "We are in the second year of a two-year session, which can bring attention to bills that have not gotten a lot of sunshine in the legislature. It is likely the new bills will start popping up in January."
Arnould said credit unions likely would not be one of the places the California legislature would look to address the shortfall "because a tax on credit unions would be a drop in the bucket."
"The state of the state's budget is a concern for everyone in California," he said. "There have been four years of deep budget cuts, so the choices become more painful each year. Tax rates are already relatively high, so increasing revenue is not easy."
Arnould said the Government Affairs team intends to continue pushing to lift the cap on member business lending. He warned tax reform discussion will heat up in 2012, meaning credit unions will have to continue their vigilance on the tax exemption issue.
"It will come to a boil in 2013 after the Bush tax cuts expire Dec. 31, 2012," he said. "Member business lending has had hearings in the Senate and the House. Supplemental capital has been discussed in committees and there is a recognition that credit unions need access to capital. Both issues will move further up the radar screen in 2012."
