Severson Attorney Mark Kenney Testifies Before Assembly Banking Committee

(Last updated March 1, 2005)

On February 28, Severson’s Mark Kenney appeared before the California Assembly Committee On Banking & Finance, chaired by the Hon. Ronald S. Calderon. The Committee was holding an informational hearing on the topic: “Covered and Subprime Loans in California: Are Consumers Getting The Protection They Need?”

In significant part, this hearing was held to address consumer and industry responses to the California Supreme Court’s recent landmark decision in AFSA v. City of Oakland. That case, brought by Severson & Werson on behalf of the American Financial Services Association, held that the entire field of regulation of “predatory” practices in home lending in California was preempted by the comprehensive regulatory scheme enacted by the California. This means that local municipalities may not themselves attempt to legislate or regulate on the subject.

The Committee invited AFSA to address the issues presented in AFSA v. Oakland, and the significance of the decision. AFSA, in turn, asked Mr. Kenney, who argued the case to the California Supreme Court, to appear on its behalf. Mr. Kenney directed his testimony not to the merits of any particular regulatory issue, but to the broader proposition that it is the California Legislature — as opposed to local cities and towns — which is best suited by history, context, resources and perspective to legislate in this critical field. As the Supreme Court noted, over the 150 years of California history, lending regulation has always been the exclusive domain of the state and federal governments. Mr. Kenney explained that a proliferation of conflicting or overlapping local measures would create confusion and uncertainty, and would not be tolerated by the secondary markets which provide the capital for California’s consumers to buy homes.

In conclusion, Mr. Kenney asked that the Legislature take care to preserve its critical, exclusive role in this arena.

Mr. Kenney is Severson & Werson’s Chair and Managing Director. Severson Members Donald Querio and Jan Chilton also represented AFSA in the Oakland matter. For further information about the Assembly hearing, legislative developments or the AFSA v. Oakland case and its impact, please contact them at One Embarcadero Center, 26th Floor, San Francisco, CA 94111, telephone: (415) 398-3344, or e-mail them at mjk@severson.com, djq@severson.com, or jtc@severson.com.