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How the Big Banks Lost and Homeowners Won in California

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Banks are among the most powerful, if not the most powerful, private institutions in the country. Sen. Durbin (D-IL) famously commented "they own the place," referring to the U.S. Senate. But once in awhile, through concerted efforts, they can be beaten.

On July 2, the California Legislature passed a package of laws known as the Homeowner Bill of Rights (HBOR) which began to put homeowners on a more level playing field with banks. The legislation, once signed by Governor Jerry Brown, could positively impact over 700,000 homeowners who are in the "foreclosure" pipeline. It's a BFD for California, but it may well be a BFD for the rest of the country.

Why? Because while California is dark blue through most lenses -- the Democrat always wins for president; all of the statewide elected office holders are Democrats and Democrats hold large majorities in both houses of the Legislature -- at 19 members, we still have the largest Republican congressional delegation of any state. This means that many of the Democrats in the legislature vote "purple" as often as they do blue. That means winning truly progressive economic legislation is tough, if not impossible here. Big Banks, Big Business, the Chamber of Commerce and their allies spend Big Money to keep the state from siding with consumers and homeowners when possible.

If anyone doubts this, look at the $47 million that Big Tobacco spent last month to defeat a ballot measure that would have raised taxes on cigarettes by a buck a pack to fund cancer research and smoking cessation programs. They won. The people lost.

Bills that looked very much like the Homeowner Bill of Rights had been introduced for four years. They died in committee or on the floor at various times, until now. The difference?

1. Progressives built a large coalition that cared deeply about homeowners and not about politicians or taking credit. The coalition began its work a year ago, focused on what became the 50-state mortgage/robo signing settlement between the states, the Obama administration, and the banks. We had faith-based groups (PICO), community organizers (ACCE), organized labor, policy experts (CRC and CRL) and online organizers (Courage Campaign). We never once quibbled about credit or goals. We each did what we were best at and worked constantly to support and fill in the gaps among ourselves.

2. We have a progressive, determined Attorney General in Kamala Harris willing to work with advocates and organizers. In the case of the national settlement, we chose to embrace the Attorney General and assume she was our ally. While other groups took a more accusatory tone, our coalition knew that A.G. Harris was fundamentally one of us. Our job then was to support her in getting to the right place, which she did in a big way. Her negotiating talent reaped some $18 billion in settlement funds for Californians versus the $2-3 billion on the table before she walked away. With that victory at her back, A.G. Harris introduced the HBOR as a strong, necessary follow up to the national settlement. She and her staff never backed down, never gave up. And they understood the role that the coalition played.

3. The State Senate President Pro Tem, Darrell Steinberg, realized that to win, he had to deal with that moderate group of Democrats who had blocked similar legislation in the past. Our coalition put serious pressure on those elected officials, including launching and publicizing Courage Campaign's Foreclosure Flashlight which showed the amount of money representatives had taken from the mortgage industry, the number of foreclosures in their home counties, how they'd voted in the past, and how they said they'd vote this time. Our colleagues at ACCE put signs out and knocked on doors in districts to make the point. PICO clergy met with these representatives, quietly but firmly pressing the case for justice. One of the committee members resigned in the face of this. The one who took his place, also a so-called moderate business Democrat, actually made the legislation happen. Inside/outside.

4. Occupy happened. While Occupy as a movement did not advance this legislation, it changed the atmosphere last autumn and made clear that Big Banks cause Big Problems when unregulated and unchained. Our coalition extended and focused that atmospheric change, supporting and/or pushing the elected leaders. Two months ago, this bill had no "private right of action," the teeth in the legislation that allows homeowners to sue banks to stop illegal foreclosures. Our coalition fought tooth and nail to keep that in, and we won.

We walk out of this year-long (and for some of our colleagues years-long) battle having proven that there are good political leaders, but no matter how good they are, they cannot win progressive legislation on their own. We are obligated to change the political scene, to support, attack, cajole and be unreasonable in the service of strategic outcomes.

As goes California, so goes the nation. This landmark legislation, far from perfect, should be replicated across the country. And we heartily encourage coalitions to form in the states to operate as we did and do. While we all have to get publicity for our work, it's useful to remember the aphorism: never underestimate the amount you can do if no one takes credit.