Arnold Schwarzenegger Wants The US Economy To Fail

That's the only explanation I have for him vetoing AB1830:

Gov. Arnold Schwarzenegger vetoed a proposal today that would have imposed tougher restrictions on mortgage brokers, such as banning them from issuing exotic loans to subprime borrowers that cause balances to grow rather than shrink over time [...]

The bill by Assemblyman Ted Lieu, D-Torrance, would have banned subprime borrowers from obtaining "negative amortization" loans, agreements that offer low initial payments but increase the principal balance over time, boosting interest costs and making them difficult to pay off.

AB 1830 also would have specified that mortgage brokers owe a "fiduciary duty" to borrowers. It would have prohibited brokers from steering borrowers toward higher risk loans than they would qualify for based on their income and credit. And it would have capped prepayment penalties for borrowers who want to refinance their loans to seek better terms.

Schwarzenegger, in his veto message, said the bill had laudable goals but that it "overreaches and may have unintended consequences."

Overreaches into the profits of his mortgage lending industry buddies, that is. Schwarzenegger's concerns about putting state mortgage brokers at a "competitive disadvantage" compared to their unregulated federal counterparts is easily managed (like forcing anyone who does business in the state to work under one standard) and just a pathetic excuse.

We are in crisis mode on Wall Street right now because mortgage lenders, pressured by investment banks and securities markets, abused the process and came up with all sorts of exotic schemes to get borrowers into homes. This bill would have curbed the worst practices of the industry. The Governor would rather they continue. He would rather mortgage lenders rip off their customers. He would rather the economy sink into a deep recession.

One unexamined aspect of the Governor's character is how much of a mindless puppet he is for Chamber of Commerce interests. Let this be another example.