Sen. Mike Machado, a Linden Democrat who chairs the Senate's Banking, Finance and Insurance Committee, proposed both of the lending-related bills: • SB 223 would prohibit licensed appraisers from being unduly influenced by someone with an interest in a real estate transaction or from being paid based on the value of property they evaluate. • SB 385 would make state-regulated mortgage lenders and brokers subject to federal guidelines on nontraditional mortgages, including notifying consumers of all risks in a clear, balanced and timely manner.

Machado's two bills received nonpartisan support. "It is critical that we take steps to protect Californians against unscrupulous lending practices and to ensure that consumers can make informed decisions," Schwarzenegger said in a written statement. SB 223 was passed by the Legislature as an urgency measure, meaning it will take effect immediately upon signing by Schwarzenegger. With massive sums of money invested and powerful interests involved, state officials have struggled to reach consensus on what’s needed to ease the subprime loan crisis. SB 223 and SB 385 represent two of the least controversial options. Machado said they are significant for curing defects in lending practices and protecting future borrowers. But Machado said that if lending institutions prove unwilling to rework subprime loans held by struggling homeowners, he will not hesitate to push stronger measures next year. A Sacramento Bee story