Court Opinion

ID: 9797939
Source: CourtListenerOpinion
Date Created: 2023-08-31 04:32:54.377748+00
Date Added: 2024-06-11T08:59:52.729737
License: Public Domain

GEORGE, C. J., Dissenting.
I respectfully dissent.
Past California cases establish that a general statewide statute will be held to preempt all local legislative measures only when the state legislation, explicitly or impliedly, “clearly indicates” that the Legislature intended to fully occupy the field and preclude all local regulation. (Sherwin-Wlliams Co. v. City of Los Angeles, (1993) 4 Cal.4th 893, 898 [16 Cal.Rptr.2d 215, 844 P.2d 534].) Here, the Legislature consciously considered including express preemption language in the statewide statute (division 1.6 of the Financial Code, §§ 4970-4979.8),1 but ultimately omitted any such language from the statute as one of the essential elements of a compromise that led to the enactment of the legislation. In view of this legislative background— which demonstrates that the statute does not “clearly indicate” a legislative intent to preempt all local legislation—and the distinctive local interest that the City of Oakland has in adopting stringent and effective measures to protect its residents from the predatory lending practices at issue, I cannot agree with the majority that Division 1.6 properly may be found to preempt the Ordinance in its entirety.2
I
Unlike our previous implied preemption cases, this is not simply a case in which the Legislature was silent about preemption. Here, there is considerable extrinsic evidence, and a concession from the party arguing in favor of preemption, that the Legislature specifically considered and purposefully rejected an express preemption clause despite extensive lobbying for the inclusion of express preemption language in the state statute. As plaintiff American Financial Services Association (AFSA) itself acknowledges, there *1266were strongly held disagreements over preemption between industry representatives and consumer proponents of the bill. Indeed, the record reveals that the subprime lending industry vigorously lobbied for express preemption language.
Under normal circumstances, the mere absence of express preemption language would not be dispositive. But here the party arguing in support of preemption explicitly has admitted that there were insufficient votes in the Legislature to enact the bill with an express preemption provision. Specifically, AFSA’s brief acknowledges that “the Legislature could say nothing for or against preemption without risking defeat of [Assembly Bill No.] 489. So it elected to remain silent.” (Italics added.) The majority fails to acknowledge or afford appropriate consideration to this admission.
Moreover, contrary to the majority’s reading of the relevant legislative history, I believe this history supports AFSA’s concession. This is not a situation where the preemption issue was abstract or peripheral. Indeed, the issue of preemption was arguably at the forefront of the debate over Assembly Bill No. 489 (2001-2002 Reg. Sess.) (Assembly Bill No. 489). For instance, the members of the Senate Banking Committee that forged the legislative compromise that led to passage of the bill heard testimony from Oakland City Councilman Ignacio de la Fuente regarding the imminent passage of the Ordinance. In response to this testimony, a committee member expressed concern that without express preemption language, there would be a host of different lending policies from community to community. In response, the bill’s co-author, Assemblywoman Migden, stated at the August 27, 2001, hearing on Assembly Bill No. 489 by the Senate Banking, Commerce and International Trade Committee: “We’re trying to make sure that everyone can live with the bill, industry and consumers alike and . . . we’ve decided ... to be silent on [preemption], which does lend different interpretations.”
At the same hearing, the committee also heard from numerous financial industry representatives who urged the committee to include preemption language. (Adam Bass of Ameriquest Mortgage Company: “preemption is a major issue”; John Ross, Mortgage Bankers Assn.: “preemption is a big issue for our members”; Brian Kennealy of the Responsible Mortgage Lenders Coalition: “preemption is a very, very important issue to us and our members”; Eleanda Delgado of Irwin Home Equity Corp., agreeing with the others; Bernard Nevins, Cal. Assn, of Industrial Bankers: preemption “can’t hurt and it would be very bad if you didn’t do it”; Phil Eisenberg, American Intemat. Group: “the preemption issue is fundamental. It’s not cursory. It’s not a medium-sized issue. It’s fundamental”; Tom McMorrow, Countrywide Mortgage and First Union: “Preemption remains fundamental.”) This effort by the financial industry to include express preemption language in the statute *1267further establishes that silence on the preemption issue was not inadvertent but deliberate, part of a legislative compromise “to make sure that everyone can live with this bill, industry and consumers alike . . . .” The majority’s assertion that the Legislature’s silence on preemption was inadvertent, or that the Legislature believed that express preemption language was unnecessary, is simply untenable.
The majority minimizes the foregoing history by arguing that although an express preemption issue “may have arisen” at some point during the bill enactment process, the issue was peripheral. As noted, this ignores AFSA’s concession that the issue of express preemption not only “arose,” but threatened to derail passage of the bill. Thus, this is not simply a case where “someone somewhere . . . suggested to the Legislature an express preemption clause would be useful, and the Legislature declined to adopt that suggestion.” (Maj. opn., ante, at p. 1261.) This is a case where passage of the bill hinged on the inclusion or exclusion of express preemption language. Thus, this is not a case where the city relies on the mere absence of express preemption to argue against implied preemption. There is significantly more evidence of deliberate exclusion of a preemption provision here, and the majority’s concern about the demise of the doctrine of implied preemption is unwarranted.
Nonetheless, it can be argued, as AFSA does, that the stalemate on the preemption issue neither supports nor undermines a conclusion as to preemption, and that the court should resort to certain default rules about preemption that it has developed over the years. But one of those rules, indeed the principal rule, is that legislative intent be clearly indicated. As the Court of Appeal noted in California Rifle & Pistol Assn. v. City of West Hollywood (1998) 66 Cal.App.4th 1302, 1317 [78 Cal.Rptr.2d 591], the Legislature’s failure to include express preemption language may be critical. “Claims of implied preemption must be approached carefully, because they by definition involve situations in which there is no express preemption. Since preemption depends upon legislative intent, such a situation necessarily begs the question of why, if preemption was legislatively intended, the Legislature did not simply say so, as the Legislature has done many times in many circumstances.” (Ibid.) Hence, the rule has developed that implied preemption properly can be found only when the circumstances “clearly indicate” a legislative intent to preempt. (Sherwin-Wlliams Co. v. City of Los Angeles, supra, 4 Cal.4th 893, 898.) The need for such a “clear indication” is especially acute when the extrinsic evidence and the concession of the parties demonstrate that the Legislature declined to adopt an express preemption provision because such a provision would not command a majority of the Legislature. A legislative stalemate on preemption is not an indication of a clear intent to preempt local legislation.
*1268II
The majority’s emphasis on state uniformity and historical regulation patterns also fails to acknowledge properly the respect this court traditionally has accorded to localities regarding issues that have a unique local impact. As we stated in Fisher v. City of Berkeley (1984) 37 Cal.3d 644, 707 [209 Cal.Rptr. 682, 693 P.2d 261], “[w]e will be reluctant to infer legislative intent to preempt a field covered by municipal regulation where there is a significant local interest to be served that may differ from one locality to another.” I am particularly troubled by the majority’s express disapproval of the Court of Appeal’s contention that “ ‘when the Legislature is silent on preemption, courts presume there is no intent to preempt.’ ” (Maj. opn., ante, at p. 1261.) To the contrary, as the Court of Appeal aptly observed in Gluck v. County of Los Angeles (1979) 93 Cal.App.3d 121, 133 [155 Cal.Rptr. 435], the common thread of our preemption cases is that “if there is a significant local interest to be served from one locality to another then the presumption favors the validity of the local ordinance against an attack of state preemption.”
The regulation of predatory lending undoubtedly is an area of statewide concern. Nevertheless, I am not persuaded that the field is exclusively so, thus leaving no room for local regulation. “The significant issue in determining whether local regulation should be permitted depends upon a ‘balancing of two conflicting interests: (1) the needs of local governments to meet the special needs of their communities; and (2) the need for uniform state regulation.’ ... [1] That basic issue, in turn, may in a specific instance be fragmented into the component issues which combine to effect its resolution such as whether local legislators are more aware of and better able to regulate appropriately the problems of their areas, whether substantial geographic, economic, ecological or other distinctions are persuasive of the need for local control, and whether local needs have been adequately recognized and comprehensively dealt with at the state level. Certain areas of human behavior command statewide uniformity, especially the regulation of statewide commercial activities and the conduct of transient individuals, so that mobility may not be burdened unreasonably.” (Robins v. County of Los Angeles (1966) 248 Cal.App.2d 1, 9 [56 Cal.Rptr. 853].)
As the court made clear in Robins, although the need for state uniformity is an important consideration in resolving preemption questions, the interests of the locality also are entitled to considerable weight. “The pervasive question to be answered is: Does the demand for uniformity throughout the state outweigh the needs of local governments to handle problems peculiar to their communities.” (Tri County Apartment Assn. v. City of Mountain View (1988) 196 Cal.App.3d 1283, 1294 [242 Cal.Rptr. 438].)
*1269The record in this case establishes that Oakland’s Ordinance was adopted because many low-income homeowners in the City of Oakland were targeted by unethical mortgage lenders using predatory lending practices. Many low- and moderate-income homeowners in Oakland were unable to obtain conventional legitimate financing. Local conditions allowed predatory lenders to thrive, and their practices unfairly stripped homes of equity value and resulted in a number of unjust home foreclosures. Often, through fraudulent means, homeowners were charged exorbitant fees and interest rates and unfairly were persuaded to incur mortgage debt in excess of their needs or ability to pay. The record reflects that the Oakland City Council, in passing the ordinance in question, found that the predatory lending problem in Oakland was particularly aggravated “because of the high number of minority and low income homeowners in Oakland, and the pressures of gentrification in certain neighborhoods that increase property values and home equity,” which have led to a situation in which “Oakland residents in low income areas have been perceived to be ‘the house rich and the cash poor’ and thus are prime targets for predatory lending practices.”
Oakland’s findings mirror the conclusions of the United States Department of Housing and Urban Development (HUD) in an analysis of almost one million mortgages reported nationwide in calendar year 1998 under the Home Mortgage Disclosure Act. (See HUD Rep., Unequal Burden: Income and Racial Disparities in Subprime Lending in America (Apr. 2000), http://www.hud.gov/library/bookshelfl8/pressrel/subprime.html [as of Jan. 31, 2005] (HUD Report).) HUD’s detailed analysis reached four critical conclusions: (1) from 1993 to 1998, the number of subprime refinance loans increased tenfold;3 (2) subprime loans are three times more likely in low-income neighborhoods than in high-income neighborhoods; (3) subprime loans are five times more likely in African-American neighborhoods than in White neighborhoods; and (4) homeowners in high-income African-American neighborhoods are twice as likely as homeowners in low-income White *1270neighborhoods to have subprime loans.4 HUD concluded that its analysis “clearly demonstrates the exponential growth in subprime lending and its disproportionate impact on low-income and particularly, minority homeowners and communities throughout the nation.” (See HUD Rep., supra, http://www.hud.gov/library/bookshelfl8/pressreFsubprime.html.)
As HUD’s conclusions illustrate, Oakland’s particular interest in regulating subprime loans goes beyond merely protecting its particularly vulnerable citizens. As one amicus curiae points out, “predatory lending is not just a consumer protection issue; it is a community development issue, because it threatens the stability of lower income homeowning neighborhoods ....[][] Predatory home mortgage lending has enormous impacts on targeted neighborhoods. Predatory lending practices, particularly the phenomenon of ‘asset based lending,’ contribute to an increase in the number of foreclosures. This can result in abandoned houses and blighted neighborhoods and contribute to the physical and economic deterioration of lower-income, minority, and inner city communities. ‘Foreclosures, especially in low- and moderate-income neighborhoods turn what might be typically viewed as a consumer protection problem . . . into a community development problem, in which increased foreclosures lead to property abandonment and blight.’ ” (Quoting HUD Rep., Recommendations to Curb Predatory Home Mortgage Lending (June 2000) pp. 24-25, available online at http://www.treas.gov/press/releases/reports/treasrpt.pdf [as of Jan. 31, 2005].)
In view of the community degradation caused by predatory lending, Oakland reasonably could have concluded that it was important to include holders in due course within the Ordinance’s purview. The bulk sale of mortgage loans on the secondary market is the primary profit incentive for subprime mortgage lenders. (See Eggert, Held up in Due Course: Predatory Lending, Securitization, and the Holder in Due Course Doctrine (2002) 35 Creighton L.Rev. 503, 577 [noting that a primary reason for the rapid growth of the industry “is that the existence of ready capital available to lenders through the securitization of subprime loans has dramatically increased their ability to make those loans”].) The innovation of selling mortgage loans in bulk is, in fact, what fueled the enormous growth of the subprime mortgage industry. (See id. at p. 578) As the City of Oakland points out, “sales of subprime loans by predatory lenders is the inducement and profit-basis for their business practice of encouraging ever higher and larger loans to subprime borrowers, i.e. larger ‘inventory’ of loans for sale to others—all to the detriment of the consumer public.” Thus, Oakland reasonably could have *1271concluded that because the bulk of subprime loans are sold on the secondary market, the Ordinance would have significantly greater deterrence effect if borrowers were able to invoke the defense of predatory lending in a foreclosure or other enforcement action against the secondary buyers who otherwise might be immune from liability. Otherwise, as one amicus curiae points out, “[s]ince most subprime loans are sold on the secondary market, the lack of assignee liability provides little incentive to the industry to clean up its practices.”
The Legislature was free to conclude that treatment of predatory lending requires statewide uniformity. Alternatively, however, it could conclude that only a statewide minimum standard of conduct is necessary, and that local jurisdictions have some freedom to additionally regulate predatory lenders pursuant to the municipal police power to prevent urban decay and neighborhood blight. Because of the local, varying nature of the problem, this is not a case in which having differing local standards is wholly illogical. (Cf. Tolman v. Underhill (1952) 39 Cal.2d 708, 713 [249 P.2d 280] [loyalty oaths for state employees requires uniform treatment]; Northern Cal. Psychiatric Society v. City of Berkeley (1986) 178 Cal.App.3d 90, 102 [223 Cal.Rptr. 609] [no special local interest with regard to regulation of electroshock therapy].) All we can be certain of is that Division 1.6 was the product of a legislative compromise, and that the compromise included deliberate silence on the matter of preemption.
As discussed above, predatory lending is characterized by loans that are aggressively marketed to borrowers who often cannot afford the payments and eventually default on the loans. The city argues that the high rate of default and foreclosure has led to the degradation of entire neighborhoods and has contributed to the already substantial problem of urban blight in Oakland. The field of predatory lending regulation is one in which conditions peculiar to the locality are likely to differ from place to place and where supplemental regulation may well fall within the realm of local government. (Gluck v. City of Los Angeles, supra, 93 Cal.App.3d 121, 133 [upholding a Los Angeles ordinance regulating the placement and display of news racks on public rights-of-way].)
This court has acknowledged that the balance of power between state and local municipalities recognizes that a one-size-fits-all solution is not always in the best interest of the residents of a particular community. (See, e.g., California Rifle & Pistol Assn. v. City of West Hollywood, supra, 66 Cal.App.4th 1302, 1318 [recognizing the need for caution in “depriving local municipalities of aspects of their constitutional police power to deal with *1272local conditions”].) Keeping this in mind, courts have taken care to harmonize the general law and the localized need for municipal regulation even where the record reveals a pronounced statewide interest and a comprehensive statewide scheme relating to the field. (See, e.g., People v. Butler (1967) 252 Cal.App.2d 584 [60 Cal.Rptr. 659] [upholding ordinance prohibiting consumption of alcoholic beverages on public streets despite a comprehensive statewide scheme relating to such beverages]; Gleason v. Municipal Court (1964) 226 Cal.App.2d 584 [38 Cal.Rptr. 226] [upholding local ordinance proscribing loitering despite the then broad sweep of Penal Code section 647].) The case before us falls squarely within this line of precedent.
The cases cited by the majority do not compel a contrary conclusion. Although our numerous preemption cases resist easy harmonization, one theme that emerges is that those municipal ordinances that have been found to be preempted have been seen as subverting, in some tangible way, the purpose and intent of the state statute. This is true of each of the cases relied upon by the majority. In Wilson v. Beville (1957) 47 Cal.2d 852 [306 P.2d 789], we invalidated a local ordinance that attempted to impose conditions more stringent than those imposed by the state on the exercise of the power of eminent domain by specifying a shorter statute of limitations for the filing of a claim. There, we observed that a “city charter cannot give a shorter time, make more onerous the recovery of compensation, than the legislation has.” (Id. at p. 861). We also observed that “a municipality may not curtail or abridge the rights so granted [right to recover for tort] by specifying, through charter provision, a shorter time limitation . . . than the period fixed by the statute.” (Ibid., italics omitted, citing Eastlick v. City of Los Angeles (1947) 29 Cal.2d 661, 666 [177 P.2d 558].) The local legislation thus undermined the statute by making the recovery of compensation more onerous. As such, the local ordinance was invalid because the Legislature had “provided a complete and detailed system for exercising the right of eminent domain and assessing compensation.” (Wilson v. Beville, supra, 47 Cal.2d at p. 860.)
Similarly, in Eastlick, we struck down a requirement in the Los Angeles City Charter that required a personal injury claimant to itemize the damages in her claim. The requirements for a personal injury claim under state law did not require such specificity. (Eastlick v. City of Los Angeles, supra, 29 Cal.2d 661, 666.) Again, as in Wilson, the locality had attempted to abridge and circumscribe a state law right, thereby undermining the purpose of the state regulation. (Ibid.) Likewise, in Birkenfeld v. City of Berkeley (1976) 17 Cal.3d 129, 152 [130 Cal.Rptr. 465, 550 P.2d 1001], we invalidated a provision in the Berkeley City Charter that attempted to impose additional restrictions on a landlord’s right to evict a tenant. There, we observed that *1273requiring “landlords to fulfill the elaborate prerequisites for the issuance of a certificate of eviction by the rent control board before they commence the [state] statutory proceeding would nullify the intended summary nature of the [statutory] remedy.” (Id. at p. 151.) In Isaac v. City of Los Angeles (1998) 66 Cal.App.4th 586, 600 [77 Cal.Rptr.2d 752], the Court of Appeal held that an ordinance that gave utility liens priority over other recorded liens was preempted “because it disrupts California’s statewide statutory scheme of lien priority” by giving the utility lien a priority over other liens that the state has determined should have priority.
The common theme running through these cases is that a locality may not impose additional burdensome requirements upon the exercise of state statutory remedies that undermine the very purpose of the state statute. Here, we are presented with a fundamentally different relationship between the state statute and local regulations. The Ordinance does not appear to undermine any of the stated goals of Division 1.6. To the contrary, the ordinance grants borrowers additional rights not afforded under state law, such as restrictions on prepayment penalties, mandatory credit counseling, and the opportunity to present defenses to secondary buyers of their mortgages if the borrowers have been victimized by predatory lending practices. Far from subverting Division 1.6, the Ordinance furthers the stated goal of the state legislation by providing additional protections to the low-income borrowers in Oakland who are especially vulnerable to predatory lending practices.
The majority argues, however, that the Ordinance does disrupt the balance struck by the Legislature in enacting Division 1.6. The majority asserts that Division 1.6 balanced “the need to protect particularly vulnerable consumers from predatory lending practices and the concern homeowners not be unduly hindered in accessing the equity in their own homes.” (Maj. opn., ante, at p. 1257.) The majority observes that “[s]evere regulation of subprime lending might cause lenders to cease making such loans in California, or preclude borrowers from obtaining a loan based on equity in their home even though such loans can serve a legitimate need. . . . Thus, the Legislature was aware regulation of certain predatory practices in mortgage lending, practices which occur most often in the subprime market, could have the unintended consequence of hurting those the legislation was intended to help, and sought to balance these competing concerns. The Ordinance, and the possibility of other divergent and competing local measures throughout California, upsets that balance.” (Id., at pp. 1257-1258.)
*1274Although it undoubtedly is true that the Legislature struck a balance to ensure passage of the bill, the balance was the product of compromise between consumer protection interests and finance industry interests. In order to glean the intent of the Legislature regarding preemption, we must examine the entirety of that compromise, and not selective parts of it. As discussed above, that compromise included the omission of any provision relating to preemption of local legislation. Yet, the majority concludes that preemption nonetheless was intended, emphasizing the Legislature’s supposedly overriding concern regarding the threat that patchwork regulation might pose to low-income borrowers’ access to capital. This emphasis on the need to prevent undue regulation ignores the principal purpose of Division 1.6, which is to improve consumer protection against predatory lending practices, not to protect lenders from unduly restrictive regulation.
The majority’s implicit assumption is that Oakland’s Ordinance, by providing for stricter regulation of certain areas of subprime lending, necessarily will cause lenders to cease making loans in Oakland and in California as a whole. (Maj. opn., ante, at pp. 1257-1258.) Had a majority of the Legislature agreed with that proposition, however, it could be expected that the legislation would have included a provision expressly preempting local legislation. The conscious omission of an explicit preemption provision demonstrates that" the Legislature could not agree that local legislation would undermine or impair the objectives of the state legislation. Furthermore, should the undesirable consequences forecast by the majority come to pass, the Legislature, of course, would be free to step in and add an express preemption provision to Division 1.6.
The majority also places great emphasis on the City’s admission that in more than 150 years of California history, no municipality has attempted to regulate mortgage lending. (Maj. opn, ante, at p. 1255.)5 But we never have required a locality to prove a historical practice of regulation to establish the validity of a local regulation. Rather, as outlined above, the proper inquiry requires a clear indication of legislative intent and a studied balance between the need for state uniformity and the particular interest of the locality. Although historical regulatory patterns may be significant in assessing legislative intent, we must assess that history in context. The subprime mortgage industry has undergone tremendous growth in recent years. (See ante, fn. 3.)6 During that period, predatory lending has had a grossly disproportionate *1275impact on low-income and minority homeowners and communities. Under these circumstances, it is reasonable that the communities most affected would see a need to take action to protect their residents.
Thus, despite the circumstance that mortgage regulation historically has occurred at the state rather than the local level, we must recognize the concerns implicated by the recent rapid escalation of predatory lending. In view of the documented evidence that predatory lending is especially pervasive in low-income and minority neighborhoods, it is beyond dispute that Oakland and other similarly situated localities have a more significant interest in regulating subprime lending than localities that, because of demographics and composition, are not targeted in similar ways. Local regulation thus is not only constitutionally valid, but practically vital to the affected communities. Although predatory lending certainly is a matter of statewide concern, the specific interests of the communities most affected by the banned practices make the regulation of this field particularly amenable to local variations. Oakland’s own interest in preventing predatory lending provides ample justification for that locality’s enactment of stricter and more protective regulations designed to ensure that its residents receive adequate information before saddling themselves with financial obligations that could prove devastating.
In sum, I agree with the city and the decision of the Court of Appeal below that Division 1.6 establishes a floor, not a ceiling, for the regulation of predatory lending practices. As the majority recognizes, the rule of implied preemption is a “ ‘rule of necessity, based upon the need to prevent dual regulations which could result in uncertainty and confusion.’ ” (Maj. opn., ante, at p. 1252.) As discussed above, the Ordinance provides added protections for its citizens that will not result in uncertainty or confusion, and absent a clearly evident legislative intent I believe the Ordinance is not preempted.7
*1276I would affirm the judgment of the Court of Appeal, upholding the validity of Oakland’s antipredatory lending ordinance.
Kennard, J., and Moreno, J., concurred.

 For convenience, like the majority opinion, I shall refer to the relevant state statute as “Division 1.6,” and the relevant local legislation as the “Ordinance.”

 Because the majority concludes that the Ordinance is invalid in its entirety, I do not reach the question whether some individual provisions of the local enactment may be inconsistent with Division 1.6 and for that reason preempted by that legislation.

 The subprime mortgage market is a market providing credit access to borrowers who might not qualify for traditional financing, such as those with impaired credit, limited income, or high debt-to-income ratios.
HUD reports that in 1993, there were 80,000 subprime refinance loans reported under the Home Mortgage Disclosure Act. By 1998, this number had increased by more than 900 percent to 790,000. “The magnitude and speed of the increase in subprime lending alone— almost 1000% in just five years—creates a critical need for greater scrutiny and concern. While the rapid growth of subprime lending may, on the surface, appear to be good news for higher-risk borrowers, behind the numbers there is some evidence that some portion of subprime lending is occurring with borrowers whose credit would qualify them for conventional loans. Subprime lending may expose borrowers to higher up-front fees and interest rates than they would bear if they had obtained prime loans.” (HUD Rep., supra, http://www.hud.gov/library/bookshelfl8/pressrel/subprime.html.)

 HUD also analyzed the prevalence of subprime loans in five urban areas (Atlanta, Philadelphia, New York, Chicago, and Baltimore), concluding that a study of the five cities “gives a good sense that the trends identified above are consistent at the metropolitan level.” (HUD Rep., supra, http://www.hud.gov/libraryAookshelfl8/pressrel/subprime.html.)

 Of course, as the majority acknowledges, Oakland is not the only municipality seeking to regulate in this field. Los Angeles also recently enacted an Ordinance regulating predatory lending practices. (L.A. Mun. Code, ch. XVIII, art. 1, § 181.07, subd. (B).)

 Moreover, the Legislature was aware that historically, the subject of subprime lending has not been addressed by existing regulation. A bill analysis stating the purposes of Assembly Bill No. 489 states that “[t]he licensing laws under which subprime lenders operate predate the development of the subprime market and therefore did not envision the types of problems that *1275have arisen in this market. In fact many real estate loans are specifically exempted from consumer protections in these laws.” (Assem. Com. on Appropriations, Analysis of Assem. Bill No. 489 as amended May 1, 2001, p. 3.)

 Although the majority does not reach the point, I note that AFSA also argues that because the Ordinance does not apply to federally chartered lenders, it is preempted by Civil Code section 1916.12, which creates a mechanism for the state to respond to changes in federal lending laws by adopting conforming changes in the regulation of state lenders. I agree with the Court of Appeal that Civil Code section 1916.12 does not preempt the Ordinance. Section 1916.12 does not evidence a legislative intent to preempt and does not mandate absolute parity in the treatment of federal and state lenders at either the state or municipal level, and thus does not preempt the Ordinance.