The Council of State Governments
October 2008

Dear Readers:

The response to our first issue of State E-News has been overwhelmingly positive. Your kind comments have been encouraging. State E-News wants to keep the CSG community armed with the resources needed to tackle current challenges to state governance. If there is a topic you believe should be addressed in the biweekly State E-News or our printed monthly publication, State News, please e-mail us at or

We look forward to hearing from you,

Jack Penchoff
Director of Communications

In This Issue
Tumult on Wall Street
Mortgage Oversight
Election Year Trends

Upcoming Meetings
& Events

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 From the Expert:
Tumult on Wall Street Takes Toll on State Finances
By Sujit M. CanagaRetna, Senior Fiscal Analyst, CSG's Southern Office

The turmoil on Wall Street in the last few weeks continues to befuddle policymakers and citizens alike.  As the Bush Administration and members of Congress tussle with the details of the Emergency Economic Stabilization Act of 2008, including $700 billion to buy up the toxic assets of financial institutions, Americans across the country anxiously monitor their own perilous financial positions.  In the last few weeks, those of us who track fiscal trends at the state level remain concerned about the impact of all this turmoil on state finances.

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From the Expert:
States Step Up Mortgage Oversight

By Jennifer Burnett

There's no easy fix for the condition of the current housing market and the fallout from the mortgage meltdown. States and local communities expect to feel the effects for years. A flurry of federal legislation and programs--including the recently defeated bailout plan--contain provisions that will significantly impact the mortgage industry, especially with respect to foreclosure processing and lending oversight. States, however, already play an important role in the supervision and enforcement of mortgage regulations and will most likely continue to be the first line of defense against predatory, irresponsible and unscrupulous lending practices.  According to the National Governors Association, more than 30 states passed legislation since 2007 to ban predatory lending practices, strengthen lender oversight, regulate mortgage broker companies and loan originators, educate homebuyers and refinance mortgages.

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Trends Indicate a Good Election Year for Democrats

By Mary Branham Dusenberry, Managing Editor, State News

Democrats could be in for another good year if current election trends hold. Many are predicting Democrats to make gains, not only in Congress but also in state legislatures and governor's races as well.

Democrats hold a 28 to 22 advantage in the governor's offices across the country. The top spot is on the ballot in 11 states, and polls show Democrats with an edge in five of eight states where voters have been questioned, according to Thad Beyle, a professor of political science at the University of North Carolina at Chapel Hill.

On the legislative side, Democrats control both houses in 24 state legislatures, while Republicans control both houses in 16 states; the parties split control in nine states. Nebraska's legislature is unicameral and nonpartisan. But 553 of the 1,115 Senate seats and 2,571 of the 4,710 House seats up for grabs are held by Democratic legislators, some of them in states where the party holds narrow margins.

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