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  • Thursday, March 10, 2005


    Bankruptcy Legislation, Part II

    I admit to having a bit of antipathy to Arianna Huffington. This comes from her past as a more conservative commentator. So I don't read her often, even when she's making good points. She makes a fairly concise summary of the problems with the current bankruptcy bill currently near passage in the Senate. From Open Fire on U.S. Consumers:

    So what does the bill do? It makes it harder for average people to file for bankruptcy protection; it makes it easier for landlords to evict a bankrupt tenant; it endangers child support payments by giving a wider array of creditors a shot at post-bankruptcy income; it allows millionaires to shield an unlimited amount of value in homes and asset protection trusts; it makes it more difficult for small businesses to reorganize, while opening new loopholes for the Enrons of the world; it allows creditors to provide misleading information; and it does nothing to reign in lending abuses that frequently turn manageable debt into unmanageable crises. Even in failure, ordinary Americans do not get a level playing field.

    Credit card companies have been feverishly lobbying for this legislation for nearly a decade – and it looks like the $34 million the finance and credit industries have contributed to political campaigns since 1996 is finally about to pay off. On Tuesday, the cloture vote on the bill was 69 to 31. The House passed similar legislation last year and GOP leaders are hoping to bypass the conference committee deadlocks that have derailed similar measures in the past and have the bill on President Bush's desk in short order. The president, well aware that credit card giant MBNA is one of the Republican Party's largest donors, has promised to sign the bill as soon as someone hands him a pen.

    Make no mistake, the inequitable nature of the bill – bending over backwards to help the credit card industry while sticking it to American working people who fall on hard times – is no accident. Time and again over the last week, the Senate shot down amendments that would have made the bill a bit less mean-spirited. They denied proposals that would have made it easier for military veterans, the sick and the elderly to qualify for bankruptcy protection. They even rejected an amendment that would have put a 30 percent ceiling on the interest rates credit card companies can charge. Thirty percent – that's more than Paulie Walnuts charges. But 74 U.S. senators – including John Kerry, Harry Reid, Barack Obama and Dick Durbin – clearly thought that wasn't high enough. Quick, somebody send those guys a Bible bookmarked to Deuteronomy 23:19: "Thou shalt not lend upon usury to thy brother."

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