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Bankruptcy Bill from ABI
MessageHope everyone will see and read today's (Friday) LA Times front page article: "Credit Card Firms Won as Users Lost." Despite the increase in bankruptcy filings during the 90's, these companies increased their profits. How?
By expanding their customer base to poorer customers. They proceeded to charge higher rates and fees to these
folks, often making more than three times the original debt on defaults. "...the firms were helped by a 1996 Supreme Court case that gave credit card companies new protections against state regulation of fees." So now they need even more protections. Right! Carolyn
----- Original Message -----
To: cdcbaa@yahoogroups.com
Sent: Thursday, March 03, 2005 4:41 PM
Subject: [cdcbaa] Bankruptcy Bill from ABI
Senate Continues Debate; Next Week Eyed for Final Passage
The Senate on Thursday continued its often painfully slow process of considering amendments to the bankruptcy bill (S. 256), voting on six provisions. Dozens more are left for consideration into early next week, including a non-germane but anticipated Kennedy (D-Mass.) amendment to raise the minimum wage. The Senate will not schedule votes tomorrow.
Majority Leader Bill Frist (R-Tenn.) will likely file for cloture sometime early next week, after the Senate deals with several amendments already filed. On Monday, the Senate is expected to continue to debate and vote on amendments, including both the Kennedy wage amendment and a GOP alternative. The cloture motion could be filed during Tuesday's session. This motion would mature two days later. If 60 Senators vote in favor of the motion, further amendments would have to be germane to S. 256 and the total time for debate would be limited (and in no event could exceed 40 hours), clearing the way for a vote on final passage probably that same day.
Many of the issues considered today again dealt with lending industry practices. The bill's sponsors resisted amendments by a repeated plea to keep the bill "clean" of amendments, so as to ease passage by the House of Representatives. So far, this strategy has worked.
The Senate today defeated an amendment by Sen. Mark Dayton (D-Minn.) that would cap interest rates as a matter of federal law at 30 percent, pre-empting any state laws to the contrary. It was opposed on state law/federalism grounds. The vote was 24 in favor and 74 opposed.
The Senate defeated an amendment by Sen. Bill Nelson (D-Fla.) to exempt debtors from the bill's means test if their financial problems were "caused by identity theft." At least $20,000 in fraudulent claims would be necessary to invoke the exception. The vote was 37-61. Nelson pointed to FTC statistics that 10 million Americans were affected by identity theft last year, and is the most common fraud on consumers today. Recent cases involving both Bank of America and ChoicePoint were cited.
The Senate defeated an amendment by Sen. Dick Durbin (D-Ill.) that would bar a claim in bankruptcy by any creditor who had materially violated the Truth in Lending Act with respect to a home mortgage. Durbin said the amendment, which was defeated by only one vote when last offered, would address predatory lending. The amendment lost today by a vote of 40-58. It was opposed by members who argued that current federal law is sufficient to address predatory lending.
Perceived bankruptcy abuse by the wealthy and corporate debtors was another theme of today's amendments.
The Senate defeated an amendment by Sen. Charles Schumer (D-N.Y.) designed to address abuse of asset protection trusts, as described in a recent article in the New York Times. The amendment would have limited such trusts to $125,000 in assets. The vote was 39 in favor and 56 opposed.
The Senate defeated an amendment by Sen. Jay Rockefeller (D-W.Va.) that would have expanded the priority for wage claims and claims for contributions to employee benefit plans. The dollar limit, now at $4,925, would be expanded to $15,000 under the amendment, among other provisions. The amendment would have also expanded the right of employees to be paid retiree benefits in a bankruptcy. Critics argued the priority claims and expanded benefits provisions would make it much harder to get a plan of reorganization confirmed, since priority creditors must be paid in full under 1129 of the Code. The amendment was defeated by a vote of 40-54.
The Senate also defeated another Durbin amendment aimed at "corporate abuse" by insiders of bankrupt companies, allowing courts to look back four years at transactions such as loans to insiders, among other provisions. The amendment is inspired by self-dealing and fraudulent actions of executives at Enron, Worldcom and other corporate cases. Opponents argued that the issue is not a bankruptcy provision and is more appropriately considered by the Banking Committee. The vote was 40-54.
Coming amendments are expected to address issues of concern to the American Bar Association, including striking the requirement that consumer debtor counsel list themselves as "debt relief agencies" and another that would limit attorney liability for inaccurate debtor financial schedules.
Also coming is an amendment by Sen. Patrick Leahy (D-Vt.) to restrict access to certain personal information in bankruptcy documents. The amendment is supported by the Judicial Conference of the U.S. as consistent with recent changes to the Federal Rules of Bankruptcy Procedure, and may be accepted.
An amendment by Sen. Arlen Specter (R-Pa.), chairman of the Senate Judiciary Committee, was introduced but not acted upon during Thursday's session. The amendment is necessary to waive a budget point of order against the bill's authorization for funding 26 new bankruptcy judgeships and for other budgetary impacts. This amendment is likely to be accepted.
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Message
Hope everyone will see and read today's (Friday) LA
Times front page article: "Credit Card Firms Won as Users Lost." Despite the
increase in bankruptcy filings during the 90's, these companies increased their
profits. How?
By expanding their customer base to poorercustomers. They proceeded to charge higher rates and fees to these
folks, often making more than three times the
original debt on defaults. "...the firms were helped by a 1996 Supreme Court
case that gave credit card companies new protections against state regulation of
fees." So now they need even more protections. Right! Carolyn
----- Original Message -----
From:
David
A. Tilem
To: cdcbaa@yahoogroups.com
Sent: Thursday, March 03, 2005 4:41
PM
Subject: [cdcbaa] Bankruptcy Bill from
ABI
Senate Continues Debate; Next Week Eyed for Final Passage
The Senate on Thursday continued its often painfully slow process of
considering amendments to the bankruptcy bill (S. 256), voting on six
provisions. Dozens more are left for consideration into early next week, including a non-germane but anticipated Kennedy (DMass.) amendment to raise
the minimum wage. The Senate will not schedule votes tomorrow.
Majority Leader Bill Frist (RTenn.) will likely file for cloture sometime
early next week, after the Senate deals with several amendments already filed.
On Monday, the Senate is expected to continue to debate and vote on
amendments, including both the Kennedy wage amendment and a GOP alternative.
The cloture motion could be filed during Tuesdays session. This motion would
mature two days later. If 60 Senators vote in favor of the motion, further
amendments would have to be germane to S. 256 and the total time for debate
would be limited (and in no event could exceed 40 hours), clearing the way for
a vote on final passage probably that same day.
Many of the issues considered today again dealt with lending industry practices. The bills sponsors resisted amendments by a repeated plea to keep
the bill clean of amendments, so as to ease passage by the House of Representatives. So far, this strategy has worked.
The Senate today defeated an amendment by Sen. Mark Dayton (DMinn.) that
would cap interest rates as a matter of federal law at 30 percent, pre-empting
any state laws to the contrary. It was opposed on state law/federalism
grounds. The vote was 24 in favor and 74 opposed.
The Senate defeated an amendment by Sen. Bill Nelson (DFla.) to exempt
debtors from the bills means test if their financial problems were caused by
identity theft. At least $20,000 in fraudulent claims would be necessary to
invoke the exception. The vote was 3761. Nelson pointed to FTC statistics
that 10 million Americans were affected by identity theft last year, and is
the most common fraud on consumers today. Recent cases involving both Bank of
America and ChoicePoint were cited.
The Senate defeated an amendment by Sen. Dick Durbin (DIll.) that would
bar a claim in bankruptcy by any creditor who had materially violated the Truth in Lending Act with respect to a home mortgage. Durbin said the
amendment, which was defeated by only one vote when last offered, would
address predatory lending. The amendment lost today by a vote of 4058. It was
opposed by members who argued that current federal law is sufficient to
address predatory lending.
Perceived bankruptcy abuse by the wealthy and corporate debtors was another
theme of todays amendments.
The Senate defeated an amendment by Sen. Charles Schumer (DN.Y.) designed
to address abuse of asset protection trusts, as described in a recent article
in the New York Times. The amendment would have limited such trusts to $125,000 in assets. The vote was 39 in favor and 56 opposed.
The Senate defeated an amendment by Sen. Jay Rockefeller (DW.Va.) that
would have expanded the priority for wage claims and claims for contributions
to employee benefit plans. The dollar limit, now at $4,925, would be expanded
to $15,000 under the amendment, among other provisions. The amendment would
have also expanded the right of employees to be paid retiree benefits in a
bankruptcy. Critics argued the priority claims and expanded benefits
provisions would make it much harder to get a plan of reorganization
confirmed, since priority creditors must be paid in full under 1129 of the
Code. The amendment was defeated by a vote of 4054.
The Senate also defeated another Durbin amendment aimed at corporate
abuse by insiders of bankrupt companies, allowing courts to look back four
years at transactions such as loans to insiders, among other provisions. The
amendment is inspired by self-dealing and fraudulent actions of executives at
Enron, Worldcom and other corporate cases. Opponents argued that the issue is
not a bankruptcy provision and is more appropriately considered by the Banking
Committee. The vote was 4054.
Coming amendments are expected to address issues of concern to the American
Bar Association, including striking the requirement that consumer debtor counsel list themselves as debt relief agencies and another that would limit
attorney liability for inaccurate debtor financial schedules.
Also coming is an amendment by Sen. Patrick Leahy (DVt.) to restrict
access to certain personal information in bankruptcy documents. The amendment
is supported by the Judicial Conference of the U.S. as consistent with recent
changes to the Federal Rules of Bankruptcy Procedure, and may be accepted.
An amendment by Sen. Arlen Specter (RPa.), chairman of the Senate
Judiciary Committee, was introduced but not acted upon during Thursdays
session. The amendment is necessary to waive a budget point of order against
the bills authorization for funding 26 new bankruptcy judgeships and for
other budgetary impacts. This amendment is likely to be
accepted.
The post was migrated from Yahoo.