Copyright 1999 The Buffalo News
The Buffalo News
April 24, 1999, Saturday, FINAL EDITION
SECTION: EDITORIAL PAGE, Pg. 2C
LENGTH: 474 words
HEADLINE:
BACKWARDS ON BANKRUPTCY
BODY:
Instead of
improving on the bankruptcy-reform bill that Congress justifiably failed to pass
last year, the Senate is moving in the opposite direction.
The bill it's
considering now would drop many of the most basic controls on an out-of-control
credit-card industry that contributes significantly to the U.S. personal
bankruptcy problem.
The way the bill is shaping up now, Sen. Charles
Schumer's poison-pill amendment -- to stop anti-abortion
lawbreakers from hiding behind bankruptcy to avoid court
judgments -- may not be such a bad idea. It could stop Congress from passing a
bill that does real harm to consumers while trying to please the credit
industry. But far better would be if the Senate simply returns to some basic
principles it recognized last year when voting 97-1 for a bankruptcy bill that
was far more balanced. That effort died when the Senate measure and a much-worse
House bill couldn't be reconciled before the end of the session.
This
year, the Senate has abandoned many of those principles, despite the fact that
the bill has bipartisan support. For instance, the new proposal drops "truth in
lending" provisions that would make credit-card bills spell out how long it
would take and what the total cost would be if a consumer makes only the minimum
payment each month. Many consumers have no idea how much they're being gouged
when they pay as little as possible on each bill.
The new bill also
omits a provision that would have prevented credit-card companies from dropping
consumers who pay off their balances in full each month to avoid interest costs.
Banks already make a fee on each transaction. They don't need the additional
power to punish people who are trying to hold down their debt and use credit
responsibly.
And other reforms that could help keep people out of debt
-- such as restrictions on marketing credit cards to teen-agers or others who
obviously can't pay, and more disclosure about "teaser" rates used to lure
consumers -also are missing.
Schumer's provision is prompted by the
outrageous efforts of anti-abortion lawbreakers like Randall
Terry, who filed for bankruptcy to avoid paying $ 1.6 million
in penalties to women's groups and abortion providers after
violating their rights during protests.
People should not be able to
avoid court-ordered judgments just by filing for bankruptcy
after they've broken the law. However, injecting abortion into the
bankruptcy debate is one sure way to kill any reform effort.
If
the Senate can restore the reforms in last year's bill and add a few new
protections, it would have a bill worth passing. Schumer would be unwise to hold
up such a measure with a divisive provision on abortion.
But given what
the Senate is crafting so far, it would be no great loss to anyone except the
banking industry if the effort goes down.
LOAD-DATE:
April 25, 1999 
