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Press Release September 23, 1998 |
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WASHINGTON - Unless the credit card industry's flawed bankruptcy bill locks
in workable protections for child support, addresses unfair and abusive credit
industry practices and provides a safety net for personal financial disasters,
President Clinton should get his veto pen ready, declared a coalition of
national consumer groups who are fighting to improve the current bill.
Consumers Union, publisher of Consumer Reports magazine, the Consumer
Federation of America and the National Consumer Law Center, on behalf of its low
income clients, are signaling the White House that trouble looms for the
bankruptcy bill which cleared the Senate today unless provisions in the Senate
bill are preserved and strengthened, and the radical reforms contained in the
House bankruptcy bill are left on the conference committee room floor.
"While the Senate made some positive changes, several vital efforts to reform
the irresponsible and relentless marketing practices of the credit card industry
fell far short of their mark," said Frank Torres, legislative counsel for
Consumers Union, who expressed disappointment that several pro-consumer
amendments were weakened or tabled. "There is still little balance here. Worse
yet: if the limited changes made in the Senate bill are stripped out in
conference American families who are down on their luck would really be left out
in the cold."
"The big corporate lenders are trying to make the bankruptcy court another
forum where debt collectors always come out on top -- even at the expense of
families in trouble," said Gary Klein, Director of the National Consumer Law
Center. "The bankruptcy system they have designed would be stripped of many
protections necessary to honest but unfortunate consumers facing financial
hardship due to circumstances beyond their control."
"Only the Senate bill has any protections for consumers, and it is unclear
whether those provisions are strong enough to prevent abusive marketing
practices prevalent in the extension of consumer credit," continued Klein. "The
House-approved measure would make bankruptcy nothing but a taxpayer-funded debt
collection agency. NCLC is opposed to both bills, but believes that the Senate
bill, with some additional changes, may provide a basis for compromise. The
House bill is mean-spirited, unbalanced, and a give-away of public funds to an
industry which is already making record profits."
"We are encouraged that the Senate's bankruptcy bill at least begins to
recognize the shared responsibility of the large credit card companies and
banks, " said Mary Rouleau, Legislative Director of the Consumer Federation.
"The Senate bill imposes fair and long-overdue regulations on the conduct of the
lending industry -- credit card issuers will be required to disclose that it
will take decades for consumers to pay off their debt if they make only minimum
payments, and that the total of payment will be many times the amount originally
borrowed."
