Press Release May 6, 1999	Contact:, 202-462-6262 Frank Torres, mailto:orrfr@consumer.org Consumers Union Washington, DC Office

Consumers Battle for Fair Bankruptcy Rules
Moves to the Senate

Consumers Union today called on the Senate to protect consumers from bankruptcy "reform" legislation passed last night by the House of Representatives. The measure gives the credit industry unprecedented power over credit card holders, stripping away the few rights now held by those who have trouble with their credit cards.

"Despite all the rhetoric, there are no real protections for consumers in the House-approved bill. The Senate must add amendments to its bankruptcy reform proposal that guarantee basic consumer rights," said Frank Torres, legislative counsel for Consumers Union, publisher of Consumer Reports. "The House has elected to protect the profits of the credit industry at the expense of hard working families."

Torres called on the Senate to add the basic consumer protections missing from the House legislation to its bill or drop bankruptcy reform altogether. If legislation passes Congress that does not contain consumer protections, Torres called on the President to make good on his veto threat.

"No legislation is better than the so-called bankruptcy reform passed by the House," Torres said.

The basic consumer protections sought by Consumers Union include:

· Clear disclosure when a short-term low-interest "teaser" rate is used to entice a consumer to sign up for a credit card.
· Requiring credit card companies to give consumers information on how long it would take them individually, and how much it would cost, to pay off their current balance by making only the minimum payments.
· Protections for consumers who pay off their balance in full every month.
· Sanctions for overly aggressive collection efforts that force people into bankruptcy, such as a creditor refusing a responsible debt management plan.
· Assurances that any profits generated by tightening the bankruptcy law are passed on to consumers.
· Protections for minor who are targeted by the credit industry.

"By adding these amendments, Senators could create legislation that is balanced, fair and honest reform rather than simply approve legislation crafted by the credit industry," Torres said.