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May 5, 1999
The Honorable Jerrold Nadler
The Honorable Marty Meehan
The Honorable
Howard Berman
The Honorable John Conyers
United States House of
Representatives
Washington, DC 2051
Dear Representatives Nadler, Conyers, Meehan, and Berman:
The Consumer Federation of America, Consumers Union, the National Consumer
Law Center, and the U.S. Public Interest Research Group support the
Nadler/Conyers/Meehan/Berman substitute to H.R. 833. We strongly urge members to
take the following actions:
· Vote for Nadler/Conyers/Meehan/Berman substitute over the Gekas bill. The substitute creates an appropriate test and judicial discretion to determine whether American families can afford to pay their creditors;
· Vote for the Hyde/Conyers amendment. This would create reasonable flexibility for means testing bankruptcy by keeping rigid IRS collection standards out of the bankruptcy system;
· Vote against the Moran/Ackerman/Dooley consumer credit amendment. The amendment appears to be an effort by the credit industry to forestall meaningful consumer credit reform.
· Should the substitute fail, we urge members to vote against H.R. 833.
The substitute, like the Gekas bill, would help to curb abusive bankruptcy
filings. It includes a workable means test that would require debtors that can
afford to pay part of their debts to make those payments. Unlike the Gekas bill,
the substitute provides limited judicial discretion to prevent irrational
results and extreme hardship.
At the same time, the substitute does not contain many of the provisions of
the Gekas bill that would severely undermine the bankruptcy system as a whole --
provisions in the Gekas bill that would give free reign to creditors to file a
multitude of motions to force debtors out of bankruptcy, inhibit debtors from
obtaining legal counsel, and give a green light to the credit industry to
continue their abusive practices.
Members now have a choice between balanced, fair and honest reform and an
effort crafted by the credit industry -- an industry that contributes to the
number of bankruptcy filings by engaging in practices that confuse
consumers.
We urge members to vote for the Hyde-Conyers amendment in order to keep the
IRS from setting inflexible collection standards to govern consumer bankruptcy.
Instead of the IRS standard, the amendment would use a standard developed by the
U.S. Trustees which is adapted to the needs of the bankruptcy system. This would
prevent the IRS, a creditor in many bankruptcy cases, from exercising its
conflict of interest in favor of standards that would inappropriately keep
honest debtors out of bankruptcy.
We are also urging members to vote against the Moran/Dooley/Ackerman
amendment to the Truth in Lending Act. The changes proposed in this amendment
are a sham and would confuse consumers about the true cost of their credit.
These provisions appear to be an effort to forestall more meaningful disclosure
terms for credit cards contained in House and Senate legislation including the
Nadler\Conyers\Meehan\Berman substitute and a reform bill (H.R. 900) that is
pending in the House. Balanced bankruptcy reform requires that creditors give
consumers information necessary to make good decisions about credit choices that
may lead to financial problems. The Moran/Dooley/Ackerman amendment would not
perform this function.
|
Steven Brobeck |
Gary Klein |
