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[Page: E1467]  GPO's PDF
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• Ms. SCHAKOWSKY. Mr. Speaker, I rise in opposition to the conference report on H.R. 333 ``The Bankruptcy Abuse Prevention and Consumer Protection Act.'' This legislation puts the interests of politically powerful credit card companies ahead of the interests of seniors and working families. That is why this conference report is opposed by every major consumer rights organization, over twenty women's right organizations, and the AFL-CIO. This is flawed legislation that could not come at a worse time. I urge my colleagues to reject this conference report.

• Last year, a record 1.45 million people filed bankruptcy. Experts attribute this to deteriorating economic conditions and rising consumer debts. Research shows that nine in ten bankruptcies are triggered by the loss of a job, high medical bills or divorce. Yet this legislation would not allow a bankruptcy judge to take into account whether a debtor is blameless for his or her financial problem when decising whether the person can declare chapter 7 bankruptcy unless the debtor is a victim of terrorism. This will make it very difficult for consumers to escape debt.

• This legislation will have especially harsh impact on senior citizens and women. According to research by the Consumer Bankruptcy Project at Harvard University, seniors are the fastest growing group in bankruptcy. About 82,000 Americans over 65 years-of-age filed for bankruptcy in 2001, up 244 percent since 1991. We will put seniors at the mercy of price-gouging card companies.

• Women represent the single largest group in bankruptcy, with households headed by women accounting for about 40 percent of all bankruptcies today. This legislation will make it harder for them to escape debt and poverty by creating new types of ``nondischargeable'' credit card debts. The legislation puts banks in competition with women trying to collect child support from a former spouse after bankruptcy. Debtors will have to pay back more money in credit card debts after clearing bankruptcy, leaving less money for child support and alimony. Proponents of the conference report claim that this legislation gives top priority to women trying to collect child support when distributing assets in Chapter 7 cases. However, more than 90 percent of all chapter 7 debtors have no assets to distribute. They have no protection at all.

• Amazingly, this conference report expands the most egregious abuse of the bankruptcy system by expanding the scope of the luxury home loophole to all fifty states. In five states, a debtor can hide all their resources in their home. Unless a debtor is guilty of a very narrow range of fraud or felonies, is declaring bankruptcy within 40 months of buying a home or has moved in from another state in the last two years, the loophole remains. This legislation will allow debtors to export the unlimited homestead exemptions for two years. This means that corporate thieves like former Enron CEO Ken Lay can move to my district and escape paying investors and workers. Ken Lay comes from Texas. Texas is one of the five states that does not have a cap on their homestead exemption. At the same time a laid-off worker from a state like Delaware that does not have a homestead exemption will lose a home that has as little equity as $30,000. This is an outrageous double standard.

• This legislation is also noticeably silent when it comes to the role of credit card companies in increasing consumer debt and filed bankruptcies over the past decade. Credit card companies sent out five billion solicitations last year. Credit card companies target college students. College students lack independent means and have a high credit risk. Yet this legislation does not curb these practices in any significant way. Language to require responsible lending to college students has been severely weakened.

• Also this bill does nothing to curb the practices of predatory lenders, who will be able to collect debts regardless of how they deceived consumers. This bill allows most lenders to provide only a general statement on the credit card bill about the risks of paying at the minimum rate and a toll-free number. Most consumers will not receive information that details the long-term risk of accumulating credit card debt.

• This legislation lets wealthy debtors and credit card companies off the hook while it

  [Page: E1468]  GPO's PDF

  makes it more difficult for working families and laid off workers to make ends meet and avoid debt. Please join me in rejecting this anti-consumer conference report. This conference report is bad for consumers and it should be opposed.
  

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