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   The amendment is as follows:

    At the end of subtitle A of title II, add the following:

[Page: S1945]  GPO's PDF

   SEC. 204. DISCOURAGING PREDATORY LENDING PRACTICES.

    Section 502(b) of title 11, United States Code, is amended--

    (1) in paragraph (8), by striking ``or'' at the end;

    (2) in paragraph (9), by striking the period at the end and inserting ``; or''; and

    (3) by adding at the end the following:

    ``(10) the claim is based on a secured debt, if the creditor has failed to comply with any applicable requirement under subsection (a), (b), (c), (d), (e), (f), (g), (h), or (i) of section 129 of the Truth in Lending Act (15 U.S.C. 1639).''.

   Mr. DURBIN. Mr. President, I represent to Members of the Senate that my description of this amendment is very simple. Senator Grassley is on the floor, and I can say his hearings before the Select Committee on Aging regarding predatory lending have inspired us to offer this amendment. Some of the statements he made during the course of those hearings about the abuses of predatory lending and the victims across America have led us to offer an amendment on the floor of the Senate to the bankruptcy bill to say these people who are taking advantage of otherwise good citizens should not be allowed the protection of the bankruptcy court. If they violate the law in creating this debt, they shouldn't be able to hide behind the bankruptcy law when they go to court.

   I hope even my friends in this Chamber who feel very strongly about the credit and financial industry, during the course of the consideration of this debate on this amendment, will at least find some sympathy and understanding for people such as those I have described--good, hard-working Americans living in retirement who have been victimized by people engaged in illegal practices. I hope we can adopt this amendment as part of the reform of our bankruptcy system to keep in mind some of the victims of the credit system from some of the worst perpetrators.

   I yield the floor.

   Mr. HATCH. Mr. President, I ask unanimous consent that the Senate resume consideration of the pending Leahy amendment No. 13 at 5:30 pm and there be up to 20 minutes equally divided in the usual form.

   I further ask consent that at the conclusion of this debate, the amendment once again be laid aside and the Senate resume consideration of the Wellstone amendment No. 14 and there be up to 60 minutes equally divided in the usual form.

   I further ask consent that at the conclusion of the debate on the Wellstone amendment, the Senate proceed to vote in a stacked sequence on or in relation to the Wellstone amendment, to be followed by a vote on or in relation to the Leahy amendment, and that no amendments be in order to either amendment.

   Further, I ask that there be 2 minutes equally divided for closing remarks prior to the second vote in the series.

   The PRESIDING OFFICER. Without objection, it is so ordered.

   Mr. HATCH. As a result of this agreement, at least two back-to-back votes will occur at 6:50 this evening. So I put all colleagues on notice that we will have at least two back-to-back votes.

   AMENDMENT NO. 17

   Mr. President, as I understand it, the amendment of the distinguished Senator from Illinois, the predatory lending amendment, takes away the lender's right to satisfy a claim to get paid on the debtor's bankruptcy if there was any ``material'' Home Ownership Equity Protection Act violation. The Home Ownership Equity Protection Act is not a predatory lending law. Any attempt to characterize it as such is misleading and inflammatory.

   Many legitimate lenders--banks, community banks, and finance companies--make home equity loans which fall under this act, codified section 129 in the Truth in Lending Act. Section 129 recognizes a legitimate sector of the home lending market, certainly one that is not ``predatory'' and already provides ample protection for consumers, both in the form of disclosures and substantive prohibitions and remedies for violations of this act.

   First, this is a banking amendment. This is outside the jurisdiction of this committee. Second, and more importantly, this amendment is problematic in its effect in a number of ways. For instance, it will adversely affect the availability of credit to certain consumers, many of whom may be low income and minorities whom this amendment purports to protect. Moreover, the secondary markup for such mortgages will also be affected, thereby placing upward pressure on the pricing of such loans.

   A number of the horror stories given are already covered by current law, and we should be enforcing those laws.

   It appears this amendment, though seemingly well meaning, might create more problems than it might remotely solve. Already there are numerous protections and built-in

   super-remedies afforded the borrowers under the Homeownership and Equity Protection Act. For example, a consumer can rescind any loan that violates the provision. This alone takes care of any conceivable problem in bankruptcy. Furthermore, all material violations result in civil liability under the Home Ownership Equity Protection Act and enhance civil remedies such as ``an amount equal to the sum of all finance charges and fees paid by the consumer, unless the creditor demonstrates that the failure to comply is not material,'' in addition to actual damages, statutory damages, attorney's fees, and costs.

   Furthermore, to justify the harsh punishment it creates, in addition to those penalties already available in the Home Ownership Equity Protection Act, this amendment does not even require any finding that such a violation was the cause of the debtor going into bankruptcy.

   That is not good law. That is not the way we should be making law. Nor does it require that a violation of the Home Ownership Equity Protection Act had to have been found for this draconian remedy to take place.

   The result, I am afraid, will be litigation within a bankruptcy proceeding and a bankruptcy judge passing judgment on Federal lending laws. Furthermore, I don't know why every debtor will not allege a violation of the Home Ownership Equity Protection Act in the hopes of winning this lottery of getting your home mortgage wiped out for even minor violations which did not contribute in any way to the bankruptcy of the debtor.

   This is just plain bad policy. We can't permit this type of an amendment on this bill. It is one thing to use rhetoric about predatory lenders, but I believe the current law takes care of that, and, frankly, I don't think we should try to disturb it with an amendment that doesn't do the job and, in fact, can do an awful lot of harm.

   We have to oppose the sincere amendment of the distinguished Senator. I hope our colleagues will vote it down. It would cause tremendous problems.

   Last, but not least, I know my colleague is not trying to do this--or at least I believe he is not trying to do this--but this would lead to all kinds of unnecessary litigation, unnecessary failures, to be able to resolve problems as they arise and, frankly, fly in the face of good bankruptcy legislation.

   I think the bill and current law in the bill, combined, do take care of some of the problems about which the distinguished Senator is concerned. But his amendment would cause an awful lot of problems. In the end I think all it would do is lend a lot of solace to a lot of lawyers who want to make a lot of money off what clearly are not reasons for the bankruptcy.

   We have to oppose this amendment.

   I yield the floor.

   The PRESIDING OFFICER. The Senator from Illinois.

   Mr. DURBIN. I briefly respond to say to my friend from Utah, keep in mind the people you are protecting by opposing this amendment. Keep in mind the institutions which you are trying to protect by opposing this amendment.

   These are people who are preying on our parents and grandparents, living in their retirement, subjected to loan terms and conditions that are outrageous by any moral standard.

   We are saying is, after they have perpetrated these frauds to the public, after they have literally threatened to take away a home from a retired person with a loan that is unconscionable and violates the law, we want them to have free rein in bankruptcy court to pursue their claim.

   I don't think that is right. Why in the world is this Senate spending its good time and the money of taxpayers on hearings involving predatory lending , coming up with all of these wonderful speeches about how terrible these people are, and when we have a chance in the bankruptcy law to finally do something to stop these awful

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   All of the moral indignation we were able to muster in these committee hearings about the outrageous examples of what is happening to senior citizens and low-income people, we forget as soon as we come to the floor and start talking about a bankruptcy law.

   I don't care about committee jurisdiction. That may be an issue to some; it is not to me. I am more concerned about the people who expect bankruptcy code reform to be sensitive to borrowers as well as lenders. I hope my colleagues in the Senate will support my amendment.

   I yield the floor.

   The PRESIDING OFFICER. The Senator from Florida.

   Mr. HATCH. Will the Senator from Florida yield for one last comment?

   The PRESIDING OFFICER. The Senator from Utah.

   Mr. HATCH. Mr. President, when we had this amendment in the committee, it had to be a substantive violation. The current amendment, as we view it, would provide for triggering with even a technical violation. That would be catastrophic in bankruptcy law. We just cannot support this amendment.

   I know the distinguished Senator is trying to do something worthwhile, and I do not believe there should be predatory lending any more than he does, but I do think we take care of it in this bill. But under this current amendment, it is even worse than the amendment he was prepared to offer in committee because even a technical violation would trigger what he wants to do. So I just need to make that point for the record, and I am happy to yield the floor.

   The PRESIDING OFFICER. The Senator from Florida.

   Mr. GRAHAM. Mr. President, I ask unanimous consent to proceed as in morning business.

   The PRESIDING OFFICER. Without objection, it is so ordered.

   Mr. GRAHAM. Mr. President, I ask, immediately upon the completion of my remarks, my colleague, Senator Corzine, be recognized.

   Mr. HATCH. Reserving the right to object, I ask Senators how much time they intend to take?

   Mr. GRAHAM. We will take approximately 15 minutes apiece.

   Mr. HATCH. I have no objection.

   The PRESIDING OFFICER. The Senator from Florida is recognized.

   Mr. GRAHAM. I thank the Chair.

   (The remarks of Mr. GRAHAM and Mr. CORZINE pertaining to the introduction of S. 481 are located in today's RECORD under ``Statements on Introduced Bills and Joint Resolutions.'')

   Mr. HATCH. Mr. President, I suggest the absence of a quorum.

   The PRESIDING OFFICER. The clerk will call the roll.

   The assistant legislative clerk proceeded to call the roll.

   Mr. LEAHY. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

   The PRESIDING OFFICER. Without objection, it is so ordered.

   AMENDMENT NO. 17, AS MODIFIED

   Mr. LEAHY. Mr. President, I send to the desk a modification of the amendment by the Senator from Illinois, Senator Durbin. I am advised that this modification has been cleared with Senator HATCH and his side.

   The PRESIDING OFFICER. The amendment is so modified.

   The amendment, as modified, reads as follows:

    At the end of subtitle A of title II, add the following:

   SEC. 204. DISCOURAGING PREDATORY LENDING PRACTICES.

    Section 502(b) of title 11, United States Code, is amended--

    (1) in paragraph (8), by striking ``or'' at the end;

    (2) in paragraph (9), by striking the period at the end and inserting ``; or''; and

    (3) by adding at the end the following:

    ``(10) the claim is based on a secured debt, if the creditor has materially failed to comply with any applicable requirement under subsection (a), (b), (c), (d), (e), (f), (g), (h), or (i) of section 129 of the Truth in Lending Act (15 U.S.C. 1639).''.

   Mr. LEAHY. Mr. President, I know we are waiting for other Members to come to the floor. It is interesting. I have listened to the outpouring of grief following the tragic events in Southern California, the shooting in the high school. As a parent, I obviously look at that and can only begin to imagine the terror that was in the hearts of the parents of all the children there--not knowing from the initial reports whether their child was alive or injured. And then, of course, it had to be the worst grief any parent could feel to find out their children had been killed.

   I could not help but think of my own son, who teaches high school in that area. But one has to think of anybody, whether they know them, are related to them or not, in such a case because the whole country is involved. It is almost a John Donne reference in this case, and I think of this body having intense debate a couple of years ago after the tragedy at Columbine. It was actually one of our better debates. We discussed--both Republicans and Democrats--the fact that there are a number of different causes--no one magic thing, no one cause that sends a young person out to do such a terrible, almost inexplicable deed; and in each of these instances when they have happened, and in those instances where the police have caught somebody prior to it happening, there is not a common denominator.

   If there was some matrix that you could apply to each one of these, it would be, I suppose, easy enough to stop them. But there isn't. It is not just a question of stricter laws, not just a question of more teachers, not just a question of more security; it is not just a question of gun laws. But there are parts of each of those. What was so good about the debate on the juvenile justice bill, which became the Hatch-Leahy juvenile justice bill, is that we referred to each aspect and we debated and voted on everything from counseling for juveniles to stricter laws on juveniles, closing the gun show loophole, providing tools for teachers and communities. We passed the bill by overwhelming margin. It got 73 votes. I think we can all feel that we had done something for the country.

   But the bill never came back. It was never voted on again. It went into a conference committee and never came out. There was never a vote there. Yet I wonder, if you are a parent, and you see a child killed, and you think that at least some things could be done to stop this from happening somewhere else, if you would not think that would be a top priority. We obviously thought it was at a time when this Senate was probably embroiled in the most partisan divisions that I have seen in 25 years. You would think that it would because we had 73 votes. This was a case where Democrats, Republicans, liberals, and conservatives, came together and we passed this bill.

   But then a decision was made somewhere, and it never came back. It was never voted on again and was never signed into law because the Congress decided never to act on it again. It was a hollow promise to the parents and the teachers and the children of America. We lost any sense of urgency on this bill that got 73 votes.

   But we passed the bankruptcy law--a flawed bankruptcy law, in my view--last year. That got 70 votes, less votes than juvenile justice and, by God, we have to bring it right back up here again--not because the owners of the credit card companies are being shot at or their children are being shot at, not because they are all going out of business. In fact, they have record profits and will have greater ones under this bill

   because the commercial interests have been heard rather than the interests of parents, children, and teachers.

   I mention this in passing. I know there are others on the floor seeking recognition, and I will yield in a moment.

   If the Senate is to be the conscience of this Nation, don't we have to sometimes ask ourselves what are our priorities? How can any parent, how can any Senator, how can any American, with the carnage in our schools or on our streets, look at some of the terrible things happening with our youth and ask, Why are we in such a hurry to pass a piece of commercial special interest legislation and we cannot bring ourselves to take the final step across the finish line on the juvenile justice bill?

   I cannot accept that, and, frankly, it is not that sense of priority that brought me from my State of Vermont to serve in the Senate.

   I yield the floor.

   The PRESIDING OFFICER. The Senator from Wisconsin.

   Mr. FEINGOLD. Mr. President, today we are debating an extremely complicated and extremely important piece of legislation, the bankruptcy reform

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   Supporters of the bill have put enormous pressure on the Congress to act quickly and pass the bill again because President Bush has indicated he will sign it. The majority wanted to bring the bill directly to the floor without going through committee, notwithstanding the fact that we have a very different Senate after the last election. We had to fight for every moment of committee consideration. We did succeed in convincing the majority that the Judiciary Committee should consider the bill in committee. We had a quick hearing, and a markup, and I think the bill was improved in the process. Then, the same day that we voted the bill out of committee, the majority leader sought consent to bring the bill up on the floor. I am sorry this rush to judgment is happening. I believe this bill is bad policy, and I believe we will come to regret passing it.

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