Copyright 2002 San Antonio Express-News San Antonio
Express-News (Texas)
May 16, 2002, Thursday , METRO
SECTION: BUSINESS; Pg. 1E
LENGTH: 641 words
HEADLINE:
Abortion amendment may sink key bankruptcy reform bill
BYLINE: David Hendricks
BODY: Only in Washington could abortion
become an issue in a bankruptcy reform bill.
It's there, all right. Abortion may stall the bankruptcy bill that has
been a back-and-forth badminton in the halls of Congress for almost 11/2 years.
If abortion kills the bill, that would be bad
news for the lending industry and half-good and half-bad for consumers.
The bill has been in a House-Senate conference
committee since last year, when each chamber passed separate bankruptcy reform
bills.
On April 23, the conference committee
agreed to a $125,000 home equity protection limit in cases where bankruptcy
filers have committed fraud or other criminal acts, including securities
violations, or is subject to criminal charges.
The committee did this out of anger about former Enron Corp. executives
in Texas who are sheltering their multimillion-dollar homes from possible
liabilities stemming from the company's collapse, according to the Consumer
Bankers Association's CBA Reports newsletter.
Texas and Florida are among five states that allow an unlimited
exemption for home equity. Any new federal law would supersede state laws.
The conference committee also agreed to require
debtors to meet a residency requirement of 30 months before filing for
bankruptcy in such states. That would prevent someone from buying a home on the
way to bankruptcy court.
Left unresolved,
though, at April 23 and April 30 conference committee meetings was an amendment
by Sen. Charles Schumer, D-N.Y., that would prevent anyone convicted of abortion
clinic violence from using bankruptcy to avoid paying fines.
That does not happen very often, but abortion is such
emotional issue that members of Congress want to avoid voting on any measure
mentioning abortion during an election year because opponents will use it
against them.
Committee Chairman Rep. F. James
Sensenbrenner Jr., R-Wis., has set another conference committee meeting for
Monday. If the abortion clinic issue is not resolved, the bill is in trouble for
the rest of year, said Travis Plunkett, legislative director for the Consumer
Federation of America.
After the Memorial Day
break, Plunkett said, Congress will face numerous other bills, and members will
be more entrenched in their positions on bankruptcy reform.
Plunkett believes something close to the current bill will
be approved eventually. When? "Your guess is as good as mine," he said.
The lending industry has been pushing for this
reform for years. Most Americans, polls indicate, agree that debtors can escape
their debts too easily, raising the cost of credit for everyone.
Unfortunately, the bankruptcy reform bill does virtually
nothing to make credit companies more careful how they extend credit and who
gets it.
"There are no restraints on lenders,"
Plunkett said.
A proposal to stop lenders from
promoting credit cards to college students with no credit history failed, as did
another that would allow debtors with high-cost predatory mortgage loans from
discharging that debt.
"This is not real
reform," Plunkett said. "The bill puts harsh restraints on people who are not
abusing the law."
Plunkett acknowledges that
bankruptcy numbers have been high recently, but says that's because of rising
jobless rates and cutbacks in employer health benefits.
Plunkett further cited economists who believe the current bankruptcy
law has been a restraint on aggressive lending practices, and that lenders will
become even more reckless if the reform bill passes.
Abortion may or may not sink the pending bankruptcy reform bill. Either
way, the electorate must press for a consumer-oriented balance in a new
legislation after this bill becomes law, or in new bill later if this one fails.
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