[Congressional Record Volume 145, Number 123 (Tuesday, September 21, 1999)]
[Senate]
[Pages S11094-S11096]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     BANKRUPTCY REFORM ACT OF 1999

  The PRESIDING OFFICER. The Senator from Vermont is recognized.
  Mr. LEAHY. Mr. President, what is the time situation? I thank the 
Senator from North Dakota for yielding.
  The PRESIDING OFFICER. The minority has 12 minutes and 38 seconds 
remaining.
  Mr. LEAHY. So the Senator from North Dakota was speaking on my time?
  Mr. DORGAN. I was speaking in morning business.
  Mr. LEAHY. No, I think the Senator from North Dakota had assumed he 
was speaking in morning business. I ask unanimous consent the time he 
was using was as in morning business and that I be given the full time 
I had available at the time he began speaking.
  Mr. DORGAN. Mr. President, if I might inquire, I had sought consent 
to speak for 10 minutes as if in morning business.
  The PRESIDING OFFICER. The Senator is correct. The Senator spoke 
under morning business.
  The Senate was in a period of morning business. The Senate was not on 
the bill, and the time until 5:30 is controlled.
  The Senator from Vermont is recognized.
  Mr. LEAHY. Mr. President, I ask unanimous consent that I have 15 
minutes.
  The PRESIDING OFFICER. Acting in my independent capacity as a Senator 
from Kansas, I object.
  Mr. LEAHY. So the Senator from North Dakota effectively used my time? 
Is that what the Presiding Officer is saying?
  The PRESIDING OFFICER. The Senator is correct.
  Mr. LEAHY. I understand.

[[Page S11095]]

  Mr. President, I was on the floor last week when the majority leader 
brought up S. 625, the Bankruptcy Reform Act of 1999, but then he 
immediately filed for cloture on the bill. I was rather surprised by 
the action, since, on behalf of the Democratic leader, I did not object 
to proceeding to the bankruptcy bill. Indeed, my side of the aisle was 
ready for a reasonable and fair debate on passing bankruptcy reform 
legislation. But when you file for cloture within seconds of bringing 
the bankruptcy reform bill up for debate on the Senate floor, that is 
not reasonable or fair. A cloture motion is for the express purpose to 
bring to a close debate but this was saying we will bring to close the 
debate before we even have the debate. It is as if we were in Alice in 
Wonderland. Cloture first, then debate.
  Mr. President, every American agrees with the basic principle that 
debts should be repaid. The vast majority of Americans are able to meet 
their obligations. But, for those who fall on financial hard times, 
bankruptcy should be available in a fair and balanced way.
  Our country's founders felt this principle was so important that it 
should be enshrined in the Constitution.
  Article I, section 8 of the Constitution explicitly grants Congress 
power to establish uniform laws on the subject of bankruptcies 
throughout the United States.
  We in Congress have a constitutional responsibility to oversee our 
nation's bankruptcy laws. The Senate should now take that 
constitutional responsibility seriously.

  Unfortunately, this premature cloture motion to cut off debate before 
it even started on this bill is not a serious effort.
  If we are going to respect the fact we are dealing with a 
constitutional issue here we should not start off the debate by 
stopping the debate. We know there is a rise in bankruptcies and people 
are abusing the system. Fine, let's close any loopholes in the 
bankruptcy code. But there are some other issues we should look at. 
What about credit cards? Last year we had a very balanced reform bill 
which passed 97 to 1 in the Senate. We had consumer credit card reforms 
in that bipartisan bill. Now we do not any consumer credit card reforms 
in this bill before us today. Should we not have some debate on whether 
we should get those reforms back in this bill to add balance to any 
reform measure?
  As the Department of Justice stated in its written views on this 
bill: The challenge posed by the unprecedented level of bankruptcy 
filings requires us to ask for greater responsibility from both debtors 
and creditors. Credit card companies must give consumers more and 
better information so that they can understand and better manage their 
debts.
  The Administration has made it clear that for the President to sign 
bankruptcy reform legislation into law it must contain strong consumer 
credit disclosure and protection provisions. I wholeheartedly agree.
  The credit card industry must shoulder some responsibility for the 
nationwide rise in personal bankruptcy filings. Last year, the credit 
card lenders sent out 3.4 billion solicitations. That is more than 12 
credit card solicitations a year for every man, woman and child in 
America.
  I have an example of one of these credit card solicitations. Let me 
show you what happens in some of these credit card solicitation. Here 
is one for a Titanium Visa card. It was passed out after the movie: 
``Austin Powers: The Spy Who Shagged Me.'' You get some kid coming out, 
he's handed this, it's ``titanium, baby.'' They will give one for you 
and one for Mini-me, I guess, at the movie theater. It calls its credit 
card ``titanium, baby.'' It has an introductory rate of only 2.9 
percent. How could any 13-year-old coming out of that movie not want 
that great credit card?
  Besides, it comes in three versions. Especially attractive to the 10-
year-olds who might be getting one of these credit cards: ``Groovy 
Flowers,'' ``Shagadelie Swirls,'' and, of course, for their older 
siblings who might be 16 or 17, and more staid, you have 
``Traditional.''
  The next chart shows the second page of this credit card 
solicitation. They are now called, I can't quite do it like Austin 
Powers, but they are ``smashing baby.'' But then look at the small 
print: ``2.9 percent introductory,'' you teenagers, you cannot do 
better. Of course that's available only for the 5 billing cycles. Then 
the interest rate goes to 10.99 percent. Getting awful close to 11 
percent. However, that is not quite the full story. You have an annual 
interest rate for cash advances that is 19.99 percent.
  We are now up to 20 percent. Oh, no, wait. There is another little 
insy-binsy-winsy-tiny print in this solicitation. That is, if you have 
two late payments during any 6-month period, whoops, you are up to 
22.99 percent.
  Can you imagine, as the kids get these Austin Powers credit card 
applications as they are walking out of the theaters for 2.9 percent, 
all of a sudden they are up to 22.99 percent?
  It is not all bad, and I want to speak in favor of the credit card 
companies. Most people seeing this would figure they are really out to 
shaft you; they are taking advantage of you; they are being unfair to 
you; they are being usurious; they are being greedy; they are being 
mean; they are being sneaky; they are trying to loop these people in. I 
know most people say that about the credit card companies, but I want 
to be fair to them because if you apply for this, you get the chance to 
receive two free tickets to the movie, one medium popcorn, and two 
small drinks.
  I hope Senators who thought, because these credit card companies were 
deceiving these teenagers into something to give them a 22.9-percent 
rate, those credit card companies were being mean feel badly about 
that. After all, you forgot about the medium popcorn and the two small 
drinks and the two free movie tickets.
  There are billions of credit card solicitations like this sent to 
Americans every year, and that has increased the number of personal 
bankruptcies. If cloture is invoked, then the Senate will be prevented 
from adding any credit industry reforms to this bill because the 
amendments will not be germane. That is not a reasonable or fair.
  Senator Torricelli and Senator Grassley negotiated with the credit 
card industry to craft a managers' amendment that incorporates many of 
the credit industry reforms proposed by Senators Schumer, Reed, Dodd, 
Sarbanes, and others. It is a bipartisan effort, and I commend them. I 
am pleased to cosponsor this amendment to add more balance to the bill. 
But we cannot even hear about this bipartisan effort if we invoke 
cloture.
  Senator Kennedy plans to offer an amendment to increase the minimum 
wage over the next 2 years from $5.15 to $6.15 an hour. I am proud to 
be a cosponsor of that amendment. Maybe if we had a decent minimum wage 
we would have a lot less bankruptcies. It is more than appropriate to 
help working men and woman earn a livable wage on a bill related to 
bankruptcy.
  These minimum wage workers are some of the same Americans who are 
struggling to make a living everyday and might be forced into 
bankruptcy by a job loss, divorce or other unexpected economic event. 
More than 11 million workers will get a pay raise as a result of a $1 
increase in the minimum wage. We should all agree to help millions of 
hard working American families live in dignity.
  But the Senate would be prevented from considering any amendment to 
raise the minimum wage if cloture is invoked on this bill now--on the 
first day of debate on bankruptcy reform. That is not reasonable or 
fair.
  As we move forward with reforms that are appropriate to eliminate 
abuses in the system, we need to remember the people who use the 
system, both the debtor and the creditor. We need to balance the 
interests of creditors with those of middle class Americans who need 
the opportunity to resolve overwhelming financial burdens.

  I welcome Senator Torricelli, the new Ranking Member of the 
Administrative Oversight and the Courts Subcommittee, to the challenges 
this matter presents. I know that he and his staff have been working 
hard and in good faith to improve this bill.
  As the last Congress proved, there are many competing interests in 
the bankruptcy reform debate that make it difficult to enact a balanced 
and bipartisan bill into law. Unfortunately, Congress failed to meet 
that challenge last year after the Senate had crafted a bill that 
passed 97-1.
  I look back to what Senator Durbin did, with heroic efforts, last 
year in

[[Page S11096]]

crafting a bill that passed 97-1, and then it fell apart in a partisan 
conference. This is not a matter that should be partisan. Every one of 
our States has people who are facing bankruptcy. Every one of our 
States has the kind of shoddy practices shown here where we have these 
credit card applications passed out to kids coming out of a movie. They 
are almost designed to get them to go from this 2.9 percent interest to 
23 percent interest as fast as they possibly can.
  But if we are going to go into bankruptcy reform, let's do it right. 
I think we should. I worked hard in the Judiciary Committee on this 
bipartisan bill. Let's do it in a way that we look at all aspects of 
it, and let's ask some of the credit card companies and others if they 
are not doing as much to create the problem as anybody else.
  I can give a lot of other examples. I could show you a member of my 
office whose 6-year-old son received a preapproved credit application 
for $50,000. All he had to do was sign it. I do not know about kids 
today, but when I was 6 years old, if I had a credit card with $50,000 
worth of credit in my pocket, I could have thought of a lot of things I 
would have liked to have bought.
  This may not be the spy that shagged us; it may well be the credit 
card companies that shagged the Senate. We ought to pay attention to 
the fact that when they are asking kids to pay 22.99 percent interest, 
there is more than one reason why we have bankruptcies in this country.
  I am hopeful that this year Republicans and Democrats in the Senate 
can work together to pass and enact into law balanced legislation that 
corrects the abuses by both debtors and creditors in the bankruptcy 
system.
  But this partisan attempt to prematurely cut off debate before we 
even started to consider this bill does not bode well for that effort.
  I hope that once this cloture motion is defeated, the Senate will 
begin a reasonable and fair debate on bankruptcy reform legislation 
that reflects a balancing of rights between debtors and creditors.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The distinguished majority leader is 
recognized.

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