[Congressional Record Volume 148, Number 105 (Monday, July 29, 2002)]
[Extensions of Remarks]
[Page E1467]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   OPPOSITION TO THE CONFERENCE REPORT ON THE BANKRUPTCY REFORM BILL

                                 ______
                                 

                          HON. JOHN D. DINGELL

                              of michigan

                    in the house of representatives

                         Friday, July 26, 2002

  Mr. DINGELL. Mr. Speaker, I rise in opposition to the Conference 
Report on the Bankruptcy Reform bill (H.R. 333). The goal of the 
legislation, to ensure that debt that can be repaid is indeed repaid, 
is meritorious. However, the devil is in the details and many of these 
details are particularly devilish. This legislation will neither 
prevent more bankruptcies from occurring nor protect consumers. But it 
will sanction the continued predatory and abusive lending practices of 
the credit card industry, which has pressed hard for this legislation.
  It is important to note that there is no consumer bankruptcy crisis 
in America. Despite the rascality perpetrated by the credit card 
industry, including the solicitation of minors, seniors and pets, 
personal bankruptcies are not increasing. In fact, even as the average 
household debt burden has continued to climb over the past few years, 
bankruptcies have dropped by around fifteen percent.
  The only bankruptcy crisis we have in America is from companies like 
Enron and WorldCom. These corporations engaged in fraudulent accounting 
practices and then filed for bankruptcy to protect themselves from 
their creditors. These companies destroyed the lives and life savings 
of not only their employees, but investors everywhere. This conference 
report would not do anything to protect investors and employees from 
corporate wrongdoing such as this.
  It is important to note, however, that this legislation will protect 
the large banks and other financial institutions that engage in 
predatory lending practices. This is wrong. Studies show that 
irresponsible and overly aggressive lending practices were behind the 
high level of bankruptcies in the mid 1990's. However, the industry has 
not learned its lesson. Even as the industry continues to experience 
high profits, it refuses to take responsibility for its poor lending 
practices and increases its marketing and credit extensions. Two years 
ago, the credit card industry increased its mail solicitations by about 
fourteen percent. Additionally, total credit extended, which includes 
unused credit lines and debt incurred by consumers, has approached 
three trillion dollars for the first time ever.
  This outrageous behavior should not be rewarded. Unfortunately, the 
credit card industry has succeeded in winning enough support for a bill 
that encourages predatory lending at the expense of our most at risk 
citizens. Although a few helpful provisions were added to the bill, 
such as language to ensure that persons who use violence against 
clinics cannot shield their assets by filing for bankruptcy, on the 
whole, the bill hurts the poor and middle class. Americans deserve 
better, especially at a time when the economy has slowed and people's 
jobs are in jeopardy. As such, I urge all of my colleagues to oppose 
this wrongheaded piece of legislation.

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