[Congressional Record Volume 149, Number 51 (Monday, March 31, 2003)]
[Extensions of Remarks]
[Pages E623-E624]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT OF 2003

                                 ______
                                 

                          HON. BETTY McCOLLUM

                              of minnesota

                    in the house of representatives

                         Monday, March 31, 2003

  Ms. McCOLLUM. Mr. Chairman, I rise in opposition to H.R. 975, a bill 
to modify our nation's bankruptcy system. I support holding individuals 
responsible for paying debts that they can reasonably afford. Our 
banks, credit unions and other responsible financial institutions 
should not have to foot the bill for individuals who take advantage of 
the system to avoid their debts. I support efforts to curb the 
overwhelming number of bankruptcies filed each year, which strain our 
responsible financial institutions and their ability to provide low-
cost services to consumers. Unfortunately, I cannot support this very 
unbalanced legislation.
  I have spoken with bankruptcy judges from Minnesota who share my 
concern that this bill will be particularly harmful to working 
families. The bill before us today will make it harder for custodial 
parents to collect child support. Further, it does nothing to hold 
credit card companies accountable for using risky business practices to 
extend thousands of dollars of credit to those individuals already deep 
in debt. Despite significant pressure from Democratic members to 
implement meaningful disclosure requirements, this bill does not go 
nearly far enough in requiring that credit card companies provide 
information that consumers need to practice good financial planning.
  Supporters of this legislation claim that it puts children first by 
making child support claims the number one priority when assets are 
distributed in bankruptcy cases. But bankruptcy judges have told me 
that by forcing debtors to pay off more of their credit card debt after 
bankruptcy, this bill will directly impair their ability to make child 
support payments. It is wrong to make custodial parents and children 
who are owed support compete with the lawyers of credit card companies 
with deep pockets for the debtor's limited resources.
  This bill also fails to hold credit card companies accountable for 
extending thousands of dollars in credit to college students using 
questionable marketing tactics. College students and their parents tell 
me that students find almost unlimited credit readily available. Credit 
card companies are setting up shop on campus, offering easy credit with 
free gifts such as T-shirts, flashlights, pens or water jugs. Students 
are offered ``teaser'' interest rates of 5 to 7 percent, while failing 
to realize that their rates can later hit 20 percent. As a result, 10 
percent of all college students owe $7,000 or more to credit card 
companies. Because financial aid has failed to keep pace with 
inflation, these students also owe an average of $17,000 to the federal 
government upon graduation. We must do more to help our students.
  We must do something to curb the number of personal bankruptcies that 
strain our banks,

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credit unions and responsible financial institutions. But we must not 
do so at the expense of children receiving court-ordered child support 
and college students who are targeted by lures of easy credit and 
already facing thousands of dollars in student financial aid debt.

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