[Congressional Record Volume 151, Number 29 (Friday, March 11, 2005)]
[Senate]
[Pages S2515-S2517]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT OF 2005


                    credit card company disclosures

 Mr. VOINOVICH. Mr. President, I would like to express my 
concerns about certain practices of the credit card industry. I am 
especially concerned about the disclosures credit card companies make 
to their customers. While I am pleased that the bankruptcy reform bill 
includes new disclosure obligations for credit card companies, I would 
like to see the Banking Committee examine the credit card industry and 
consider the need for further reform of the regulations governing the 
credit card industry.
  Mr. SHELBY. Mr. President, through the course of the debate on the 
bankruptcy reform bill, it has become clear there are many Senators who 
have concerns about the numerous aspects of the credit card industry. I 
want to point out that I am aware of the Senator from Ohio's concerns 
in particular. I want to indicate for the Record that I recognize these 
concerns and to note that I have had a longstanding interest in 
exploring these matters more deeply. Therefore, I am willing to commit 
to holding hearings in the Banking Committee later this year to examine 
the credit card industry and the need to reform credit card 
regulations. I believe the ranking member also shares my interest in 
holding hearings.
  Mr. SARBANES. Chairman Shelby, I share your interest in holding 
hearings on the credit card industry and would hope that we might hear 
from all those Senators who have expressed an interest and may wish to 
testify before the committee.
  Mr. VOINOVICH. Mr. President, I would like to thank the chairman and 
ranking member of the Banking Committee for their acknowledgment of my 
concerns. I also appreciate their interest in this matter and believe 
that these are serious issues that merit further attention. I look 
forward to working with the chairman and ranking member in examining 
these issues associated with practices in the credit card 
industry.
 Mrs. CLINTON. Mr. President, while I strongly believe that 
Congress should act to fix the problems in our bankruptcy system, I 
also believe that this bill is misguided and deeply flawed.
  This bankruptcy bill fundamentally fails to accord with the 
traditional purposes of bankruptcy, which recognize that we are all 
better off when hard-working people who have suffered financial 
catastrophe get a ``fresh start'' and a second chance to become 
productive and contributing members of society. With the passage of 
this legislation, which makes obtaining this fresh start more expensive 
and more difficult, we are ensuring that many responsible Americans 
will continue to be buried under mountains of debt, and unable to take 
back control and responsibility for their lives.
  Our Nation's bankruptcy law developed out of a recognition that the 
world can be a competitive, often unforgiving place. Bankruptcy reform 
should therefore be directed toward creating a civil society in which 
valuing individual responsibility is not incompatible with admitting 
the enduring truth that sometimes bad things happen to responsible, 
hardworking people. Sometimes, conscientious Americans need help and 
support against forces that are too big for them to stand against 
alone. It should be about making sure that both large corporations and 
individual citizens are held to the same standards of responsibility 
and accountability.

[[Page S2516]]

  This bill is flawed in a number of ways. But I want to begin by 
commenting on one of its most distressing elements. As many people 
know, I have long been concerned about the burdens placed on America's 
families by a lack of health care insurance and by rising healthcare 
costs. In this bill, the Senate had an opportunity to take one 
important step to help citizens driven to the point of bankruptcy by 
unavoidable medical problems. Instead, the Senate rejected this 
opportunity to lighten the load on Americans dealing with the twin 
blows of medical and financial difficulties.
  The Senate's failure to act is all the more striking to me today, 
because I must submit this statement into the Record while attending to 
a medical situation in my own family. Fortunately, my family is well-
insured, and we are not in danger of losing that coverage. I am deeply 
aware and profoundly grateful for the good fortune we enjoy in having 
access to quality medical care in the face of significant medical 
needs.
  And I know that many American families are not so lucky. Indeed, 
among those Americans whose illnesses led to bankruptcy, 75.7 percent 
of them had insurance at the onset of the illness. Employees with 
serious long-term illnesses often lose their jobs, which means they 
also lose their health insurance.
  Medical bankruptcy has skyrocketed in recent decades. In 1981, only 8 
percent of personal bankruptcy filings were due to a serious medical 
problem. By contrast, a recent study by researchers from Harvard Law 
School and Harvard Medical School found that half of personal 
bankruptcies filed in this country are now due to medical expenses.

  In this bill, the majority simply refuses to acknowledge this current 
crisis of medical bankruptcy. It refuses to acknowledge that sometimes 
medical disaster strikes. ``Life Happens.'' The family breadwinner is 
struck down by illness, and the entire family's financial future veers 
toward collapse.
  This is not a rare occurrence; we all know people who have endured 
hardships like medical emergencies that break the bank, layoffs, or 
vanishing pension plans. These are the people the bankruptcy laws are 
designed to protect. They are facing hardships because of forces 
outside of their control.
  I support real reform that would hold accountable people driven into 
bankruptcy because of their own irresponsibility. But the evidence 
shows that the vast majority of chapter 7 bankruptcy filers are not 
spendthrifts who have run up ther--it cards buying luxury goods. And 
this bill primarily targets the vast majority of chapter 7 bankruptcy 
filers who have lived responsibly but are nonetheless facing financial 
ruin because of the unavoidable vicissitudes of life.
  The world has changed since this bill was first considered in 2001. 
During the past 4 years, workers have sustained unprecedented job 
losses, endured termination of pension plans, and faced wage cuts and 
elimination of health care and other benefits as a result of their 
employer's bankruptcy.
  Many of these bankruptcies have been the direct result of wrongdoing 
by corporate mismanagement. The people who take the biggest hit when 
big companies go bankrupt aren't the top executives, but the ordinary 
employees whose pensions and healthcare coverage disappear overnight.
  In the last 4 years, the global economy has become relentless. 
Workers are living with more employment insecurity, and many have to 
retrain mid-career to adjust to the changing dynamics of the American 
economy.
  We are now a nation at war. And at a time when they are carrying the 
burden of sending loved ones off to war, military families have become 
the victims of payday loans charged at 400 percent interest, insurance 
scams, and other forms of financial chicanery that leave them 
economically devastated.
  Yet this bill does nothing to help these responsible Americans who 
suddenly find themselves in dire financial straits. In fact, it makes 
things harder for these individuals to find refuge in bankruptcy. Why 
is the majority committed to making things harder?
  Many of my colleagues on this side of the aisle have asked this 
question and have received no real answer. So the bottom line is that 
this bill's proponents, while touting the need for bankruptcy reform 
and accountability, are willing to address only part of the problem, 
dealing only with the most vulnerable in our society, and leaving the 
reform of corporate bankruptcies on the sidelines, requiring no 
additional accountability with respect to our Nation's companies.

  A number of my colleagues in the minority offered amendments in an 
effort to address many of these changed circumstances, but amendment 
after amendment was rejected. I simply cannot understand why the 
Republican majority gave instructions to its caucus to oppose any and 
all amendments, no matter how reasonable they were or the circumstances 
they were designed to address.
  I find even more disturbing the fact that the majority refused to 
more appropriately address the special needs of our troops in the 
context of this legislation. I am baffled by the majority's rejection 
of Senator Durbin's ``G.I. Protection Amendment,'' which I was proud to 
co-sponsor, and which was also supported by the Military Officers 
Association of America, the Air Force Sergeants Association, the 
National Association for the Uniformed Services, and the Enlisted 
Association of the National Guard of the United States, among other 
organizations. I can't understand why the entire Senate didn't 
cosponsor this amendment to better protect our men and women in uniform 
and their families. It is troubling and incomprehensible to me that 
most of my colleagues would refuse to vote for it.
  And while refusing to support an amendment that would have helped 
military families in a meaningful way, the majority of the Senate had 
no problem rejecting an amendment that was designed to make it harder 
for millionaires to hide their assets from creditors, even after filing 
for bankruptcy.
  Even though there appears to be a near universal recognition that the 
bankruptcy law contains a major loophole, one that enables wealthier 
Americans who file for bankruptcy to shield their assets through what 
are called ``asset protection trusts,'' a majority of the Senate 
rejected a meaningful amendment to close that loophole.
  To make matters even worse, yesterday the Senate, again led by the 
Republican leadership, rejected an amendment offered by Senator 
Kennedy, which would have outlawed unlimited homestead exemptions. This 
would have prevented the wealthiest Americans from avoiding 
responsibility by hiding their assets from creditors.
  The Senate also rejected an amendment that was intended to reinsert 
language that had been in the legislation the Senate passed in 2001, 
which would have prevented the discharge in bankruptcy of all liability 
for willful violation of protective orders and violent protests of 
providers of lawful services, such as reproductive health services.
  Even though this language was in the 2001 Senate-passed bill, it is 
conspicuously absent from the bankruptcy bill that the Senate is now 
considering 4 years later.
  In other words, bill proponents, led by the Republican leadership, 
have called for additional significant financial accountability, but 
not if you are a corporate entity, not if you are wealthy, and not if 
you are an organization that a court has found to have violated the law 
and infringed upon the rights of others.
  Almost without exception, the majority has voted across the board 
against these and other amendments, apparently under strict orders from 
the Republican leadership to oppose any and all amendments, regardless 
of whether the amendments were designed to help our troops, to remove 
loopholes for millionaires, to help families facing medical and 
financial crisis. This is the antithesis of the American and family 
values that many of my colleagues so like to talk about.
  This legislation, especially after refusal, after refusal, after 
refusal to support amendments to improve it, is unfair and unjust.
  In short, the legislation that the Senate is voting on today, could 
have, with more careful and good-faith consideration, been a vehicle in 
which we could have thoughtfully addressed abuses in

[[Page S2517]]

the bankruptcy process by both consumers and corporations. 
Unfortunately, the Senate leadership chose to go down a different road.
  Because of unforeseen and unavoidable circumstances, I will not be 
present when the Senate votes on final passage of this bill today. But 
were I able to be here, I would vote no, because this bill is clearly 
not in the best interests of the American people.

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