[Weekly Compilation of Presidential Documents Volume 36, Number 24 (Monday, June 19, 2000)]
[Pages 1332-1333]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Letter to Congressional Leaders on Bankruptcy Reform Legislation

June 9, 2000

Dear Mr. Speaker:  (Dear Mr. Leader:)

    I write to urge a fair resolution of the open issues in discussions 
on bankruptcy reform. I have long made clear my support for legislation 
that would encourage responsibility and reduce abuses of the bankruptcy 
system on the part of debtors and creditors alike. We also must ensure 
that a reasonable fresh start is available for those who turn to 
bankruptcy as a last resort when facing divorce, unemployment, illness, 
and uninsured medical expenses. Bankruptcy reform legislation should 
strike the right balance.
    The House-passed bill was so one-sided that I would have vetoed it. 
The Senate-passed bill's bankruptcy provisions represented a better 
attempt to balance legitimate debtor and creditor interests, although I 
had serious concerns about some aspects. My Administration has watched 
carefully as the staff and informal conferees have sought to reconcile 
these two bills. While there appears to be some informal progress on 
some outstanding issues, it is very important that the resolution of 
these issues be fair and that we ensure that we do not erode protections 
for all debtors--when targeting the few who abuse the system. The 
outcome will help determine whether the final bill tips the scales. I am 
concerned, for example, that the final bill:
<bullet>    may not adequately address the problem of wealthy debtors 
            who use overly broad homestead exemptions to shield assets 
            from their creditors;
<bullet>    may weaken important credit card disclosure provisions that 
            will help ensure consumers understand the implications of 
            the debt they are incurring;
<bullet>    may eliminate protections for reasonable retirement pensions 
            that reflect years of contributions by workers and their 
            employers; and
<bullet>    may include an anti-consumer provision eliminating existing 
            law protections against inappropriate collection practices 
            when collecting from people who bounce a check.
    Finally, I am deeply disturbed that some in Congress still object to 
a reasonable provision that would end demonstrated abuse of the 
bankruptcy system. We cannot tolerate abusive bankruptcy filings to 
avoid the legal consequences of violence, vandalism, and harassment used 
to deny access to legal health services. An effective approach, such as 
the one offered by Senator Schumer's amendment, should be included in 
the final legislation.

[[Page 1333]]

    I sincerely hope that balanced, bipartisan bankruptcy reform will be 
completed this year, but I will not hesitate to veto unfair legislation 
that fails the test of balance.
     Sincerely,
                                            William J. Clinton

 Note: Letters were sent to J. Dennis Hastert, Speaker of the House of 
Representatives; Richard A. Gephardt, House minority leader; Trent Lott, 
Senate majority leader; and Thomas A. Daschle, Senate minority leader. 
An original was not available for verification of the content of this 
letter. This item was not received in time for publication in the 
appropriate issue.