A congressionally chartered commission investigating the bankruptcy code is ignoring changes being pushed by lenders, a coalition of banking trade groups charged last week.
The commission has heard extensively from pro-consumer groups but hasn't given creditors an equal hearing, the National Consumer Bankruptcy Coalition charged in a March 26 letter.
"We assumed the commission would be willing to hear from everyone and would be objective," said Phil Corwin, a lobbyist representing the coalition. "But now we have a situation where the commission is adrift and the policies they are adopting do not seem balanced."
Banks lose billions of dollars every year when borrowers declare bankruptcy. Industry officials believe substantial sums could be recovered if Congress made it harder for people with assets to use bankruptcy to avoid paying their debts. Bankers also want a streamlining to reduce delays and uniform rules that would apply in all Bankruptcy Court districts.
Congress tried to address many of these questions when it revised the bankruptcy code in 1994. But lawmakers realized they couldn't handle every issue in one bill. So they created the nine-member commission to prepare a report on what additional changes are needed.
In its letter, the coalition demanded that bankers be allowed to testify about the adjustments they want.
The group also asked that an industry representative be selected to participate in a commission-sponsored policy forum in May. The forum will feature speakers who will conduct a daylong debate on what changes should be recommended.
Finally, the bankers urged the commission to hold hearings in conjunction with industry groups. So far, the commission has only scheduled a meeting to coincide with a consumer bankruptcy lawyer convention.
U.S. Bankruptcy Court Judge Robert E. Ginsberg, who is chairman of the group of lawyers, judges, and accountants, said he plans to bring up the letter with the commission. He declined to comment further.
Members of the coalition include: the American Bankers Association, Independent Bankers Association of America, America's Community Bankers, and Consumer Bankers Association.
