Credit Card Companies To Gain FromBankruptcy Reform

WASHINGTON - (03/03/05) -- While credit unions, banks and automanufacturers are expected to profit in reforms to the bankruptcylaws, the biggest beneficiaries may be the credit card companies.The bill being debate din the U.S. Senate this week would make iteasier for credit card companies and other debtors to recover morefrom debtors who file for bankruptcy by reserving Chapter 7, theelimination of all debts, to only the most financially diredebtors. MBNA Corp., for example, the nation's largest credit cardbank, stands to gain as much as much as $60 million a year inincreased collections under the bill--far more than the $40 millionor so the entire credit union industry is projected to increase itscollections by. That's based on the most widely accepted projectionof a 5% increase in collections if the bankruptcy bill is passed.And other large credit card companies, who have lead the nine-yearlobbying effort for passage of the bill, would also profitsignificantly, including Capital One Corp, American Express,Discover Financial and JP Morgan Chase.