Group Critical of Bankruptcy Plan
Critics of the credit union-backed bankruptcy reform legislation are charging that its backers are calling the legislation at the same time they are sending out more credit card solicitations than ever before.
The Consumer Federation of America has released an analysis that suggests "that in the past year credit card issuers have dramatically expanded their marketing and available credit while consumers have increasingly said 'no' to new cards and to new lines of credit.
In the 12-month period ending March 31, 2002, issuers have mailed five-billion solicitations-nearly 50 per U.S. household, said CFA, and have made available more than $3 trillion of unused lines of credit-about $30,000 per household.
CFA said the declining cost of funds has also driven up card portfolio profits by 50% over five years ago. "Can any of them explain why they need this relief when their profits are increasing, they are trying to sell many more cards and are offering cardholders far more credit?" asked Travis Plunkett, CFA Legislative Director. "What's worse, erecting new bankruptcy barriers will encourage issuers to market and extend credit even more aggressively."