Latest Bankruptcy Bill Makes Debut; This Time In Senate
The ball began to roll once more on bankruptcy reform last week with a new bill introduced in the Senate.
The bill, introduced by influential Sen. Charles Grassley, looks very much like the old bill that died in each of the last four congresses, ever so close to the finish line. This one includes the three main credit union priorities: a means-based test to determine which debtors will be allowed to file for chapter 7 to erase their debts; mandatory financial education classes for bankruptcy filers; and the continued ability of credit unions and other creditors to enter into reaffirmation, or voluntary repayment, agreements with debtors.
"It's time to promote responsible borrowing while also ensuring the safety net offered by bankruptcy," said Sen. Grassley, the Iowa Republican who has helped lead efforts to pass the bill the last four times. "It (bankruptcy) was not intended to be a convenient financial planning tool where deadbeats can get out of paying their debt scott-free while honest Americans who play by the rules have to foot the bill."
John McKechnie, chief lobbyist for CUNA, said the start of the process in the Senate, where the bill got hung up the past two congresses, is a positive sign that the Senate is looking to resolve the controversy over the abortion protest amendment. That amendment would bar abortion clinic protesters from discharging their debts under bankruptcy laws, as one clinic protester, who murdered a Buffalo abortion doctor, did.
Because the amendment was tacked onto the bill after it passed both the House and Senate in each of the last two congresses, Republican leaders pressured by the party's influential pro-life wing, refused to pass the bill.
"We're pleased that the Senate is moving first. It signals some kind of renewed energy to resolve the issue," said McKechnie. "What is clear is that they're going to work with Sen. (Charles) Schumer and give him his day in the sun," he said, referring to the New York senator who sponsored the abortion clinic amendment.
"We have reason to believe that the Senate leadership is working with the Democrats and the committees to resolve this issue," he said."Credit unions have been waiting long enough for this."