With a quick flourish of the pen, President Bush signed the bankruptcy reform bill last week, making the credit union-supported legislation law. The new law will take effect six months from the date of signing.
"This bill is going to go a long way to improving the bankruptcy system; helping those who need help the most, while allowing those who pay their debts to do so," said the President, while lobbyists from CUNA, NAFCU, the American Bankers Association and other members of the consumer bankruptcy coalition, that formed a powerful yet awkward lobby over five congresses, looked on.
"This is the end of the legislative process and the start of the education process," said CUNA President Dan Mica, after the bill-signing ceremony. "Now it's important that we live by the philosophy we preach; responsibility in extending credit and in educating the consumer."
NAFCU lobbyist Murray Chanow, who also attended the bill-signing, signaled the end of a long journey. "NAFCU set out over eight years ago to try to form a good bankruptcy bill," said Chanow. "In the end, the provisions we wanted in the bill survived to form what we think is a very good bill for credit unions."
Also attending the bill-signing were NAFCU President Fred Becker, and CUNA lobbyists John McKechnie and Gary Kohn.
The bill will institute a means-based test for consumer bankruptcy, preventing those with some financial means from filing a Chapter 7 to erase all debts, and relegating them instead to a Chapter 13 financial reorganization.
It will also require all consumers who file for personal bankruptcy to undergo financial counseling, something credit unions lobbied to get into the bill.
The measure will also retain CUs' ability to enter into reaffirmation, or voluntary repayment agreements for selected debts, such as car payments, with members during the bankruptcy process.
