The following is a transcript of remarks between Sen. Richard Durbin and an American Banker reporter, Tuesday evening after President Obama’s speech to Congress.

AB Reporter: "Sen. Durbin, do you have a moment today on bankruptcy reform?"

Sen. Durbin: "Sure."

AB Reporter: "I know that in the House, at least regarding this week, the lenders are still trying to make the restrictions so that you have to exhaust all other recourses before bankruptcy pretty tough, even today I heard about making HUD or one of the regulators certify that you had a modification or something that didn't work before you could go through bankruptcy. What are your thoughts on what the standard ought to be?"

Sen. Durbin: "I think that it is reasonable to require the borrower to be in communication for a reasonable time before they file for bankruptcy. You know if a borrower will not talk to a bank they should not be able to avail themselves but it's really difficult to write into law a measurement of good faith so the best you can do is give them an opportunity to meet. Remember 99% of foreclosed homes end up owned by the bank so it isn't as if they are going to end up coming out ahead if the person's losing their home. They get stuck with $50,000 in costs and a house to maintain; to protect from vandalism, and to show and try to sell, so the banks ought to be much more forthcoming. Every attempt we've tried, every voluntary attempt we've tried has failed. You have to have this bankruptcy provision as the last resort if there is a failure to negotiate the mortgage."

AB Reporter: "Do you know when the Senate might be taking this up?"

Sen. Durbin: "After the House and we might change it of course. There are variations we're looking at. But I'm willing to restrict this to homeowners to eliminate speculators; to subprime mortgages, only those currently in existence. I want to make this a reasonable limited —

AB Reporter: "You're willing to limit it to subprime mortgages?"

Sen. Durbin: "We've talked about that as a possibility. But I am willing to negotiate. I want this to be a reasonable approach, but we have to include it. If we don't include it we'll be stuck in the same mess we're in today. "

AB Reporter: "What about the time limitation as far as when the loans were originated. I understand there are some who would like to see it limited to loan underwritten in the last few years?"

Sen. Durbin: "My version will not be prospective. So it has to be existing loans."

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