Fate of bankruptcy reform may be tied to e-signature bill

WASHINGTON - In an ironic twist, two of the most pressing issues for financial industry lobbyists may wind up in one bill At press time, because of some unique happenings on Capitol Hill, bankruptcy reform legislation could be tacked on to digital signature legislation. Bankruptcy reform legislation was expected to get a boost a few weeks ago from the tax and minimum wage provisions being stripped out. However because of a delay by Senator Paul David Wellstone (D-Minn.) the provisions now must remain in the bill. Fearing a stalemate, some members of Congress then decided to appoint "informal" conferees to come up with a compromise bill. The informal talks are being led by Senators Charles Grassley (R-Iowa) and Representative George Gekas (R-Pa.). CUNA's senior vice president of government affairs Carl Parks said this is the first time he can remember seeing an "informal" conferee situation. "I have not seen this before. This to my understanding is the first Congress that can do an informal conference because of a parliamentary rule change," said Parks. Regardless of how the informal committee came about, he said CUNA is focusing on it just as it would on a formal committee. If the informal committee reaches an agreement they could tack on the compromise language to some other active piece of legislation that's in conference. That's where the digital signature legislation comes in. However Treasury Secretary Lawrence Summers and Commerce Secretary William Daley aren't keen on seeing the e-signature bill get bogged down with bankruptcy. In a letter to e-signature legislation conferees the two asked that conferees act swiftly on the e-signature legislation "without the addition of extraneous measures." E-signature conferees may not want bankruptcy reform tacked on because the Clinton administration has on a number of occasions threatened to veto bankruptcy reform. One of CUNA's main objectives with bankruptcy legislation is to get a credit union carveout for reaffirmations. That carveout is in the House's version of bankruptcy reform, but not on the Senate side. Parks said in the informal conference the Senate had budged on the reaffirmation issue, but not far enough. "The senate reaffirmation provision in this informal conference is a well intended effort to help CUs protect reaffirmations, but more clarification still needs to be done. We've got pretty strong assurances, but we don't have the absolute final assurance that CUs are taken care of on reaffirmations," said Parks. The reaffirmation carveout received a strong endorsement from five members of Congress in a "Dear Colleague" letter to members of the informal conference. The letter was signed by Representatives Ellen Tauscher (D-10th,Calif.), James Maloney (D-5th, Conn.), Martin Frost (D-24th, Texas), Patrick Kennedy (D-1st, R.I.), and Robert Menendez (D-13th,N.J.). In it they ask for "common sense bankruptcy reform" and they specifically cite the credit union reaffirmation carveout as an important provision of reform. -pgentile@cutimes.com