A study in bipartisanship or politics as usual?
WASHINGTON-Capturing the essence of the bipartisan spirit necessary to pass anything this Congress, the Senate passed the bankruptcy abuse reform bill (S. 420) by a vote of 83-15. Now the legislation is heading for what is expected to be a brief pit stop in conference before moving on to the president's desk. Though President George W. Bush had previously expressed support for the bankruptcy abuse reform legislation recently passed by Congress, new problems have come into play. There has been talk in Washington, according to credit union lobbyists, about a possible veto of the bill if an acceptable homestead exemption provision can not be reached. Bush still supports the general idea of reforming the bankruptcy system. In the Senate, a compromise was struck that would permit bankruptcy filers owning a home for at least two years worth no more than $125,000 to keep their home. Under the Senate version, states may not opt out of the federal cap. In the House version of the bill, the cap is $250,000 with two years ownership, and permits the states to create their own cap on the value of the home or eliminate the cap altogether. Bush, as well as fellow Texan and Republican Senator Phil Gramm, have expressed strong opposition toward the Senate compromise. Still, credit union lobbyists expect another compromise to be worked out that will be acceptable to Bush and have a bill signed this session. "Don't mess with Texas," is the moral NAFCU Lobbyist Murray Chanow is taking away from this experience. However, credit unions are not particularly concerned with the homestead provision unless it causes the legislation to fail for the third time. Provisions credit unions were particularly interested in-means testing, mandatory financial education, and voluntary reaffirmations for credit union members-survived intact, despite discussions surrounding an amendment considered by Senator Jack Reed (D-R.I.) which could have prohibited reaffirmations. Instead, the General Accounting Office was charged with examining the issue over an 18-month period. Unfortunately for bankruptcy reform proponents, the homestead compromise was a critical issue to such overwhelming support for the measure. Last year the bill also passed, but not by quite as much of a margin, without the compromise. The bill is expected to go to conference shortly, if the parties can resolve their control issues. Democrats are arguing for equal representation in the conference because of the 50-50 split in the Senate and the close call in the House. Republicans want to avoid a deadlock and argue that they should have the majority because they do have more votes in the House, as well as in the Senate with Vice President Dick Cheney's tie breaking vote. As first lady, Hilary Clinton, now a Democratic senator representing New York, ardently opposed the bankruptcy reform legislation. It seems the tides have turned. In her new position as Senator Clinton, she has had a change of heart, which she credits to many of the amendments made during debate. Clinton also noted the many credit unions in her new home state that shared anecdotal evidence of what the bankruptcy abuse reform legislation can do for the system. "Bankruptcy reform is important.," she said in statements on the Senate floor. "In recent weeks, I have heard from many small credit unions throughout New York, hard working small lenders whose entire membership suffers when the credit union is faced with covering bankruptcy losses." Clinton spoke of a credit union from Hoosick Falls, with only $2.5 million in assets, that relayed to her how when one member of the tiny credit union filed for Chapter 7 bankruptcy, the institution lost thousands. To recoup the costs, the credit union had no choice but to penalize the entire 1,000-person membership with increased fees. Though she still holds some reservations about the bill, Clinton says that a reasonable compromise has been worked out. She applauded the work Congress had done to adopt a compromise amendment on clinic violence, the homestead cap, and efforts to collect child support payments from filers. "Let me be clear-I will not vote for final passage of this bill if it comes back from conference if these kink of reforms are missing," she stated. She added that she saw the legislation as a "work in progress" and that she would continue to work on the issue. "Reform is needed," she said. "The right kind of reform is necessary. We're on our way toward that goal, and I hope we can achieve final passage of a good bankruptcy reform bill this year." CUNA came in a close second to the American Bankers Association (ABA) in campaign contributions from members of the National Consumer Bankruptcy Coalition during 1999-00, according to data compiled by the Center for Responsive Politics (CRP) from the Federal Election Commission (FEC). The CRP compilation, based on data from Feb. 1, 2001, showed the ABA in first place for soft money, Political Action Committee (PAC), and individual contributions with more than $1.7 million. CUNA followed up with $1.6 million and America's Community Bankers was a distant third among coalition members with just over half-a-million dollars contributed. In the last 10 years, credit union contributions to political campaigns have skyrocketed from $602,565 to $2.1 million in 2000. However, this trend is not unique to credit unions because, in 1990 and 2000, they ranked 72nd each year, which portrays how significantly the ante has been upped. CUNA is the main credit union contributor, while NAFCU follows in second place, contributing just over $100,000 in the 2000 election cycle, according to CRP. CUNA slightly favored Republican candidates with 53% of funds going toward their campaigns. NAFCU funds stayed closer to the Democratic side with 54% going to their campaigns. How much does money really count for in Washington? Congressman George Gekas (R-Pa.), author of the bankruptcy reform bill in the House, received the largest portion of his PAC campaign contributions from the financial services/insurance/real estate industries ($67,000, $4,000 from credit unions). -email@example.com