Speedy House Vote on Bankruptcy Reform Delayed for Pope's Funeral
WASHINGTON-The passing of Pope John Paul II has caused the House to delay its vote on bankruptcy reform legislation until this week. CUNA learned last week that because so many members of Congress will be out to attend Pope John Paul II's funeral, the vote on the Bankruptcy Abuse Prevention and Consumer Protection Act (S. 256) would be postponed from its tentative April 7 slating. According to CUNA Vice President of Legislative Affairs and Senior Legislative Counsel Gary Kohn, the House Rules Committee cancelled plans to meet April 5, but that some Democratic amendments may be allowed on the House floor. Previously, lobbyists had speculated that a replacement bill might be entertained as an amendment. The amendments are still expected to be defeated, CUNA Vice President of Communications and Media Outreach Pat Keefe said. No new date has been set for the Rules Committee meeting or the floor vote, Kohn said, but he has been told it would be this week. CUNA and NAFCU kept up their lobbying work while Congress was on recess in late March. During the congressional Spring Break, the two trade associations wrote separate letters to Speaker of the House Dennis Hastert (R-Ill.) urging quick passage of S. 256 without amendment; the House Judiciary Committee reported the bill out favorably without amendment prior to the congressional recess. "Credit unions recognize that many people legitimately need the option to declare bankruptcy," CUNA President and CEO Dan Mica wrote. "What greatly concerns us, however, are the Chapter 7 debtors who clearly have the ability to repay all or part of their debt but are able under current law to totally walk away from their debt." "Enactment of this comprehensive bankruptcy reform measure will help ensure that the bankruptcy system is fair for debtors, creditors and consumers," NAFCU President and CEO Fred Becker echoed in his letter. "As member-owned, not-for-profit cooperatives, credit unions are forced to pass bankruptcy losses on to financially responsible members through increased interest rates on loans and decreased dividend rates on savings. Unfortunately, in response to increasing bankruptcy losses, many lenders - including some credit unions - have had to tighten their lending policies in order to decrease their loan losses." Mica outlined credit unions' three top priorities: the needs test; mandatory financial education; and maintaining voluntary reaffirmations for credit union members. "We also strongly support the provision in this bill that would prohibit Chapter 7 or 13 debtors from receiving a discharge if the debtor does not complete a course in personal financial management," he stated. "In anticipation of this provision, CUNA plans to develop face-to-face and/or online courses for our members." He added, "Credit unions also strongly believe that reaffirmations are a benefit both to the credit union, which would avoid a loss, and to the member/debtor, who by reaffirming with the credit union continues to have access to financial services and to reasonably priced credit."