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WASHINGTON-The House last week passed the bankruptcy reform bill by an overwhelming vote of 315-113, with one Democrat voting present. Though the House moved the bill quickly, the Senate is expected to take its time. The House approved an amendment to H.R. 975, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2003, giving credit unions equal footing with banks and thrifts in financial contracts with regard to bilateral netting. Sponsored by Congressmen Pat Toomey (R-Pa.) and Brad Sherman (D-Calif.), the amendment to Title IX of the bill permits credit unions to participate in bilateral netting. Currently, only banks and thrifts are addressed in the provision, which allows an institution to pay the difference of funds owed between it and another financial institution rather than each institution paying the full amount. For example, if A owes B $100 and B owes A $60, then only A pays B $40. Action on the bill was reasonably swift for Washington, D.C. due to rules limiting debate and the number of amendments. Senate Judiciary Chairman Orrin Hatch (R-Utah) has said he will introduce the bill to the Senate in some form on his side of the Capitol building as soon as the House passed a bill. However, with the potential for war literally starting any minute, bankruptcy abuse reform may get tied up. In addition, lobbyists have every expectation that Senator Charles Schumer (D-N.Y.) will once again offer his abortion clinic violence amendment, which has been one of the main sticking points each time the bill has come up and the only remaining hurdle in last year’s legislation. The three main credit union-supported provisions- means testing for Chapter 7 filers, mandatory financial education prior to filing for bankruptcy protection, and voluntary reaffirmations for credit union members-remain in the bill. Interestingly, CUNA recently announced that it has partnered with the National Association of Realtors urging key lawmakers to support the bankruptcy abuse reform legislation. In a letter to all Judiciary Committee members, CUNA President and CEO Dan Mica, and NAR President Cathy Whatley pointed out that H.R. 975 will “provide a more balanced approach to the bankruptcy laws of this nation that will increase credit availability to consumers.” NAR is currently in a heated battle with the banker groups to keep banks from crossing over into real estate brokerage. CUNA Vice President of Legislative Affairs and Senior Legislative Counsel Gary Kohn said his organization has been meeting periodically with the realtors over the last couple of years and found they have several issues in common. He added that the meetings were not necessarily initiated by either group but were mutual. When asked if the coalition was aimed at thumbing CUNA and NAR’s noses at the bankers’ groups, Kohn only said, “If the bankers’ interpret it that way, so be it.” In the letter, CUNA and NAR also noted their mutual interest in increasing homeownership opportunities for Americans and the groups’ belief that this legislation will help achieve that goal.

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