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ARLINGTON, Va.-While bankruptcy filings have increased since President George W. Bush signed the Bankruptcy Abuse Prevention and Consumer Protection Act into law, credit unions have not experienced a real spike, according to one industry economist. NAFCU Senior Economist Jeff Taylor said that he certainly expects to see “a push up to deadline” when the figures for September and the beginning of October are released by the Administrative Office of the U.S. Courts as the Oct. 17 effective date becomes a reality. However, he added, “At least at credit unions, I didn’t see a huge spike.The trend is higher but not a huge amount higher.” That magic day will not inspire a significant drop off either. “I would think there would be some, but I don’t know about a huge drop off,” Taylor said, extolling the theory that some protection is better than none for those on the borderline. The Oct. 17 effective date for the new law will not affect those already in the process. The larger drop off should come from Chapter 7 bankruptcy filings which the new law was hoped to steer applicants away from. Now for the ultimate question, NAFCU Director of Political Affairs Murray Chanow said, acknowledging the elephant in the room: “After nine years of working on this legislation, is it going to work? That’s the real issue.” And how will institutions do at following it? “When someone shows up on the 18th, are they going to be handed a one-page means test form?” he continued. Will the means test work? Will the debtor be able to understand it without an attorney? Will the debtor education provisions work? The list goes on, according to Chanow.

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