[IP] The Senate Opens Fire on U.S. Consumers 3-9-05

Interestingly enough, herewith a quote from today's New York
Times reporting on the bill's passage in the Senate.
Regarding those who might be hardest hit by this legislation:

"In a letter to Congress two weeks ago, 104 bankruptcy law
professors predicted that "the deepest hardship" would "be
felt in the heartland," where the filing rates are highest -
Utah, Tennessee, Georgia, Nevada, Indiana, Alabama, Arkansas,
Ohio, Mississippi and Idaho."

---- Original message ----
>Date: Wed, 9 Mar 2005 15:21:41 -0800
>From: "Dave Farber" <dave@xxxxxxxxxx>
>Subject: [IP] The Senate Opens Fire on U.S. Consumers 3-9-05
>To: "ip" <ip@xxxxxxxxxxxxxx>
>
>

>
> _______________ Original message _______________
> Subject: The Senate Opens Fire on U.S. Consumers
> 3-9-05
> Author: Arianna Huffington
> <arianna@xxxxxxxxxxxxxxxxx>
> Date: 09th March 2005 3:9:15 PM
>
> THE SENATE OPENS FIRE ON U.S. CONSUMERS
>

> By Arianna Huffington
>
> U.S. consumers and freed Italian hostage Giuliana
> Sgrena found themselves in the same position this
> week: under fire from those put in place to protect
> them.
>
> For Sgrena, the bloody barrage came from jittery
> U.S. soldiers. For consumers, it was jaded U.S.
> senators who pulled the trigger, about to pass a

> bankruptcy bill so hostile to ordinary American
> families that it could only have come about in a
> place as corrupt, cynical and unmoored from reality
> as Washington, D.C.
>
> In a normal world, those elected to represent the
> interests of the people would have fought for
> bankruptcy legislation that would, well, represent
> the interests of the people. But not in Beltway
> Bizarroland. Instead of cracking down on predatory

> lending practices, closing loopholes that favor the
> wealthy, and strengthening the safety net for
> working people, single mothers and elderly Americans
> struggling to recover from a financial setback, the
> Senate put together a nasty little bill that reads
> like a credit industry wish list. Rubbing salt in
> the wound, Sen. Charles Grassley, the bill's chief
> sponsor, labeled it the Bankruptcy Abuse Prevention
> and Consumer Protection Act of 2005--even though it
> does nothing to prevent bankruptcy abuse or protect

> consumers.
> So what does the bill do? It makes it harder for
> average people to file for bankruptcy protection; it
> makes it easier for landlords to evict a bankrupt
> tenant; it endangers child support payments by
> giving a wider array of creditors a shot at
> post-bankruptcy income; it allows millionaires to
> shield an unlimited amount of value in homes and
> asset protection trusts; it makes it more difficult
> for small businesses to reorganize, while opening

> new loopholes for the Enrons of the world; it allows
> creditors to provide misleading information; and it
> does nothing to reign in lending abuses that
> frequently turn manageable debt into unmanageable
> crises. Even in failure, ordinary Americans do not
> get a level playing field.
>
> Credit card companies have been feverishly lobbying
> for this legislation for nearly a decade--and it
> looks like the $34 million the finance and credit

> industries have contributed to political campaigns
> since 1996 is finally about to pay off. On Tuesday,
> the cloture vote on the bill was 69 to 31. The House
> passed similar legislation last year and GOP leaders
> are hoping to bypass the conference committee
> deadlocks that have derailed similar measures in the
> past and have the bill on President Bush's desk in
> short order. The president, well aware that credit
> card giant MBNA is one of the Republican Party's
> largest donors, has promised to sign the bill as

> soon as someone hands him a pen.
>
> Make no mistake, the inequitable nature of the
> bill--bending over backwards to help the credit card
> industry while sticking it to American working
> people who fall on hard times--is no accident. Time
> and again over the last week, the Senate shot down
> amendments that would have made the bill a bit less
> mean-spirited. They denied proposals that would have
> made it easier for military veterans, the sick and

> the elderly to qualify for bankruptcy protection.
> They even rejected an amendment that would have put
> a 30 percent ceiling on the interest rates credit
> card companies can charge. Thirty percent--that's
> more than Paulie Walnuts charges. But 74 U.S.
> senators--including John Kerry, Harry Reid, Barack
> Obama and Dick Durbin--clearly thought that wasn't
> high enough. Quick, somebody send those guys a Bible
> bookmarked to Deuteronomy 23:19: "Thou shalt not
> lend upon usury to thy brother."

>
> For years, credit-card companies have been claiming
> that tougher laws are needed to reign in high-flying
> customers using bankruptcy to game the system. But
> the truth is that the vast majority of people who
> file for bankruptcy are middle-class folks who can't
> pay their bills because they've lost their jobs or
> been hit with high medical bills or gone through a
> divorce.
>

> Indeed, a recent study by Harvard University found
> that half of last year's 1.6 million bankruptcies
> were the result of crushing medical bills. Put
> another way: Every 30 seconds, someone in this
> country files for bankruptcy in the wake of a
> serious illness. How's that for a shocking stat?
> Here's another: Three-quarters of the so-called
> medically bankrupt had health insurance. It just
> wasn't enough to cover the dramatic rise in
> health-care costs.

> But instead of adapting to this harsh new reality,
> where hardworking, college-educated, middle-class
> folks can be financially destroyed by a sudden
> illness, the Senate is about to approve a
> one-size-fits-all law that treats a family man who
> has sunk into debt because of a heart attack the
> same as a con artist who maxes out his MasterCard,
> then refuses to pay up.
>
> Worst of all, the bill does absolutely nothing to

> protect consumers from the aggressive tactics
> credit-card companies have devised in recent
> years--tactics that have proven hugely profitable.
> Along with sending out over 5 billion solicitations
> a year, they are constantly developing new ways to
> stick it to the people they've already lured into
> the tent. For instance, companies now routinely jack
> up a cardholder's interest rate when their payment
> is late--and, presto, a "fixed" 7 percent APR is
> suddenly transformed into a cash-gobbling 30 percent

> loan.
>
> There has also been an explosion in the fees that
> credit card companies charge: late fees, balance
> transfer fees, cash-advance fees, over-the-limit
> fees. Such fees bring in billions and are partly
> responsible for the fact that, even as personal
> bankruptcies in America have steadily increased, so
> have the profits of credit card companies--which
> reached a whopping $30 billion last year.

>
> So tell me again: Just who is gaming the system?
>
> It's one thing for credit card companies to exact
> their pound of flesh even as their profits soar. But
> shouldn't we hold our elected officials to a higher
> standard? The bankruptcy bill is morally bankrupt.
> And so is any senator who votes for it.
> © 2005 ARIANNA HUFFINGTON.
> DISTRIBUTED BY TRIBUNE MEDIA SERVICES, INC.

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