class=Section1>
class=MsoNormal>Credit
Industry
Starts
Push for
Bankruptcy
Overhaul
To
ensure that
Republican
leaders
make good
on their
promise to
move
on the
bankruptcy
legislation, the
banking
industry
plans to
begin intense
lobbying
efforts
today on
Capitol
Hill,
according
to the
CQ Daily
Monitor.
style='mso-spacerun: yes'> Leading the way is the American
Bankruptcy
Association, which
is urging
its members
to ask
lawmakers
to support
the overhaul
legislation (H.R.
833, S.
3046) when
Congress
calls it
up.
style='mso-spacerun: yes'> Credit unions have also joined in the
fight,
according
to industry
lobbyists.
class=MsoNormal>Since
its
introduction,
the bill
has gone
through
several
drafts,
which have
included
language
dealing
with abortion
clinics.
style='mso-spacerun: yes'> The controversial provision was
recently removed
and the
White House
has
threatened to
veto the
bill if
the
language preventing
abortion
protesters
from
escaping fines
by
declaring bankruptcy
is not
included.
Several senators
said last
week that
they would
like
to attach
the bankruptcy
overhaul
to the
Transportation appropriations
bill (H.R.
4475)
while
House and
Senate
Republican
leaders
agreed they
would
attach a reauthorization
of the
Violence
Against
Women Act
(H.R.
1248, S. 2757)
to the
bankruptcy
bill.
style='mso-spacerun: yes'> The White House is against the
decision.
class=MsoNormal>Clinton
Not
Satisfied with
New
Bankruptcy Legislation
President
Clinton
still
isn't satisfied
with
legislation
that would
rewrite
the
bankruptcy laws,
believing
that recent
revisions
don't
go far
enough to
make it
fair to
ordinary
debtors,
according
to a newswire
report.
style='mso-spacerun: yes'> Clinton, who supports in principle
overhauling
the
bankruptcy laws,
threatened
twice
in June to
veto
the
legislation
as
written. Changes
made since
then
by
lawmakers aren't
sufficient
to overcome
"the
president's
continued
concern
with the
imbalance...
between
the interests
of
creditors and
debtors," National
Economic
Adviser
Gene
Sperling said
in a
letter to congressional
leaders
late Friday.
Sperling
said Clinton
is
"deeply
troubled" that
the latest
bankruptcy
proposal
does not
include a
Senate-passed
provision
that would
prohibit
people
found to
have violated
laws
protecting
abortion
clinics
from using
bankruptcy
proceedings to escape
fines and
civil
judgments.
style='mso-spacerun: yes'> Sperling's letter said that in
addition to
specific
provisions,
Clinton
also objected
to the
overall legislation
as
written.
But
Sen.
Charles
Grassley
(R-Iowa),
a major
sponsor of
the legislation,
said that
when Clinton
sees the
proposal,
"with
all the
concessions we've
made and
the level
of support
we have"
among
Democratic
lawmakers,
"I
think
he'll see
that it's
fair and
balanced".
The
legislation
would
apply new
standards
for determining
whether
people filing
for
bankruptcy should
be forced
to repay
their
debts under
a
court-approved
reorganization plan
instead of
having
them
dissolved.
style='mso-spacerun: yes'> Proponents, including banks, credit
card companies
and other
consumer-credit
businesses, maintain
it is
needed to
stem a
growing tide
of
personal bankruptcies
and abuse
of the
bankruptcy
court
system.
Banks, savings
and loans,
credit
card
companies and
other
consumer finance
businesses
spent
some $6
million
on
donations to
political
candidates
and
party-building
activities
between
Jan. 1 and
June
30,
according to
the
good-government
group
Common Cause.
The total
included
$1.7
million from
the five
U.S. banks
with the
biggest
credit-card businesses:
Citigroup,
Bank
One/First
USA, MBNA,
Bank of
America
and Chase
Manhattan.
Bid to
Rein
In
Subprime Lenders
Hits
Roadblock
Despite the
discussions about
how
predatory lending
hurts
minorities
and the
elderly,
community
and consumer
groups
pushing for
new
legislation
and
increased regulation
of
so-called subprime
lenders in
the mortgage
lending
industry
have
little to show
for it,
according
to The
Legal
Times.
style='mso-spacerun: yes'> Furthermore, the only viable proposal
being
pushed by
consumer
groups —
that the
Federal
Reserve,
the Office
of the
Comptroller of the
Currency,
and the
Department
of Housing
and Urban
Development
crack down
on abusive
lending
practices
— is
gaining little
momentum.
While there
is growing
support
for
increased regulation
from the
Federal
Reserve,
the banking
lobby’s
argument
that
increased regulation
would
result in
less
credit being
extended
to homeowners
in low- to
moderate-income
neighborhoods has
persuaded
key legislators
to tread
cautiously.
Subprime
lenders
generally
offer
high-interest loans
to
borrowers with
weak
credit ratings,
and many
of the
lending
institutions
are
subsidiaries
of the
United States’
largest
bank holding
companies,
which
include
Citigroup
and the
Chase Manhattan
Corp.
Write
Andrews Jr.,
a lobbyist
for the
National
Home Equity
Mortgage
Association,
said, “If
you look
at the
existing
laws, you
would
find that
they cover
existing
abuses.”
The
Fed,
usually
reluctant
to
interfere with
the free
market
system,
doesn’t
appear to
be ready
— or
willing — to
take the
reins on
curbing
predatory
lending
practices.
“I
wouldn’t
say that
we consider
ourselves
the lead
[regulator] on this,”
said Rose
Pianalto,
a
spokeswoman for
the
Fed.
Last
month, Sen.
Phil Gramm
(R-Texas)
delivered
a major
blow to
consumer
groups,
indicating
that he
would not
be in
favor of addressing
predatory
lending
again
until the
term is
better defined
and the
lawmakers
can gauge
how widespread
abusive
practices
really
are.
“There’s
nothing
about predatory
lending
that sets
it off
from plain
old
fraud,” said
Christi
Harlan,
a
committee spokeswoman,
adding
that lately
“there’s
more noise
than push”
on the
issue.
Late
Bills Reduced
As Jobs
Increase
Fewer
Americans
were late
making
credit card
and home
equity payments
in the
second quarter,
according to
The
Washington
Times.
style='mso-spacerun: yes'> In a recent report by the American
Bankers Association
(ABA),
economists
said the
drop in the
credit card
delinquency
rate to its
lowest
point in
five years
is a
reflection of
the low
unemployment
rate.
style='mso-spacerun: yes'> But rising delinquencies among other
types
of loans,
including
auto and
home improvement,
show rising
interest
rates are
hitting
some
consumers hard.
The
number
of credit
card bills
paid late in
the quarter
that ended
June 30
fell to 2.99
percent
of all
accounts, down
from 3.28
percent
the previous
quarter.
style='mso-spacerun: yes'> The last time delinquencies were that
low was
in the last
quarter
of 1994,
when the
rate was
2.93 percent.
style='mso-spacerun: yes'> Past-due payments on open-end home
equity lines
of credit
fell even
more
dramatically
to 1.06
percent, the
lowest rate
since
the ABA
began measuring
home equity
delinquencies
in 1983.
In
seven of
eight categories
the
association
examines
for its
composite
figure
James
Chassen, chief
economist
for the
ABA, said
credit
delinquencies rose
to 2.3
percent from
2.14
percent last
quarter.
style='mso-spacerun: yes'> Those categories include direct auto,
indirect
auto,
personal home
improvement, reaction
vehicle,
mobile
home and
marine
loans.
Only closed-end
home
equity loan
delinquencies decreased.
class=MsoNormal>Mark
Vitner,
vice president
and
economist for
First
Union Corp.,
said banks
have
been
tightening
loan
standards to
brace for
a slowing
economy,
which also
could
account for
the
decreased rate.
style='mso-spacerun: yes'> The Office of the Comptroller of the
Currency
reported
last Wednesday
that banks
are loosening
standards
for large
syndicated
and home
equity
loans, though
there has
been modest
tightening
in commercial
and retail
loan
requirements.
class=MsoNormal>Dyersburg,
14 Units
File for
Chapter 11
Protection
style='font-weight:normal'>
Textile
manufacturer
Dyersburg
Corp.
and 14 of
its affiliates
sought
chapter 11
protection
yesterday
in the
U.S. Bankruptcy
Court in
Delaware,
according
to a Reuters
report. Dyersburg listed assets of $314.9 million and debts of
234.8 million.
The
largest of
20 unsecured
claims
listed is
for 9.75
percent
senior
subordinated
notes with
a face
value of
$125 million.
State
Street Bank
&
Trust Co.
of
Hartford, Conn.
is the
indenture
trustee.
The
remaining
unsecured
claims
are trade,
with
each one
less than
$1
million.
The
company
also said
last month
that
current bank
lenders
agreed to
extend an
existing
$74
million revolving
credit
facility
and roll
over a
$23
million term
loan.
class=MsoNormal>Stage
Stores
Announce
Extension
of Exclusivity
Stage
Stores Inc.
yesterday
announced
that the
U.S. Bankruptcy
Court for
the Southern
District
of Texas
approved
the company's
request to
extend
the
exclusivity
period in
its bankruptcy
proceeding
until
March 31,
2001,
according
to a newswire
report.
Stage Stores
Inc.,
based in Houston,
is a
retail store
that
currently operates
stores
under the
Stage,
Bealls and
Palais
Royal names.
class=MsoNormal>Texas
Reaches
Privacy
Settlement
with
Living.com
The State
of Texas
said
yesterday it
had
reached a settlement
with
bankrupt Internet
furniture
retailer
href='http://Living.com'>Living.com
that aims
at preventing
the sale
of customer
lists
without the
consent of
the customers,
according
to a Reuters
report.
Texas Attorney
General
John Cornyn
filed the
proposed
settlement
agreement
in U.S.
Bankruptcy
Court in
Austin
after
raising privacy
concerns
with Living.com's
bankruptcy
attorneys
about the
possible
sale of
customer
information.
href='http://Living.com'>Living.com
had a
privacy policy
that
stated it would
not sell
customers'
personal
information
without
their consent,
but that
it might
do so in
the future
unless
customers
sent an
e-mail to
block the
sale of
their
data.
href='http://Living.com'>Living.com,
based in
Austin,
filed for
chapter
11 Aug. 31
after
halting
its business
operations
a few
weeks
earlier.
If
approved
by the
bankruptcy
judge, a
court-appointed
bankruptcy
trustee
will
oversee destruction
of
customer data
such as
credit card,
bank
account and
social
security
numbers.
Strouds
Puts CEO
On Leave
Home
products retailer
Strouds
Inc., amid
chapter 11
bankruptcy,
said
yesterday Chairman
and Chief
Executive
Officer
Charles Chinni
has been
placed on
a paid leave
of absence,
according to
a newswire
report.
style='mso-spacerun: yes'>
In a
statement,
Strouds said
the action
was taken
“by mutual
agreement,”
and Chinni
will remain
on leave
“pending
review of
the status
of his
employment
contract.”
style='mso-spacerun: yes'> The company announced that it filed
for chapter
11 on Sept.
9 and
that it
would close
nine of its
70 stores
while it
reorganizes.
Strouds,
based
in City of
Industry,
Calif.,
operates
more than
60 stores
selling
bed, bath
and home
textile
products.
The
company
appointed
turnaround
specialist
John
Brincko as
interim
president
and chief
executive
officer
and
founder Wilfred
“Bill”
Stroud Jr.
as acting
chairman.
Strouds also
reinstated
Gary
Van Wagner
as chief
financial
officer,
succeeding
Thomas
Hanlon who
had been
interim
CFO.
