106

Rep. Rick Boucher (D-Va.)
Click here to email Congressman Boucher
'The typical American family pays a hidden tax of $550 each year because of increased charges for credit and higher prices for goods and services attributed to bankruptcies of mere convenience.
Web posted and Copyright © February 25,
1999, American Bankruptcy Institute.

Statements Made Upon the Introduction of the

"Bankruptcy Reform Act of 1999"

February 24, 1999

Congressmen*

Rep. Rick Boucher (D-Va.)

Click
here to email Congressman Boucher

"The typical American family pays a hidden tax of $550 each year because of
increased charges for credit and higher prices for goods and services attributed to
bankruptcies of mere convenience.

"Bankruptcies of convenience are driving this enormous increase. Bankruptcy was
never meant to be used as a financial planning tool, but it is becoming a first stop
rather than a last resort because our current bankruptcy system encourages people to walk
away from their debts regardless of whether they have the ability to repay any portion of
what they owe."

Rep. Steve Chabot (R-Ohio)

"We probably would have passed this bill in the last Congress but essentially ran
out of time."

Rep. George Gekas (R-Pa.)

"Our bill then and now provides for the fresh start that is required for the
individual and family that finds itself in financial bedlam that they have no choice by to
get a fresh start.

"With the overwhelming margin voting in favor of the bill, it could not be
anything but a bipartisan result."

Rep. Henry Hyde (R-Ill.)

"Our nation’s bankruptcy system is one of the world’s most progressive,
and we must keep it that way. ... Congress must confront the [bankruptcy] issue directly
and curb abusive and predatory practices of those who would game the system."

Rep. Sheila Jackson-Lee (D-Texas)

Click
here to email Congresswoman Jackson-Lee

"This is old legislation that has risen its unseemly head. ...The bill
doesn’t deal with the constant pounding of credit card opportunities and the
opportunity for debt.

"The constituents used to support this legislation last year need to really wake
up and find out if this is the way you want to go."

Rep. Bill McCollum (R-Fla.)

Click
here to email Congressman McCollum

"Bankruptcy will cost consumers more than $50 billion in 1998 alone. That
translates into over $550 per household in higher costs for goods, services and credit. If
we do not make reforms now, responsible borrowers and consumers will continue to pay the
prices in the form of higher costs for goods, services and credit."

Rep. Jim Moran (D-Va.)

Click
here to email Congressman Moran

"The current bylaws are in dire need of reform. ... No one’s rights will be
taken away; a judge will always make the final call on all of these matters.

"[Bankruptcy] should not be an easy way to pile up debts people have no interest
paying on."

Rep. Jerrold Nadler (D-N.Y.)

Click
here to email Congressman Nadler

"This bill would still allow credit card companies to have their debts survive
bankruptcy and force children to compete with the credit card companies for the
debtor’s post-bankruptcy income–something they do not have to do now.

"The bill uses an inflexible, one-size-fits all formula for deciding how much
families can repay, which relies on guidelines written by IRS bureaucrats for an entirely
different purpose.

"This bill is the purest case study of why we are in need of campaign finance
reform."

Rep. Pete Sessions (R-Texas)

Click
here to email Congressman Sessions

"Companies, banks, credit unions and other financial institutions who loan money
to people do that with the expectation that the person is going to pay back that which
they have taken. ... Reasonableness is what this bill is all about.

"The Rules Committee is aware of this bill and we’ll shepherd than on through
very quickly."

Rep. Ellen Tauscher (D-Calif.)

Click
here to email Congresswoman Tauscher

"There are two reasons why it is important to pass this bill: 1. It is important
to show the American people that we can work together. ... 2. It’s important to show
the American people that we can fix a law prejudiced against people who clearly want to do
the right thing."

*While not all Congressmen have email
addresses, communications can be sent to them by U.S. mail, care of

U.S. House of Representatives

Washington, DC 20515

Organizations

Coalition for Financial Responsibility

"We support this bill because it embodies the principles of fairness and personal
responsibility. No one wants to take away the option of filing for bankruptcy by those who
have suffered a serious financial crisis and need the opportunity for a fresh start. This
bill will ensure that those individuals have access to the bankruptcy system just as they
always have.

"But the bill will also ensure that higher-income filers re required to repay what
they can afford."

Consumer Federation of America, Consumers Union and National Consumer Law Center

"This version of bankruptcy reform would be disastrous for American families with
financial problems. Instead, we urge you to consider a more targeted and balanced
approach, which ends abuse by debtors and creditors, while preserving meaningful access
for those in need of bankruptcy protection."

National Bankruptcy Conference

"Re-introduction of this omnibus bankruptcy bill is especially disappointing
because it disregards the policy concerns expressed by the Administration, over 20 groups
representing the interest of women and children, civil rights groups, and consumer
advocates, along with a variety of other groups."

National Retail Federation

"[The] legislation provides complete relief for those consumers who encounter
serious financial difficulties. However, the legislation would also ensure that those who
blatantly misuse the system to wipe out debts that they can afford to pay would not be
allowed to do so."

National Women’s Law Center and National Partnership for Women & Families

"Contrary to claims by some, the child support enforcement provisions included in
the bill do not adequately protect women and children. Although in some cases they will
simplify the procedures for collecting child support during bankruptcy, they do not
address the fundamental problems created by the bill: the fewer debtors will be able to
get their finances re-ordered in bankruptcy, that more non-child support debts will
survive bankruptcy and compete with the payment of child support, and that custodial
parents forced into bankruptcy will lose protections against eviction and other coercive
practices."

U.S. Chamber of Commerce

"[T]he bill would close a number of loopholes in current law that encourages
debtors to take advantage of the system and avoid paying their debts. This legislation
provides a fair needs-based system that takes debtors’ special circumstances into
account while assuring that those who can afford to pay are required to do so.

Individuals

Philip Strauss, Assistant District Attorney

Family Support Bureau for the City and County of San Francisco

"Congress, in working with the states, has closed all loopholes [to avoid
repayment of child support] but those permitted by [the bankruptcy process]. This bill
will keep family support out of the bankruptcy system.

"This bill will drastically improve the ability of people like myself to enforce
child support obligations while people are in bankruptcy."

To amend the Truth in Lending Act to prohibit the distribution of any negotiable check or other instrument with any solicitation to a consumer by a creditor to open an account under any consumer credit plan or to engage in any other credit transaction which is subject to such Act, and for other purposes.
Unsolicited Loan Consumer Protection Act (Introduced in
House)

HR 1576 IH

To amend the Truth in Lending Act to prohibit the
distribution of any negotiable check or other instrument with any
solicitation to a consumer by a creditor to open an account under any
consumer credit plan or to engage in any other credit transaction which
is subject to such Act, and for other purposes.

April 27, 1999

Mr. HINCHEY introduced the following bill; which was referred to the
Committee on Banking and Financial Services

To amend the Truth in Lending Act to prohibit the
distribution of any negotiable check or other instrument with any
solicitation to a consumer by a creditor to open an account under any
consumer credit plan or to engage in any other credit transaction which
is subject to such Act, and for other purposes.

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Unsolicited Loan Consumer
Protection Act'.

SEC. 2. UNSOLICITED CHECKS PROHIBITED.

(a) IN GENERAL- Chapter 2 of the Truth in Lending Act (15
U.S.C. 1631 et seq.) is amended by adding at the end the following new
section:

`SEC. 140. SOLICITATIONS FOR CONSUMER LOANS.

`(a) IN GENERAL- No consumer credit which is otherwise subject
to this title may be extended by any creditor through the use of a check
or other negotiable instrument which has been sent by the creditor to
the consumer in connection with a solicitation by the creditor for such
extension of credit, unless the consumer has submitted an application
for, or otherwise requested, such extension of credit before receiving
the check or instrument.

`(b) CONSUMER NOT LIABLE FOR ANY UNSOLICITED CHECK UNLESS THE
CONSUMER ACTUALLY RECEIVES AND NEGOTIATES SUCH CHECK-

`(1) IN GENERAL- If any creditor violates subsection (a)
and includes an unsolicited check or other negotiable instrument in a
solicitation to a consumer for an extension of credit which the consumer
has not applied for or requested, the consumer shall not be liable for
the amount of any such check or other instrument unless the consumer
actually receives and negotiates such check or instrument.'.

`(2) BURDEN ON CREDITOR- Notwithstanding any rule of
evidence or other provision of law--

`(A) the issuance of a check or other negotiable
instrument by a creditor in violation of subsection (a) creates a
rebuttable presumption that such check or instrument was not received or
negotiated by the consumer to whom it was issued; and

`(B) the burden of proof, in any action by a creditor
to enforce liability of the consumer for the amount of any such check or
instrument, shall be upon the creditor to show that such check or
instrument was received by the consumer and was negotiated by the
consumer with the knowledge that such negotiation was creating a
liability for such amount.

`(3) INFORMATION ON LIABILITY CREATED IN VIOLATION OF
SUBSECTION (a) MAY NOT BE REPORTED TO OR RECEIVED BY ANY CONSUMER
REPORTING AGENCY- No information on any liability alleged by a creditor
to have been established through the issuance of a check or other
negotiable instrument in violation of subsection (a) may be reported to
or received by any credit reporting agency (as defined in section 603 of
the Fair Credit Reporting Act) or included in any consumer credit report
under such Act.'.

(b) CLERICAL AMENDMENT- The table of sections for chapter 2 of
the Truth in Lending Act is amended by adding at the end the following
new item:

`140. Solicitations for consumer loans.'.

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To enhance competition between airlines and reduce airfares, and for other purposes.