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This news summary is designed to serve as a supporting research for policy briefings on the bankruptcy reform bills now under consideration by the U.S. Congress.
June 29, 1998
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8/13/97 Associated Press "Critics blast unsolicited ‘live’ loans sent via mail; lenders using the new tool to turn higher profits"
Critics say they are a rip-off because of high interest rates and also could lead to fraud if someone else diverts and cashes them….Signet signed up nearly $1 billion in the past 18 months.
10/10/97 Washington Post "On Balance, a Credit Card Squeeze; Issuers Drop Customers Who Pay-in-full"
Ultimately, issuers would like to shift convenience users to debit cards while eliminating the grace period for credit purchases – meaning that interest is charged from the date of purchase, even if the bill is paid promptly.
- Robert B. McKinley, Ram Research Group (credit card research firm)
12/08/97 WTimes "Creditors Bank on Congress to Tighten Bankruptcy Rules; Banking groups have stepped up political contributions"
Bankers…have contributed about $722,000 in federal campaigns this year…That was after the American Bankers Association already had spent $1.7 million.
1/7/98 WSJ "This Family Deserves Much Credit, Though Why Isn’t Exactly Clear"
Since last January, Mrs. Oeker has noted on the chart every credit card solicitation any member of her family has received. All told in 1997, the Oeker family was offered $4.9 million in credit.
1/22/98 American Banker "GAO Disputes Card Groups’ Data on Bankruptcy Reform"
The GAO says, VISA’s assumptions about debtors’ financial conditions were not validated; the debts that debtors were said to be able to pay were not clearly defined.
4/27/98 New York Times, op/ed by Elizabeth Warren, "Bankrupt? Pay Your Child Support First
Last year, some 300,000 bankruptcy cases involved child support, alimony or another form of family maintenance. In about half of the cases, women were creditors trying to collect court-ordered support from their former spouses…When it comes to paying off debt, women and children should come first.
5/17/98 Washington Post "How Credit Card Issuers Fuel Over-Borrowing
Credit card issuers mailed out 3.1 billion solicitations last year – 30 for every American household. When there’s over-borrowing, lenders are equally to blame.
6/8/98 Los Angeles Times, editorial, "Bankruptcy Non-Reform"
The credit card industry has hijacked efforts to reform bankruptcy laws…this is no reform, and consumers should let lawmakers hear about it
6/14/98 Washington Post "Credit Due vs. Undue Credit"
The contrast between the lobbyists’ sermonizing concern and their companies’ eager come-on speaks to one of the many hypocrisies underlying the heated debate this spring in Congress about the reform of bankruptcy law…The assumption that the rest of us will be $400 richer thanks to the House bill…is misleading.
6/16/98 Arlington Journal "Credit Card Companies giveth, and now they want to taketh away"
Most people I see honestly incurred their debts and honestly tried to pay them. But then something happened – a divorce, a job loss, uninsured medical bills – and they suddenly found themselves going under. They’re not brazen about it. They’re embarrassed…It’s interesting that the demand to make bankruptcy harder is coming from those who made getting in debt so easy.
6/17/98 WSJ, "As Bankruptcies Surge, Creditors Lobby hard to Get Tougher Laws; But Whether Many People Shirk bills They Can pay Remains Open to Debate"
Though the commission concluded that creditors are as likely to abuse the…system… the current House bill contains no significant limits on creditors… "….What’s really lost…is the responsibility of the credit card industry" for fueling the surge in bankruptcies, Sen. Dick Durbin, D-Ill., says. "This bill was written by a lot of people who have very special interests to protect"
6/20/98 WSJ, op/ed by Molly Ivins, "Gotta give ‘em credit on Legislation"
What a perfect pattern card this bill is for special interests – a veritable how-to manual for those who want to change the law so they can cash in…Why are more people taking bankruptcy?…Because the credit care companies have been pushing credit cards on economically marginal citizens in a way that makes crack pushers look like pikers.
