Bankruptcy Reform Could be Off to Fast Start

News Now
January 26, 2005

WASHINGTON (1/24/05)—The Senate this week is expected to introduce Credit Union National Association (CUNA)-backed legislation passed by the House last year that would reform bankruptcy laws in the U.S.

Sen. Charles Grassley (R-Iowa) is expected to introduce the bill today or tomorrow, according to CUNA Senior Vice President of Governmental Affairs John McKechnie. He indicated that it would similar to a bill passed by the House last year, except it would not include the controversial Sen. Charles Schumer (D-N.Y.) amendment on abortion clinic violence.

CUNA strongly supports the passage of a bankruptcy abuse reform bill. CUNA's top three priorities in bankruptcy abuse reform legislation are:

· Protecting the ability of credit union members to voluntarily reaffirm their debts with their credit unions · Inclusion of a meaningful "means test” · Inclusion of mandatory financial education provisions

At the same time, CUNA recognizes that bankruptcy is a legitimate way for many who truly need an extraordinary means to address their indebtedness, according to McKechnie. He said the fact that the Senate rather than the House is moving first is reason for optimism. "In the past several years, the House has taken the lead and done the work to keep the bill moving forward," he said. "This year we are seeing a newfound interest on the part of the Senate to take the initiative." The activity in the Senate was not unexpected. CUNA lobbyists had heard from Hill sources in November that negotiations between House and Senate proponents of the legislation had resulted in a decision to let the Senate proceed first.

First published in the CUNA News Now-Washington section on the CUNA website.