Sunday, March 06, 2005


From Slacktivist, via Talking Donkeys:
"Moral bankruptcy (cont'd.)

Kevin Drum offers a rundown of the proposed Democratic amendments to the Senate version of the bankruptcy bill -- all of which got shot down by the Republican majority. They're things like improved disclosure of credit card fees, efforts to prevent seniors from losing their homes or to protect veterans from the most punitive measures of the bill.

None of these amendments would have lessened the bill's purported effect of preventing bankruptcy "abuse," so Kevin asks a pertinent question: "If stopping abuse were truly your primary goal, why would you vote against amendments like these?"

Jonathan Chait opts for the simplest, most obvious answer: because the bill has nothing to do with stopping bankruptcy "abuse" -- it's really just a means of helping the credit card banks to confiscate even more of the income and assets of their "customers." Here's Chait's summary of the bill, in an L.A. Times piece titled "When Democrats Join the Dark Side":

This is one of those abysmal pieces of legislation that exists only because businesses with a vested interest in it have lobbied hard for its passage and that would have no chance of success if more than a tiny fraction of the public were aware of its existence.

Bankruptcy filings have risen slightly in recent years. Credit card companies argue that it's because people are gaming the system, going on irresponsible spending binges and then using bankruptcy to stick their creditors with the bill.

The more likely explanation is that the rise in health insurance costs has driven more people into bankruptcy. A recent Harvard study found that half of Americans who declared bankruptcy did so because of illness or medical bills. Regardless of why you go bankrupt, though, the new bill would make it easier for creditors to seize your assets. Nice, huh?

This isn't to say there aren't abuses in the bankruptcy system. There are. The bill simply does nothing to stop them.

I would imagine that many Republicans don't like Chait's title. If you are a Republican, and you don't like people referring to your party as "the Dark Side" -- as in the evil side, as in the Bad Guys -- then your next step is simple: stop supporting evil legislation like this predatory bankruptcy bill. That's a lot easier than trying to defend whorish little favors for donors like this, especially when the effect of this bill will be real, serious harm and hardship for many Republican constituents.

Is "evil" too strong a word? Consider another failed amendment to the bill. The title of this AP report (via Dr. Alterman) puts it plainly: "Senate refuses to limit interest rates at 30%."

30 percent! That's not even a cap, that's a stratosphere. Yet supporters of this bill thought that was too restrictive for the credit card industry. Peter G. Gosselin has more details in another L.A. Times article:

Debate about the bill continued Thursday, with the Republican-controlled Senate refusing to limit consumer interest rates to 30 percent. The vote was a bipartisan 74 to 24 to kill a proposed amendment by Sen. Mark Dayton (D-Minn.). Senate passage of the bill is expected next week.

Pop quiz: Name all the major religions, cultures and/or civilizations that have condoned the charging of 30 percent or greater interest on loans.

Give up? Me too. Yet here we have 74 U.S. senators disagreeing with, well, all of human history and embracing blatant, egregious usury. Is "evil" too strong a word? Here's a case study from Gosselin's article which, by the way, is titled "Credit Card Firms Won as Users Lost: They ... make money even on people who went bankrupt."

In Cleveland, a municipal court judge tossed out a case that Discover Bank brought against one of its cardholders after examining the woman's credit card bill.

According to court papers, Ruth M. Owens, a 53-year-old disabled woman, paid the company $3,492 over six years on a $1,963 debt only to find that late fees and finance charges had more than doubled the size of her remaining balance to $5,564. ...

Judge Robert Triozzi ruled that Owens didn't have to pay, saying she had "clearly been the victim of [Discover's] unreasonable, unconscionable and unjust business practices."

Now 74 senators have sided against Judge Triozzi. They want to make it easier for Discover and MBNA and all their ilk to continue these "unreasonable, unconscionable and unjust business practices." They want to make sure that these creditors will not only be able to collect $10,000 on a $1,963 loan, but also be able to repossess the disabled debtor's house.

Evil is not too strong a word."


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