The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 is a bad piece of legislation that’s floated around for years. It’s a complete wet dream for the Credit Card Industry, and it raises the hackles of consumer advocates all over the country. Put simply, it makes it much much more difficult for individuals to file for bankruptcy when they’re caught in the doom-spiral of debt.
The rationale for the bill (unchanged since the first versions were floated in 2003) is that lots of people, scandalous libertines that they are, enjoy lives of wanton excess. They run up bills with caviar and furs only to leave poor, overworked credit card companies with the check – escaping the consequences of their actions via bankruptcy laws. Clearly, eliminating the loopholes and preventing these abuses is essential! coughwelfarequeenscough This is horse shit, plain and simple. Others have dissected the flaws in the bill’s various incarnations, and its record should speak for itself. While irresponsible spending is bad the recent increase in bankruptcies our country has seen since the 90’s has little to do with irresponsible consumers and a lot to do with the credit industry’s eagerness to extend credit to risky people, then hit them for exorbitant fees when they can’t pay the debts back. This is generally known as “predatory lending” and as a Christian, I find it especially troubling. Scripture condemns the process (remember “usury?”) and even the Old Testament, hardly a progressive document by today’s standards, mandates regular economic redistribution to prevent cycles of poverty and indebtedness.
The Washington Post published an interesting little anecdote on Sunday that highlighted the problem:
For more than two years, special-education teacher Fatemeh Hosseini worked a second job to keep up with the $2,000 in monthly payments she collectively sent to five banks to try to pay $25,000 in credit card debt. Even though she had not used the cards to buy anything more, her debt had nearly doubled to $49,574 by the time the Sunnyvale, Calif., resident filed for bankruptcy last June. That is because Hosseini's payments sometimes were tardy, triggering late fees ranging from $25 to $50 and doubling interest rates to nearly 30 percent. When the additional costs pushed her balance over her credit limit, the credit card companies added more penalties. "I was really trying hard to make minimum payments," said Hosseini, whose financial problems began in the late 1990s when her husband left her and their three children. "All of my salary was going to the credit card companies, but there was no change in the balances because of that interest and those penalties." Punitive charges -- penalty fees and sharply higher interest rates after a payment is late -- compound the problems of many financially strapped consumers, sometimes making it impossible for them to dig their way out of debt and pushing them into bankruptcy.
The industry makes its money on people who run up large balances and have trouble paying them off. Whether this is due to dumb spending patterns, emergency medical bills, a broken marriage, or identity theft is irrelevant: the industry wants to make a profit, and high-risk people are the best way to make a profit. Rather than changes its lending patterns, the industry has lobbied congress for years to make credit card debts unprotected – in other words, they want credit card debt to be bankruptcy-proof, following debtors around until the sun burns out.
That’s exactly what the ironically-named “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005” does.
The real beauty of it, though, is the bill’s sponsor, Chuck Grassley. He’s got a conservative voting record on moral issues like gay marriage, abortion, and sex education. He talks a strong game on this front – he’s a member in good standing of The Family, a creepily named Washington group that melds Christian language with conservative nationalism and hides itself behind a veil of media-hostile secrecy. With this strong moral foundation, Grassley should be very sensitive to concerns about Biblical standards, right? Not quite.
This gem just in from the Des Moines Register:
A national group of Christian lawyers is appealing to church leaders to join them in lobbying against the bankruptcy reform bill introduced by Sen. Chuck Grassley, R-Ia. The lawyers say the legislation runs contrary to the forgiveness of debt and charity required by the Bible. "As Christian attorneys, we strongly believe that it was never God's intention to create a society where indebtedness was a crime or a badge of dishonor," Christian members of the National Association of Consumer Bankruptcy Attorneys wrote in a letter sent Feb. 26 to hundreds of church leaders across the nation. The lawyers note that in the Old Testament, God did not outlaw borrowing and lending, but provided that loans would become discharged every seven years. In response, Grassley said Congress could not be bound by biblical mandates because "the Constitution does not provide for a theocracy." "I can't listen to Christian lawyers because I would be imposing the Bible on a diverse population," Grassley said. "I'll bet those lawyers wouldn't want us to impose the principles of forgiving debt every seven years. If that were the law, nobody would loan them money."
This isn’t shocking to me. Despite Grassley’s moral fortitude on popular Christian hot-buttons, he’s jumped at every chance to screw individuals since he was elected in 1980. He’s voted against eliminating the “marriage penalty” for married taxpayers. He’s voted to repeal safety standards for assembly-line workers. He’s voted to limit appeals in death-penalty cases, even when new evidence may prove the innocence of those on death row. He voted against minimum wage increases. He… well. You get it.
Grassley is quite happy to demolish Church-state lines when it favors his political career. He’s thrown his support behind new legislation that would allow churches to endorse political candidates without losing their tax-exempt status. But when it comes to bankruptcy legislation, he knows which side his bread is buttered on. The credit industry, and MNBA in particular, is one of the GOP’s largest campaign donors, and when they come calling Grassley answers. When their exploitative business model is threatened, society’s morality and compassion runs a distant second. “I can’t listen to Christian lawyers,” he says, “because I would be imposing the Bible on a diverse population.”
Remember this, Christians. Remember this moment and remember it good.
You are tools in a political game, and you are fools if you believe otherwise.