Civil Rights Coalition Calls on House to Reject Discriminatory and Unfair Bankruptcy Legislation

WASHINGTON – Citing its grossly discriminatory and unfair provisions, the Leadership Conference on Civil Rights (LCCR), the nation’s oldest, largest and most diverse civil and human rights coalition, today called on members of the House of Representatives to vote against H.R. 975, the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2003.”

“This legislation is designed to make it more difficult for older Americans, divorced women, and African American and Hispanic homeowners to file for bankruptcy,” said Wade Henderson, LCCR executive director.

In a letter (attached) sent to all House members, LCCR argues that H.R. 975 proposes a number of changes to make it harder for persons to seek bankruptcy protection, changes touted by supporters as being necessary to stop the abuse of bankruptcy laws. LCCR’s letter points out that “a majority of those who file are working families who are not abusing the system, instead they have experienced financial catastrophe. H.R. 975 would make starting over virtually impossible.”

“Why is the House leadership targeting older Americans who file for bankruptcy in disproportionately high numbers, usually after being pushed out of jobs, encountering discrimination in hiring, or being victimized by credit scams or home improvement frauds that put their homes and security at risk?” Henderson asked.

“Why is the House leadership targeting divorced women who are 300 percent more likely than other women to file for bankruptcy due to the cumulative effects of lower wages, reduced access to health care, the devastating consequences of divorce, and the disproportionate financial strain of rearing children alone?” continued Henderson.

“And, finally, why is the House leadership targeting African American and Hispanic American homeowners who often seek bankruptcy protection after being victimized by discrimination in home mortgage lending and housing purchases, or after facing inequalities in hiring opportunities, wages, and health insurance coverage,” Henderson asked.

“Instead of going after the victims, the proponents of this legislation ought to be clamping down on unscrupulous credit card companies and predatory lenders who prey on vulnerable older Americans and minorities,” said Henderson. The LCCR letter noted that credit card companies issued four billion solicitations to consumers in 2002. “But these companies,” Henderson continued, “have continued to fight off any reforms that might help prevent consumers from becoming trapped in severe debt in the first place, such as requiring clearer disclosure about late payment fees, interest rates, and minimum payments.”

LCCR takes a special interest in the issue of bankruptcy reform because disadvantaged groups in our society disproportionately find themselves in bankruptcy courts as a result of economic discrimination in its many forms, meaning that such groups would be hit the hardest by new legislation designed to make it harder for people to seek relief. “H.R. 975,” Henderson continued, “is a bad bill that will hurt those it should be helping.”

“LCCR has opposed bankruptcy reform proposals similar to H.R. 975 every year since 1998,” the letter concluded. “Sadly, bankruptcy reform proponents are now pushing legislation that is every bit as flawed as previous legislation and, given today’s slow economy, would lead to even more inequitable results.”

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