Recipient: U.S. House of Representatives
March 18, 2003
On behalf of the Leadership Conference on Civil Rights (LCCR), the nation’s oldest, largest and most diverse civil rights coalition, we write to express our strong opposition to the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2003” (H.R. 975). We urge you to oppose H.R. 975 because it poses significant concerns for the economic self-sufficiency of all working people in the United States and will cause substantial financial inequities in the process.
The issue of bankruptcy reform is of profound concern to LCCR because, as a general matter, disadvantaged groups in our society disproportionately find themselves in bankruptcy courts as a result of economic discrimination in its many forms. For example:
- Divorced women are 300 percent more likely than single or married women to find themselves in bankruptcy court following the cumulative effects of lower wages, reduced access to health insurance, the devastating consequences of divorce, and the disproportionate financial strain of rearing children alone;
- Since 1991, the number of older Americans filing for bankruptcy has grown by more than 120 percent. This age group tends to file after being pushed out of jobs and encountering discrimination in hiring, which could result in loss of health insurance, or victimization by credit scams or home improvement frauds that put their homes and security at risk; and
- African American and Hispanic American homeowners are 500 percent more likely than white homeowners to find themselves in bankruptcy court largely due to discrimination in home mortgage lending and housing purchases, and to inequalities in hiring opportunities, wages, and health insurance coverage.
H.R. 975 proposes a number of changes in current bankruptcy law, and supporters claim that enactment is thereby necessary to stop abuse of bankruptcy laws. Yet 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.
In addition, hundreds of thousands of women and children who are owed child support or alimony would be harmed under H.R. 975, as it forces them to compete with credit card issuers and therefore would make it less likely that support payments will be made to those in need. H.R. 975 will also make it much more difficult for businesses to reorganize, thereby forcing them into bankruptcy and eliminating much needed jobs.
H.R. 975 also fails to address one of the key reasons that bankruptcy filings have increased in recent years – a reason that is the willful doing of many of the financial institutions that are lobbying in support of the bill – the aggressive marketing of credit cards to our most financially vulnerable citizens, such as women, students, seniors, and the working poor. According to the San Francisco Chronicle, credit card companies issued four billion solicitations last year in an ever-expanding campaign to saddle more Americans with debts that are especially difficult to pay given the current economic climate. (David Lazarus, A Deluge of Credit: S.F. Man Tallies Credit Card Offers – 217 Solicitations, SAN FRANCISCO CHRONICLE, Friday March 7, 2003 at B-1). Yet these same companies have steadfastly resisted even the most modest reforms to help consumers avoid placing themselves in financial jeopardy in the first place, such as requiring clearer disclosure about late payment fees, interest rates, and minimum payments.
LCCR has opposed bankruptcy reform proposals similar to H.R. 975 every year since 1998. 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. We strongly urge you to reject H.R. 975 because it would radically alter the bankruptcy system in a way that imposes hardships particularly on the most vulnerable among us. Since H.R. 975 is of critical concern to LCCR member organizations, we intend to include how Representatives vote on H.R. 975 in our voting records for the 108th Congress.
Thank you for your consideration. If you have any questions, please feel free to contact Nancy Zirkin, LCCR Deputy Director at (202) 263-2880 or Rob Randhava, LCCR Policy Analyst at (202) 466-6058.
Dr. Dorothy I. Height, Chairperson
Wade Henderson, Executive Director