White House Agenda Misses Credit Card, Bankruptcy Reform
Jan 22nd, 2009 | By Rob | Category: Government
The new White House website has President Barack Obama’s agenda. I took a few minutes to peruse it and didn’t see bankruptcy reform or debt relief among the major issues listed. So I did a bit of digging, and here’s what I found.
From the overview of the page on family, it says Obama will “reform our bankruptcy and credit card laws”.
From the bulletpoints on the page on urban policy, Obama will:
- “Cap Outlandish Interest Rates on Payday Loans and Improve Disclosure: In the wake of reports that some service members were paying 800 percent interest on payday loans, the U.S. Congress took bipartisan action to limit interest rates charged to service members to 36 percent. President Obama and Vice President Biden believe that we must extend this protection to all Americans, because predatory lending continues to be a major problem for low and middle income families alike.”
- “Encourage Responsible Lending Institutions to Make Small Consumer Loans: Some mainstream, responsible lending institutions are beginning to enter the short-term lending market to provide many Americans with fair alternatives to predatory lending institutions. President Obama and Vice President Biden will work with his Secretary of the Treasury and the Federal Deposit Insurance Corporation to encourage banks, credit unions and Community Development Financial Institutions to provide affordable short-term and small dollar loans — and to drive the sharks out of business.”
There are other portions that will effect the financial health of Americans, such as the tax cut, the stimulus package, the minimum wage increase, affordable health care, and incentives for retirement saving.
While ending predatory lending is important, I was disappointed about the lack of prominence of a proposal to provide credit card debt relief or bankruptcy reform. I know that Obama campaigned on issues regarding credit card reform and bankruptcy, so I went to his campaign website to see what’s changed. Here’s three issues that have been dropped from Barack Obama and Joe Biden’s Blueprint for Change pdf brochure campaign plan as it was transferred to the White House website:
- “Reform Bankruptcy Laws to Protect Families Facing a Medical Crisis: More than half of all personal bankruptcies today are caused by medical bills. Barack Obama and Joe Biden will protect workers who fall into personal bankruptcy as a result of a medical crisis. Current law, which Obama opposed in the 2005 bankruptcy bill, provides too many families with inadequate relief when faced by an unforeseen medical crisis. Obama and Biden will create an exemption from the new law’s requirement that middle class families extend their debts rather than have them forgiven. If a person can demonstrate to the satisfaction of the bankruptcy court that the reason they filed for bankruptcy was a result of debts incurred through medical expenses, then Obama believes they should be relieved of that debt through a process that lets them get back on their feet.”
- “Create a Credit Card Rating System to Improve Disclosure: Obama and Biden will create a credit card rating system, modeled on five-star systems used for other consumer products, to provide consumers an easily identifiable ranking of credit cards, based on the card’s features. Credit card companies will be required to display the rating on all application and contract materials, enabling consumers to quickly understand all of the major provisions of a credit card without having to rely exclusively on fine print in lengthy documents.”
- “Close Bankruptcy Loophole for Mortgage Companies: While investors who own multiple homes and people with vacation homes can renegotiate those mortgages in bankruptcy, current Chapter 13 law requires ordinary families to stick with the original terms of their home loans—regardless of whether the loan was predatory or unfair. Obama and Biden will repeal this provision so that ordinary families do not suffer this unfair treatment.”
Obama’s support for the Credit Card Bill of Rights is also missing, but I think that is understandable given the adoption of the Federal Reserve regulations. Hopefully, President Obama is still formulating a plan for debt relief and bankruptcy reform in light of the new credit card regulations and has yet to announce it. I don’t have a problem with him waiting until after the consideration of important measures such as the economic stimulus package and measures to stabilize the banks are completed to introduce into the debate more credit card laws.
Yet, I’m still concerned that these important portions of his agenda have simply been lost in the transition from the campaign website to the White House agenda. Does it signal a rethinking of these initiatives or am I simply making too much of it?
Was the credit card lobby not a major sponsor of Biden and indeed Obama?
[...] of government-led credit card reform. Earlier this year, I noted that credit card reforms were noticeably absent from the President’s website, Whitehouse.gov. Now, his plan for “cracking down on [...]