Legal Commentary

Senate Rejects Bankruptcy Relief For Homeowners

By TChris

It's unfortunate that the Obama administration was unable (and apparently unmotivated) to win Senate approval of a proposal to allow bankruptcy courts to modify the terms of mortgage notes.

In recent weeks, major banks and bank trade associations worked closely with Senate Republicans to stop the measure. Twelve Democrats joined all the Republicans in voting against it.

Relief for troubled financial institutions: no problem. Relief for financially troubled homeowners: can't do it. Way to go, Dems.

Soon we'll learn whether the financial industry has enough Senate clout to kill another bill favored by the Obama administration (and about which the administration has been more vocal). The bill, passed yesterday by the House and popular with just about everyone who carries a credit card, would limit credit card interest rates and fees while "requiring banks to apply consumers’ payments to balances with the highest interest rates first." [more ...]

A relatively simple provision of the bill, if enacted, will make life easier for credit card users who prefer not to pay their balances with electronic funds transfers. It would "require statements to be mailed at least 21 days before the payment due date, up from 14 days." Taking a two week vacation risks missing a credit card payment under current law.

Full post as published by TalkLeft on May 01, 2009 (boomark / email).