CUNA's Letter to the Senate Urging the Passage of the Comprehensive Bankruptcy Reform Legislation
February 18, 2004
United States Senate Washington, DC 20510
On behalf of the Credit Union National Association (CUNA) and the nation's nearly 10,000 credit unions and 84 million credit union members, I am writing to urge the Senate to pass comprehensive bankruptcy reform legislation ((S. 1920/H.R. 975).
According to data released last November by the Administrative Office of the U.S. Courts, the total number of bankruptcy filings has increased by 98% to 1,661,996 (both personal and business) for the 10-year period ending Sept. 30, 2003, from 837,797 during the 10-year period ending Sept. 30, 1994. Personal bankruptcies have increased by 7.8% in the last year alone, according to the Administrative Office, jumping to 1,625,813 as of September 30, 2003 from 1,508,578 as of September 30, 2002.
As bankruptcies continue to reach record levels, credit unions are being subjected to an increasing number of abusive filings where individuals who clearly can pay part or all of their debt do not. As a result, credit unions are experiencing a steady stream of losses. While we recognize the importance of preserving the availability of bankruptcy for those who truly need a new start, the law must be changed as soon as possible to address the abusive bankruptcy filings. And according to several recent surveys, the public strongly favors a change in law to require those who can afford it to pay all or part of their debt.
Credit unions strongly support the "Bankruptcy Abuse Prevention and Consumer Protection Act of 2004" because it protects the ability of credit union members to voluntarily reaffirm their debts with their credit unions, includes a meaningful "means test," and includes mandatory financial education provisions. This is reasonable and balanced legislation that has been passed by both the Senate and the House in the last four Congresses by large margins.
Credit unions urgently need this legislation now. We urge your prompt action to enact this legislation.
Daniel A. Mica
President & CEO