Statement of Senator Dianne Feinstein on her Decision to Vote Against Bankruptcy Reform Legislation Based on New Creditors Judgements

Washington, DC – U.S. Senator Dianne Feinstein today voted against bankruptcy reform legislation outlined in Conference Report H.R. 2415, citing concerns that the legislation fails to protect consumers against irresponsible creditor practices. The following is the text of her statement:

Mr. President, I support bankruptcy reform, and I voted in favor of the Senate bankruptcy bill, this past February. Simply put, people who can afford to repay their debts, should repay their debts.

However, I cannot support the version of bankruptcy legislation outlined in the Conference Report to H.R. 2415. The Conference report has dropped key provisions from the Senate-passed bankruptcy bill, and has failed to protect consumers against irresponsible creditor practices. Thus, I intend to vote “No”.

Let me recount my concerns.

First, the Conference Report lets wealthy individuals continue to purchase multimillion dollar homes that are shielded from creditors’ bankruptcy claims. The Senate bill curbed this abuse, voting 76-22 to approve the Kohl amendment placing a $100,000 nationwide cap on homestead exemptions. The Conference replaced the Kohl amendment with a two-year ownership or residency requirement that wealthy debtors can easily sidestep. Debtors should not be able to avoid their obligations by funneling money into extravagant estates. The Conference Report lets this egregious practice continue.

Second, I am proud to be an original cosponsor of Senator Schumer’s amendment to prevent anti-abortion extremists from using bankruptcy laws to avoid paying civil judgements against them. The Senate passed the Schumer amendment by an overwhelming 80-17 vote. It protects a woman’s right to choose and the ongoing effectiveness of the Freedom of Access to Clinic Entrances (FACE) Act.

The FACE Act has led to successful criminal and civil judgements against groups that use intimidation and outright violence to prevent people from obtaining or providing reproductive health services. I am deeply disappointed that the Conference Report has omitted this important provision.

Third, I had hoped that the Conference Report would work to improve the limited consumer credit card protections in the Senate bill. Unfortunately, the Conference Report has gone the other way --- consumer protections have been deleted. For example, the Senate passed an amendment by Senator Byrd that would have required any credit card solicitation on the Internet to be accompanied by information from the Federal Trade Commission (FTC) that gives consumers advice about selecting and using credit cards. The Conference Report dropped this provision.