MONICA, CA - July 26 - The Foundation for Taxpayer and Consumer Rights (FTCR)
condemned legislation that would impose harsh new rules on consumers who file
for bankruptcy, while big corporations are still afforded the traditional protections
of bankruptcy. Congressional negotiators agreed yesterday on a credit card industry-sponsored
bankruptcy bill that strips consumer protections for Americans struggling under
the crush of credit card debt.
"The big guys can file multi-billion
dollar bankruptcies, but the rest of us can't get protection when we face difficult
financial times," said Doug Heller, senior consumer advocate with FTCR. "The
hand of government is striking consumers, while criminal corporations like WorldCom,
Enron and Adelphia receive the helping hand of bankruptcy protection."
FTCR called it ironic that the bankruptcy
bill agreement was announced on the same day that Congress came to agreement on
the corporate accountability legislation. The consumer group noted that the corporate
reform bill was weak in the area of ensuring that workers, retirees and other
investors are compensated for the losses they sustain when criminal corporations
retreat into the safe-haven of corporate bankruptcy protection.
"Not only do corporate scandals
devastate average Americans' lives, the personal bankruptcies that ensue after
a corporate collapse will be much more painful under this law," said Heller.
FTCR is calling on President Bush
to reject the bankruptcy bill, which was sponsored by some of his largest campaign
contributors in the credit card and banking industry. Under the bill, consumer
credit cardholders will not be able to wipe the slate clean and start over, even
though big corporations will continue to be allowed to pay pennies on the dollar
for their debts once they declare bankruptcy. Bankrupt corporations even get special
access to new credit once they file for bankruptcy protection, but average consumers
will be left without a safe-harbor as a result of the new law.
"There is a double standard
in Washington that says it's OK for corporations to get a full range of bankruptcy
protections, but consumers should be left to struggle on their own. President
Bush should veto this extremely unfair legislation," said Heller.