Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. OK, 10 minutes on this side and 10 minutes to be controlled by the Senator from New York.

Mr. GRASSLEY. We have no objection to that.

Mr. GRASSLEY. Mr. President, first of all, I thank the Senator from New York for his cooperation with us on a couple of amendments he has worked out with us and has withdrawn so we could get closer to completion of work on this particular amendment. In the case of his amendment just now offered, and my opposition to it, I want to say we have taken into consideration some of the complaints he has made--not about our bill, but complaints he would have made about some of the people writing legislation in this area, that they would go too far. But I think his amendment goes too far because it would have the effect of letting bankrupts below the national median income file for bankruptcy and do it in bad faith. That would make the small businesses and honest Americans who stand to lose out--they will be told they can't do anything about it. What we want is opportunity in our legal system, in the bankruptcy system, in the courts there, to be able to make a judgment, if there is bad faith used, to do something about it--most importantly, to discourage that sort of activity. So I think this amendment gets us back to the point where we are now under existing law--inviting abuse of the bankruptcy code. Under our bill, which we have been debating for the last several days on the floor of the Senate, and particularly as modified by the managers' amendment now, people below the national median income are not subject to motions by anybody under the means test. But there is another part of this bill that says the bankruptcy cases can be dismissed if the debtor filed for bankruptcy in bad faith. At this point, the creditors are allowed to file motions asking a bankruptcy judge to dismiss a case if it is filed in bad faith. That is the way our litigation system works and should continue to work. In an effort to go the extra mile, however, I accepted an amendment, by Senator Reed of Rhode Island and Senator Sessions, to put new safeguards in place to prevent creditors using any power they have to file bad faith motions as a tactic to force a debtor to give up his or her rights. That should not be allowed. The Reed Sessions amendment corrects that. The projections in the Reed Sessions amendment were also developed in close consultation with the White House. Our bill further provides that if a motion to dismiss is filed and the judge dismisses it, the judge can assess penalties against a creditor who filed the motion if the motion wasn't substantially justified. So we want to make sure that creditors who would abuse some of their power in court would not--if it was not substantially justified, if their position was not substantially justified, then action should be taken against them, and that is entirely fair as well. So we have a fair system with tough penalties for creditor abuses. Now, the amendment of Senator from New York will return to the system we have today. Under current law, creditors can't file motions when a chapter 7 case is abusive or improper. And every observer acknowledges that the current system doesn't work at all in terms of catching abuse; hence, a major part of this bill is to correct this situation. We went to great length in our committee report on this bankruptcy bill to discuss this point in very much detail. So this amendment should be defeated because it prevents the provisions prohibiting bad faith bankruptcy from being enforced. That is like saying to deadbeats it is not OK to file for bankruptcy in bad faith, but we are not going to do anything about it if you do. And, of course, that is exactly the wrong signal we want to send. We want to make sure that people who go into bankruptcy are people who have a legitimate reason for being there and that they aren't taking advantage of bankruptcy to somehow help themselves, and in bad faith is part of that process. Mr. President, how much time do I have left?

Mr. GRASSLEY. I yield the remainder of my time.

Mr. GRASSLEY. Then I will reserve my time, if I may.

Mr. GRASSLEY. I do not object.

Mr. GRASSLEY. Mr. President, the issue that the Senator from New York just brought up of threats being used is exactly what the Reed-Sessions amendment deals with. I suggest this was also very much a point that was raised by people at the White House that we have been discussing-- the whole issue of bankruptcy over a long period of time. This was also worked out because this was a major concern. They did not want this abuse. They did not want the issue of threats. We agree with them, as we had to work it out with Senators Sessions and Reed because the bill, as they saw it, was not adequate enough in this area. As people vote on this amendment, I hope they will consider that we have been trying to respond in a very legitimate and strong way against the use of threats.

Mr. GRASSLEY. The answer is yes.

Mr. GRASSLEY. If you threaten somebody during reaffirmation, the Sessions-Reed amendment is set aside. I yield the remainder of my time. I ask unanimous consent that the Senator from Louisiana be granted 5 minutes to speak as if in morning business.

Mr. GRASSLEY

Mr. GRASSLEY. Reserving the right to object, and I will not object, I previously talked to the Senator from Massachusetts about time agreement on his amendment. I prefer to forego a time agreement and have him proceed accordingly. I have no objection.

Mr. GRASSLEY. I have two unanimous consent requests. amendment no. 2659, as modified

Mr. GRASSLEY. Mr. President, the first unanimous consent is on an amendment, as modified. It is amendment No. 2659. I send the modification to the desk and ask unanimous consent it be considered agreed to, and the motion to reconsider be laid upon the table.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that at 4:30 we proceed to two stacked votes on the pending Feinstein amendment and the Schumer amendment, and do it in that order, with 4 minutes equally divided in the usual form between the two votes, and that no amendments be in order prior to the votes. Maybe I ought to correct this. I think we should say there would be 2 minutes divided on the Feinstein amendment and then 2 minutes before we vote on the Schumer amendment-- or 4.

Mr. GRASSLEY. Amendment No. 2762.

Mr. GRASSLEY. So let me once again state this: I ask unanimous consent that at 4:30 we proceed to two stacked votes on the pending Feinstein amendment, with 4 minutes equally divided to discuss the Feinstein amendment, and then at the end of that vote have 4 minutes equally divided to discuss the Schumer amendment, and then immediately proceed to a vote on or in relation to the Schumer amendment, and that no amendments be in order prior to the votes.

Mr. GRASSLEY. Which amendment is that?

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that we proceed, then, to 2 minutes of debate on that side, 2 minutes on this side, and then we go to a vote.

Mr. GRASSLEY. We have an objection from the Banking Committee on that one at this point. And also, for the benefit of Senator Kennedy, who has been very patient, I have one Senator I have to consult before we go to a final decision on that amendment. But I think we can take care of this when we are over here voting, if you would let us proceed to these. And then I will work with you to get to the bottom of that at the time of that vote. Is that OK?

Mr. GRASSLEY. I suggest the absence of a quorum.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the yeas and nays be vitiated on the amendment.

Mr. GRASSLEY. I suggest the absence of a quorum.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GRASSLEY. Mr. President, there will be no more rollcalls today. We hope to continue debating some amendments, and they will be stacked to be taken at a time determined by the leader tomorrow.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet during the session of the Senate on Wednesday, November 17, 1999, after the 10 a.m. vote, to conduct a markup in Dirksen Room 226.