F. Sensenbrenner

Mr. SENSENBRENNER

Mr. SENSENBRENNER. Mr. Chairman, this provision was struck because it was determined to be substantive in nature and potentially controversial. It is the intention of me as the author of this amendment to have the amendment to be completely technical and nonsubstantive in nature and to clean up the inconsistencies in the bill that was presented to the President last year and ended up being pocket vetoed.

Mr. SENSENBRENNER. Mr. Chairman, will the gentleman yield?

Mr. SENSENBRENNER. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, this amendment is one that proposes to make technical and conforming changes to the bill. The 420-page bill had a number of technical problems, such as improper spacing, incorrect terminology, drafting errors, incorrect headings, incorrect references to section numbers and grammatical inconsistencies. This amendment will clean up the bill which will make the provisions of the legislation easier to execute and to understand. I want to emphasize that this amendment does not substantively alter the composition of the bill. Over the last several years, the Congress has considered, amended, debated, negotiated and refined this measure, and the product under consideration is the result of those labors. During the last Congress, that delicate balance is preserved in this legislation. This amendment improves the bill by making it as technically accurate as possible, which is important because lawyers, accountants, creditors and debtors will be relying on and scrutinizing its provisions. Again, this is a technical amendment meant only to clarify with precision the terms of this legislation. I urge its adoption. Mr. Chairman, I reserve the balance of my time.

Mr. SENSENBRENNER. Mr. Chairman, I offer an amendment made in order by the rule.

Mr. SENSENBRENNER. Mr. Chairman, will the gentleman yield?

Mr. SENSENBRENNER. Mr. Chairman, will the gentlewoman yield?

Mr. SENSENBRENNER. The gentleman from Wisconsin said he is pleased to support the amendment of the gentlewoman from Texas (Ms. Jackson-Lee).

Mr. SENSENBRENNER. Mr. Chairman, I yield back the balance of my time.

Mr. SENSENBRENNER. Mr. Chairman, I yield 2 minutes to the gentleman from Ohio (Mr. Chabot).

Mr. SENSENBRENNER. Mr. Speaker, I rise in opposition to the motion to recommit.

Mr. SENSENBRENNER. Mr. Speaker, I rise in opposition to the motion to recommit and ask the Members to vote no on this motion. This motion to recommit proposes an amendment that does not deal with the Bankruptcy Code whatsoever, but amends the truth-in-lending act, as has been described by its proponents. In most States of this country, including my home State of Wisconsin, the age of majority is 18. When one achieves the age of 18, one is responsible for one's contracts, one can sue and be sued, one can vote, and in many cases can run for and be elected to public office. What this amendment proposes to say is that in terms of receiving solicitations for credit cards and receiving applications for credit cards, these adults are considered children for 3 more years. What it does is it paints with a broad brush every 18-, 19-, and 20-year-old and says, ``You have to go run to your parents or show independent financial means before you can apply for a credit card.'' So the good kids who would use credit responsibly and learn how to use credit responsibly are not able to get credit cards, just like the bad kids who would use credit irresponsibly. I would submit to each Member of the House of Representatives that we should not be tarring kids with this broad brush; we should not be telling 18-, 19-, and 20-year-olds that they are adults for every purpose except just this one. I think what we should be doing is empowering our young people and giving them the educational tools to make good credit decisions, rather than simply saying, The door is shut for you. Mr. Speaker, I yield to the gentleman from Ohio (Mr. Oxley).

Mr. SENSENBRENNER. Mr. Speaker, on that I demand the yeas and nays.

Mr. SENSENBRENNER. Mr. Chairman, I yield 4 minutes to the distinguished gentleman from Pennsylvania (Mr. Gekas), the principal author of the bill. (Mr. GEKAS asked and was given permission to revise and extend his remarks.)

Mr. SENSENBRENNER. Mr. Chairman, I yield 2 minutes to the gentleman from Texas (Mr. Armey), the distinguished majority leader.

Mr. SENSENBRENNER. Mr. Chairman, I yield myself 6 minutes. Mr. Chairman, I rise in support of H.R. 333, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2001. Mr. Chairman, this bill is a bipartisan, balanced, and comprehensive package of reform measures pertaining to both consumer and business bankruptcy cases. The purpose of the bill is to improve bankruptcy law and practice by restoring personal responsibility and integrity in the bankruptcy system, and to ensure that the system is fair to both debtors and creditors. With respect to its consumer provisions, H.R. 333 responds to several significant developments. One of these developments was the dramatic increase in consumer bankruptcy filings during the 1990s and the losses associated with those filings. Based on data released by the Administrative Office of the United States Courts, bankruptcy filings increased by more than 72 percent between 1994 and 1998. Mr. Chairman, for the first time in our Nation's history, bankruptcy filings exceeded 1 million in 1996. In calendar year 1997 alone, bankruptcy filings increased by more than 19 percent over the prior year. By 1998, the number of bankruptcy filings, according to the AO, reached an all-time high of more than 1.4 million cases. Although the most recent reporting periods indicate the filings have somewhat decreased, the Administrative Office states they remain well above the 1 million mark. Paradoxically, this dramatic increase in bankruptcy filing rates has occurred during a period when the economy was generally robust, with relatively low unemployment and high consumer confidence. Coupled with this development was the release of a study estimating that financial losses attributable to bankruptcy filings in 1997 exceeded $44 billion. The committee received testimony in the last Congress stating that this figure, when amortized on a daily basis, amounts to a loss of at least $110 million a day. Please note, those of us who pay our bills as we have agreed end up having to absorb these losses through higher costs and bank fees and interest rates. Various other studies which thereafter became available concluded that some bankruptcy debtors can in fact repay a significant portion of their debts. The heart of H.R. 333's consumer bankruptcy provisions is the implementation of an income-expense screening mechanism, usually referred to as a means-based or means test reform. These provisions are designed to ensure that debtors repay creditors the maximum they can afford. In addition, the bill institutes significant consumer protection reforms, including mandatory credit counseling requirements and specific disclosures in connection with certain credit transactions. The reforms are aimed to help debtors understand their rights and obligations with respect to reaffirmation agreements are also included in the legislation. In addition, the legislation substantially expands the debtor's ability to exempt certain tax-qualified retirement accounts and pensions. It also creates a new provision that allows a consumer debtor to exempt certain education IRA and State tuition plans for his or her child's postsecondary education from the claims of creditors. Most importantly, H.R. 333 requires debtors to participate in credit counseling programs before they file for bankruptcy relief, unless special circumstances do not permit such participation. The legislation's credit counseling provisions are intended to educate consumers about the consequences of bankruptcy, such as the potentially devastating effect it could have on their credit rating, and to provide them with guidance about how to manage their finances so that they can avoid future financial difficulties. Mr. Chairman, the bill also makes extensive reforms pertinent to business bankruptcies. Many of these provisions are intended to heighten administrative scrutiny and judicial oversight of small business bankruptcy cases. In addition, the bill includes provisions designed to reduce systemic risk in the financial marketplace and to clarify the treatment of tax claims in bankruptcy cases. H.R. 333 also creates a new form of bankruptcy relief for transnational insolvencies and includes provisions regarding family farmer debtors and health care providers. It should be noted that this bill is a product of more than 3 years of congressional consideration of bankruptcy reform legislation. As reported, H.R. 333 is virtually identical to the conference report on H.R. 2415, the Gekas-Grassley Bankruptcy Reform Act of 2000, which passed the House by a voice vote last October 12 and passed the other body on December 7 by a vote of 70 to 28. But for former President Clinton's December 19 pocket veto, this legislation would have been become law. It should also be noted that support for bankruptcy reform legislation in the last two Congresses has been overwhelming and bipartisan. In the 105th Congress, for example, the House passed both H.R. 3150, the Bankruptcy Reform Act of 1998, and the conference report on that bill by veto proof margins. In the last Congress, the House passed H.R. 833, which is the successor to H.R. 2415, by a veto-proof margin of 313-108. This bill is the product of extensive negotiation and compromise, as well as an exhaustive and amendatory process. In the last Congress alone, the House and Senate engaged in nearly 7 months of negotiations to reconcile the differences between their respective bills. The product of these exhaustive efforts was the conference report on H.R. 2415, which is virtually identical to this bill. Mr. Chairman, this is a balanced, bipartisan and comprehensive reform measure, which will prevent the costly exploitation of our bankruptcy system, while protecting those debtors truly in need of bankruptcy protection. Mr. Chairman, I urge my colleagues to support this important legislation. Mr. Chairman, I reserve the balance of my time.

Mr. SENSENBRENNER. Mr. Chairman, I yield 1 minute to the gentleman from Arizona (Mr. Flake).

Mr. SENSENBRENNER

Mr. SENSENBRENNER. Mr. Speaker, I ask unanimous consent that, in the engrossment of the bill, H.R. 333, the Clerk be authorized to correct section numbers, punctuation, citations and cross references and to make such other technical and conforming changes as may be necessary to reflect the actions of the House in amending the bill.

Mr. SENSENBRENNER

Mr. SENSENBRENNER. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on H.R. 333.

Mr. SENSENBRENNER

Mr. SENSENBRENNER. Mr. Speaker, I yield 5 minutes to the gentleman from Michigan (Mr. Smith), the author of the bill.

Mr. SENSENBRENNER. Mr. Speaker, I yield back the balance of my time.

Mr. SENSENBRENNER. Mr. Speaker, on that I demand the yeas and nays.

Mr. SENSENBRENNER. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 256) to extend for 11 additional months the period for which chapter 12 of title 11 of the United States Code is reenacted.

Mr. SENSENBRENNER. Mr. Speaker, I will include in the Record the Congressional Budget Office's cost estimate of H.R. 256. General Leave

Mr. SENSENBRENNER

Mr. SENSENBRENNER. Mr. Speaker, on Thursday, March 1, 2001, the House is scheduled to consider H.R. 333, the ``Bankruptcy Abuse Prevention and Consumer Protection Act of 2001.'' On February 15, 2001, the Committee on the Judiciary ordered reported favorably the bill H.R. 333 and the report thereon was filed on February 26, 2001. The Congressional Budget Office (``CBO'') cost estimate, however, was not available for filing on February 26. Therefore, I hereby submit the CBO cost estimate for printing in the Congressional Record. U.S. Congress, Congressional Budget Office, Washington, DC, February 27, 2001. Hon. F. James Sensenbrenner, Jr. Chairman, Committee on the Judiciary, House of Representatives, Washington, DC. Dear Mr. Chairman: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 333, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2001. If you wish further details on this estimate, we will be pleased to provide them. The CBO staff contacts are Lanette J. Walker (for federal costs), Erin Whitaker (for the revenue impact), Shelley Finlayson (for the state and local impact), and Paige Piper/Bach (for the private-sector impact). Sincerely, Barry B. Andersen (for Dan L. Crippen, Director). Enclosure

Mr. SENSENBRENNER

Mr. SENSENBRENNER. Mr. Speaker, I ask unanimous consent that the Speaker be authorized to entertain a motion to suspend the rules relating to House Resolution 54, today, Wednesday, February 28, 2001.