Wednesday, March 09, 2005

 

The Visa / MBNA-America Bankruptcy Reform Act of 2005

Why not allow – nay, require – legislation to bear the names of its corporate sponsors?

The latest feather in the Bush Administration's cap is the new bankruptcy bill, which passed the Senate and is expected to breeze through the House. Given the Orwellian name, "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, President Bush can't wait to sign it. (Clinton killed a similar bill in the final days of his presidency.)

The main feature of the bill is that many consumers who have gotten in over their heads with credit card debt will no longer be able to cancel that debt in bankruptcy under the Chapter 7 "fresh start" provision, but will instead have to get a "repayment plan," under Chapter 13, spending potentially the rest of their lives paying it off. The rhetoric of the bankruptcy "reform" bill's Republican backers is full of talk of "personal responsibility," which is all well and good until you observe that they defeated a Democratic amendment to close this loophole (as summarized by the Daily Kos):

Laws inspired by the Enron debacle may hold the officers of a corporation personally liable for the deceptive financial practices, and ensuing disasters, of their corporation. However -- luckily for prospective corporate criminals -- there are in the United States a handful of states, such as Utah, where you may stash your assets in a "protected trust" and render them untouchable by bankruptcy laws -- and you don't have to be a resident of those states to take advantage of those laws.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, while purporting to strengthen bankruptcy laws against abuse, specifically provides exemptions for those asset protection trusts.
I've previously joked about proposed privatization of the federal government in which naming rights for United States landmarks would go to corporate donors – e.g., the MBNA American White House.

A more serious proposal is to have corporate naming rights for legislation. Not to allow corporate naming rights, but to require it – as a disclosure device. Consider that
the main lobbying forces for the bill – a coalition that included Visa, MasterCard, the American Bankers Association, MBNA America, Capital One, Citicorp, the Ford Motor Credit Company and the General Motors Acceptance Corporation – spent more than $40 million in political fund-raising efforts and many millions more on lobbying efforts since 1989... [NY Times]
Isn't it only fair that we know whom to thank for all this great new "consumer protection"?

***

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