Bankruptcy Laws to be Overhauled (No more Chapter 7)

[CrazyZeb]

Originally posted by Destino

Neither candidate ran on this issue and this bill has failed with a GOP majority several times before. Don't let reality get in the way however Zeb, just keep making smart@ss comments as usual.

I'll do that.... you keep letting your ego guide you. :thumbsup:

[zoony]

Originally posted by iheartskins

The Comptroller of the Currency is already in place to regulate this industry--I don't think that more regulation is necessary at this point.

ummm... I don't think I understand. It sounds like you're agreeing with me. ??

My point is that government needs to stay the hell out of it. Where did I advocate further governmental regulation?

That is what I've been arguing this entire time.

........

[Predicto]

Originally posted by iheartskins

The Comptroller of the Currency is already in place to regulate this industry--I don't think that more regulation is necessary at this point.

Actually, credit cards lending practices are generally regulated by the States. Why do you think all of your credit card companies tend to be based in South Dakota? Hint - it's not because Sioux Falls is a center of financial activity.

It is because South Dakota has virtually no consumer protection laws. When California attempted to regulate predatory lending practices involving California consumers, the courts ruled that because the credit card company was based in South Dakota, only South Dakota law applied. Where the customer lived was not material.

[Destino]

Originally posted by CrazyZeb

I'll do that.... you keep letting your ego guide you. :thumbsup:

Will do.... see you next time :wave:

[iheartskins]

Originally posted by Predicto

Actually, credit cards lending practices are generally regulated by the States. Why do you think all of your credit card companies tend to be based in South Dakota? Hint - it's not because Sioux Falls is a center of financial activity.

It is because South Dakota has virtually no consumer protection laws. When California attempted to regulate predatory lending practices involving California consumers, the courts ruled that because the credit card company was based in South Dakota, only South Dakota law applied. Where the customer lived was not material. [/b]

Actually, part of the reason that all of the banks are in South Dakota has to do with the interest rates and the cap on intrest rates in that state which are much higher than they are in other states.

Further, here is the jurisiction of the OCC (Office of the Comptroller of the Currency) as defined on their website. I think you should note that Citibank, MBNA among other lenders are all National Banks and thus within the jurisdiction of the OCC.

In regulating national banks, the OCC has the power to:

Examine the banks.

Approve or deny applications for new charters, branches, capital, or other changes in corporate or banking structure.

Take supervisory actions against banks that do not comply with laws and regulations or that otherwise engage in unsound banking practices. The agency can remove officers and directors, negotiate agreements to change banking practices, and issue cease and desist orders as well as civil money penalties.

Issue rules and regulations governing bank investments, lending, and other practices.

The OCC’s Objectives

The OCC’s activities are predicated on four objectives that support the OCC’s mission to ensure a stable and competitive national banking system. The four objectives are:

To ensure the safety and soundness of the national banking system.

To foster competition by allowing banks to offer new products and services.

To improve the efficiency and effectiveness of OCC supervision, including reducing regulatory burden.

To ensure fair and equal access to financial services for all Americans.

Source: OCC Website

See also: Comment, Smiley v. Citibank (South Dakota), N.A.: Charging Toward Deregulation in the Credit Card Industry, 22 DEL. J. CORP. L. 601, 628 n.221 (1997) (noting that "five of the ten largest credit card issuers in the nation are located in Delaware . . . .")

And See: Richard E. Coulson, CONSUMER ABUSE OF BANKRUPTCY: AN EVOLVING PHILOSOPHY OF DEBTOR QUALIFICATION FOR BANKRUPTCY DISCHARGE, 62 Alb. L. Rev. 467 (1998).

[Art]

Originally posted by Destino

Reckless facilitation of predatory lending has never beena core belief of the US of A. Perhaps in your rush to label me a fringe lunatic in a great display of "projecting" you forget that I am on the side of the status quo here. In other words I represent where America IS and you are the one in support of dragging this great nation kicking and screaming further into line with right wing lunacy.

I didn't label you anything. I suggested if you believe this issue is terribly right wing you are a fringe lunatic. That's not a label. It's a position you'll have taken that defines you for having taken it.

You further define yourself this way when you make comments like you represent where America is when, in fact, the article outlines that 85 members of the Senate think this is a good idea. Therefore, you are highly incorrect to assert you are where the country is, as you are in the tender, helpless, fanatical minority.

And, again, when the concept of thinking individuals should pay back the money they borrow becomes right wing lunacy it'll be a day we are all sad to be alive to see, since, it'll be a day America ceases to exist. Fortunately most can see your fringe politics and recognize them for what they are.

And when you can not, it simply makes it more fun for those watching.

[iheartskins]

Originally posted by zoony

ummm... I don't think I understand. It sounds like you're agreeing with me. ??

My point is that government needs to stay the hell out of it. Where did I advocate further governmental regulation?

That is what I've been arguing this entire time.

........

I responded that the OCC is there to deal with the banks as an example that the banks are actually restricted in their practices by something other than themselves.

[Art]

Originally posted by Destino

Neither candidate ran on this issue and this bill has failed with a GOP majority several times before. Don't let reality get in the way however Zeb, just keep making smart@ss comments as usual.

This bill had an 85 to 13 pass in the Senate. The failure was an amendment that sought to include government imposed fines as items no individual could escape through bankrupcy filings. Did you bother to read the article?

The article merely suggests people with means to pay back what they owe do so. I can't believe now right wing that sounds .

[zoony]

Hearing die-hard conservatives and free-market idealists advocating governmental intervention is somewhat confusing to me.

The Government has absolutely no business getting involved in this.

End of story.

.....

[Destino]

Originally posted by iheartskins

I think you'd probably agree that a large proportion of those entities that accept credit cards are not large corporations. This is not just Wal-Mart and Altria getting burned, Mom&Pop operations are also affected. I'd think you'd want to protect them.

Money is paid to business' immediately, it's Visa that doesn't get there share not Mom&Pops Pizza. What you are talking about here is would fit more with writing bad checks. In which case I'd agree with you.

Originally posted by iheartskins

The lessons of one generation will pass on to the next. Responsiblity needs to start somewhere.

In a nation where parents are unable to police what kids watch on TV you want to gamble the lives of young people on parent based financial advice? Why? Like I said before there really is NOT a problem here to begin with.

Originally posted by iheartskins

Worst idea ever? I don't think hyperbole is going to bolster your point here.

OK then, policing yourself works if there is something to lose. This bill would remove the ability of people to shed their debt, and thus remove the incentive to not engage in predatory lending practices. So exactly what self policing do you think will go on here with no incentive to do so?

[zoony]

If this bill passes, the economy will suffer.

Mark my words.

.....

[iheartskins]

Originally posted by Destino

Money is paid to business' immediately, it's Visa that doesn't get there share not Mom&Pops Pizza. What you are talking about here is would fit more with writing bad checks. In which case I'd agree with you.

My comment was more that people that had racked up huge credit card bills would have other outstanding debts that they could not pay and thus had to go into bankruptcy--thus not only do the credit card companies lose out, but the other creditors as well (some of which are the aforementioned Mom & Pops).

In a nation where parents are unable to police what kids watch on TV you want to gamble the lives of young people on parent based financial advice? Why? Like I said before there really is NOT a problem here to begin with.

So instead no one should be held accountable?

OK then, policing yourself works if there is something to lose. This bill would remove the ability of people to shed their debt, and thus remove the incentive to not engage in predatory lending practices. So exactly what self policing do you think will go on here with no incentive to do so?

Self policing would go on in the sphere of the individual. Preventing people from sheding their debt loads would prevent them from engaging in irresponsible monetary policy and if they chose to, it would provide a consequence.

[Predicto]

I used South Dakota as an example. Delaware is the other best example. Same thing - very friendly to the companies' interests rather than the consumer's interests.

BTW, mMy wife is an attorney for the Federal Deposit Insurance Corporation. I know this area. The OCC does not regulate credit card lending practices. It makes sure that banks stay solvent. The two are not the same.

[Art]

Originally posted by zoony

Hearing die-hard conservatives and free-market idealists advocating governmental intervention is somewhat confusing to me.

The Government has absolutely no business getting involved in this.

End of story.

.....

Zoony,

This does not even make sense.

Making the process of going bankrupt to require those with the means to repay their debts would not hurt the economy in the slightest. You'd HELP it by not having companies take as many business loss write offs.

You suggest the government has no business getting involved in this. This is a remarkable statement because, the process of filing for bankruptcy is a governmental process. Do you seriously mean the government has no business regulating a government process?

Or do you mean bankruptcy shouldn't exist at all?

If that's what you mean, that's fine by me .

[Art]

Originally posted by Destino

In a nation where parents are unable to police what kids watch on TV you want to gamble the lives of young people on parent based financial advice? Why? Like I said before there really is NOT a problem here to begin with.

There's not a problem with people running up debt and not paying it back? Sometimes I wonder what people think about when they make statements like this. Of course there's a problem with this. Holding individuals responsible for their actions in this regard makes a whole lot of sense as a method to limit the problem.

OK then, policing yourself works if there is something to lose. This bill would remove the ability of people to shed their debt, and thus remove the incentive to not engage in predatory lending practices. So exactly what self policing do you think will go on here with no incentive to do so?

I read the article provided here. It didn't say, I don't think, that the bill would remove the ability of people to shed their debt. It said it would remove the ability of those who have the money or financial means to repay their debt from not doing so. Liberals love means testing in most forms. Why not here?

[codeorama]

Here's my problem with the credit system....

I have the same name as my dad, with the "Jr" added at the end. His credit and mine get screwed up all the time. Why? Because your SS number doesn't mean anything. Credit companies are ruthless. My grandmother passed away 10 years ago and my dad was a co signer on one of her loans, so they went after him, she had death insurance on the loan, but they didn't care, they put a negative mark on his credit AND mine. I knew nothing about it. When I went buy my first home, it was discovered as well as 5 credit cards that I supposedly had when I was 4 years old. The sad part is that it took a lot of effort to get that crap removed from my credit report. And then, it reappeared a couple of years later when my wife and I were buying our second home. We were lucky that we had a friend that was a lawyer that cantacted the companies on our behalf and threatened them.

What's the point of having a SS number if the freakin credit companies don't even go by it?

Sorry, end rant.

[iheartskins]

Originally posted by Predicto

I used South Dakota as an example. Delaware is the other best example. Same thing - very friendly to the companies' interests rather than the consumer's interests.

BTW, mMy wife is an attorney for the Federal Deposit Insurance Corporation. I know this area. The OCC does not regulate credit card lending practices. It makes sure that banks stay solvent. The two are not the same.

They OCC doesn't regulate them in practice but it does by regulation. You are right about that. That's what the whole PBS "expose" was about: that the OCC should take bigger steps to regulate the credit card industry.

I don't doubt your wife's expertise for a minute; obviously the FDIC regulates banks--but so do several other agencies. The FDIC's jurisdiction is not exclusive.

[Predicto]

No, it is not exclusive. I wasn't saying that. I was saying that I know, from her, how these things work. The FDIC, the Fed and the OCC hall have overlapping regulation over various types of banks. However, all of them are concerned with keeping the banks solvent - that is what their regulations are all about. If there is an regulation of predatory credi card lending practices, that is done at the state level - in South Dakota and Delaware. I.e., not at all.

[Cskin]

In a nation where parents are unable to police what kids watch on TV you want to gamble the lives of young people on parent based financial advice? Why? Like I said before there really is NOT a problem here to begin with.

So....Am I to understand that you believe the kid's irresponsibility should be labled... "kids being kids".... but the lending practices of financial institutions should be regulated and monitored? I don't get it.

You can't tell me that kids who get that glistening new credit card in their dorm room mailbox don't think..... even for a fleeting moment.... that they shouldn't go hog wild and live above their means so as to reach a moment where they are unable to repay the credit offered to them. The fact is.... they do.... I'd bet all of them think that way for a few weeks..... then just say screw it and order another round of beers and pizza for their clique. They rationalize it that mommy and daddy will pay the bill.... or the credit card company will forget about them.... or they'll simply go underground to avoid payment.

The key here is that NO ONE, not parents.... not high school teachers.... not college professors.... are teaching kids how to be responsible with their money and budget effectively.... not to mention the pitfalls and concequences of overwhelming credit card debt.

I see this legislation as an attempt to make serious this huge problem with today's kids. Lack of responsibility.... brought on by years of poor parenting and a lethargic/lazy public education system.

This country would be much served if we began teaching our children about real world mechanics instead of home economics (baking pies) and Shop class. :doh:

[Art]

Originally posted by codeorama

Here's my problem with the credit system....

I have the same name as my dad, with the "Jr" added at the end. His credit and mine get screwed up all the time. Why? Because your SS number doesn't mean anything. Credit companies are ruthless. My grandmother passed away 10 years ago and my dad was a co signer on one of her loans, so they went after him, she had death insurance on the loan, but they didn't care, they put a negative mark on his credit AND mine. I knew nothing about it. When I went buy my first home, it was discovered as well as 5 credit cards that I supposedly had when I was 4 years old. The sad part is that it took a lot of effort to get that crap removed from my credit report. And then, it reappeared a couple of years later when my wife and I were buying our second home. We were lucky that we had a friend that was a lawyer that cantacted the companies on our behalf and threatened them.

What's the point of having a SS number if the freakin credit companies don't even go by it?

Sorry, end rant.

I keep hearing stories of this sort and perhaps I'm missing something, but, I have bought multiple homes. I have a judgement against me and another negative credit problem. I also had a problem with a number of credit marks against me because my father opened cards in my name and used them to help my credit out in college and when he died, we didn't find them, so there were like 10 cards all considered charge offs.

All I had to do was say they weren't mine. I never had anything to do with them. That's it. I didn't have to have them removed from the credit report. I simply had to certify they weren't my debts. And, I got a $150,000 loan for a rental home as well as a $300,000 loan for my current home, as well as a line of credit worth $25,000.

It was so easy. I don't know how some have run into problems with this process because by law you have the right to dispute anything you want and it's the vendors obligation to prove you and ONLY you hold the debt.

[iheartskins]

Originally posted by codeorama

Here's my problem with the credit system....

I have the same name as my dad, with the "Jr" added at the end. His credit and mine get screwed up all the time. Why? Because your SS number doesn't mean anything. Credit companies are ruthless. My grandmother passed away 10 years ago and my dad was a co signer on one of her loans, so they went after him, she had death insurance on the loan, but they didn't care, they put a negative mark on his credit AND mine. I knew nothing about it. When I went buy my first home, it was discovered as well as 5 credit cards that I supposedly had when I was 4 years old. The sad part is that it took a lot of effort to get that crap removed from my credit report. And then, it reappeared a couple of years later when my wife and I were buying our second home. We were lucky that we had a friend that was a lawyer that cantacted the companies on our behalf and threatened them.

What's the point of having a SS number if the freakin credit companies don't even go by it?

Sorry, end rant.

Note to self: do not name son iheartskins.

[CrazyZeb]

Originally posted by codeorama

Here's my problem with the credit system....

I have the same name as my dad, with the "Jr" added at the end. His credit and mine get screwed up all the time. Why? Because your SS number doesn't mean anything. Credit companies are ruthless. My grandmother passed away 10 years ago and my dad was a co signer on one of her loans, so they went after him, she had death insurance on the loan, but they didn't care, they put a negative mark on his credit AND mine. I knew nothing about it. When I went buy my first home, it was discovered as well as 5 credit cards that I supposedly had when I was 4 years old. The sad part is that it took a lot of effort to get that crap removed from my credit report. And then, it reappeared a couple of years later when my wife and I were buying our second home. We were lucky that we had a friend that was a lawyer that cantacted the companies on our behalf and threatened them.

What's the point of having a SS number if the freakin credit companies don't even go by it?

Sorry, end rant.

My family has similar problems, as my Grandfather, Father, and Brother all have the same name (Sr., Jr., III). My Grandfather has had some credit problems and somehow my brother keeps getting screwed. :doh:

Something similarly rediculous - my Grandfather wrote a check and they took the money out of my brother's account (which was more than he had). How can that ever happen? What's the point of bank account numbers?

[Destino]

Originally posted by iheartskins

My comment was more that people that had racked up huge credit card bills would have other outstanding debts that they could not pay and thus had to go into bankruptcy--thus not only do the credit card companies lose out, but the other creditors as well (some of which are the aforementioned Mom & Pops).

I don't know of any mom and pops that offer lines of credit but I'll give you that point.

Originally posted by iheartskins

Self policing would go on in the sphere of the individual. Preventing people from sheding their debt loads would prevent them from engaging in irresponsible monetary policy and if they chose to, it would provide a consequence.

Since when has 7 years of no credit not been considered a consequence?

Also preventing people from shedding their credit WOULD NOT prevent them from engaging in irresponsible behavior. It would in fact lead to the MORE money being spent by credit card companies to get individuals to do exactly that.

[Destino]

Originally posted by CrazyZeb

My family has similar problems, as my Grandfather, Father, and Brother all have the same name (Sr., Jr., III). My Grandfather has had some credit problems and somehow my brother keeps getting screwed. :doh:

Something similarly rediculous - my Grandfather wrote a check and they took the money out of my brother's account (which was more than he had). How can that ever happen? What's the point of bank account numbers?

I might be insane but I thought they recently made a change so that checks and such had to be immediately withdrawn or checked or something. The intent was to avoid bad checks being written. Maybe I dreamed it.

[carlsbadd]

I review hundreds of credit reports a year, If you miss some payments here and there you will have a lower credit score than somebody who declared BK a year ago and opened two accounts.

The problem with any system is abuse, the upswing in BK filings is has several causes.

People get as much credit as they can ,get as much cash as they can, and stash it with a friend or family member and then declare BK. This happens more than you think.

ANother reason is the enactment of "predatory lending" laws. IN North Carolina they passed laws that made it a lot tougher to get a subprime(bad credit) mortgage to pay off debts, the bill's largest support group was BK attorneys, since the laws were passed BK filings increased 600% in that state.

There is a fine line between protecting consumers from loan scams and keeping credit available to those with bad credit. Every banking industry has it's bad apples and new loan scams come around every day.

Some states have had to go back and change these laws becuase the citizens complained they did not have access to credit even though the laws were enacted to "protect them"

Bear in mind that the Department of Housing HUD , has a higher forclosure rate than most any lending instituion ,but because they are government sponsored it's OK.

The real kick in the crotch is that HUD makes many of the rules that apply to mortgage lenders, yet does not change it's standards when thier foreclosure rates skyrocket. It's do as we say not as we do.