Why MBNA Supported the New U.S. Bankruptcy Bill

[ghacorp]

Reprinted w/o permission from MBNA This Month 3. (employee newsletter)

After considering various versions over the last eight years, Congress recently enacted, and the President signed into law, comprehensive bankruptcy reform legislation. MBNA was a significant part of a broad-based coalition of businesses and trade associations that worked together to get the bill passed. It is the first major overhaul of bankruptcy laws in nearly 30 years.

"This legislation represents a balanced approach to modernizing our bankruptcy laws," said MBNA General Counsel Louie Freech. "There are provisions that will benefit consumers and companies like ours".

Many provisions of the bill are designed to help Customers avoid filing for bankruptcy in the first place. The mandatory credit counseling, Truth in Lending Act enhancements, and improved access to financial management information contained in the bill will give consumers tools to help them pay their outstanding debts, which in turn will benefit companies like MBNA.

Most important, mandatory credit counseling will not only address a consumer's current debt, but will also provide financial literacy and education on an ongoing basis.

Other provisions will substantially reduce bankruptcy fraud by making it harder to hide assets, to misrepresent the ability to repay debts, and to abuse the current Chapter 7 bankruptcy procedures.

The new law also containes a "means test" and other measures that will increase both the number of bankruptcy filers who repay at least a portion of their unsecured debts and the dollar amount of debt they repay once in bankruptcy.

Greater protections are also afforded to certain classes of debt, such as payments due for child support.

The bill will lead to reduced loan losses, as bankruptcies currently account for approximately 40% of charge-offs at MBNA. The new law takes effect 180 days from when it was signed by the President in April.

[Methuss]

Yeah...that and the double standard in FACTA that allows bastards like them to ignore letters that come from credit repair organizations.

Forced into credit counseling, but they've got an exemption from the law to ignore credit counseling services with regards to credit reportings...great.

[LadynRed]

"There are provisions that will benefit consumers and companies like ours".

That's the biggest BULLSH*T, that line should read as follows:

"There are provisions that will benefit companies like ours".

Many provisions of the bill are designed to help Customers avoid filing for bankruptcy in the first place. The mandatory credit counseling, Truth in Lending Act enhancements, and improved access to financial management information contained in the bill will give consumers tools to help them pay their outstanding debts, which in turn will benefit companies like MBNA.

Yeah.. right.. credit counseling organizations that are CONTROLLED by the CREDITORS - like MBNA. All of THAT is because they just ASSUME that people are stupid and can't manage their money. Forget the fact that the large majority of bankrutpcies is caused by catastrophic medical bills, then there's job loss in this crappy economy, and divorces.

MBNA BOUGHT this rotten piece of legislation, plain and simple. Its for THEIR benefit, there's no 'helping the consumer' about it.