Bankruptcy Reform
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BANKRUPTCY REFORM JOINT HEARING BEFORE THE SUBCOMMITTEE ON COMMERCIAL AND ADMINISTRATIVE LAW OF THE HOUSE COMMITTEE ON THE JUDICIARY AND THE SUBCOMMITTEE ON ADMINISTRATIVE OVERSIGHT AND THE COURTS OF THE SENATE COMMITTEE ON THE JUDICIARY ONE HUNDRED SIXTH CONGRESS FIRST SESSION MARCH 11, 1999 Serial No. 2 ( Printed for the use of the Committees on the Judiciary U.S. GOVERNMENT PRINTING OFFICE 61±368 WASHINGTON : 2000 For sale by the U.S. Government Printing Office Superintendent of Documents, Congressional Sales Office, Washington, DC 20402 VerDate 11-SEP-98 16:52 Jan 10, 2000 Jkt 061368 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 F:\WORK\COMM\031199\61368 HJUD2 PsN: HJUD2 COMMITTEE ON THE JUDICIARY HENRY J. HYDE, Illinois, Chairman F. JAMES SENSENBRENNER, JR., JOHN CONYERS, JR., Michigan Wisconsin BARNEY FRANK, Massachusetts BILL McCOLLUM, Florida HOWARD L. BERMAN, California GEORGE W. GEKAS, Pennsylvania RICK BOUCHER, Virginia HOWARD COBLE, North Carolina JERROLD NADLER, New York LAMAR S. SMITH, Texas ROBERT C. SCOTT, Virginia ELTON GALLEGLY, California MELVIN L. WATT, North Carolina CHARLES T. CANADY, Florida ZOE LOFGREN, California BOB GOODLATTE, Virginia SHEILA JACKSON LEE, Texas ED BRYANT, Tennessee MAXINE WATERS, California STEVE CHABOT, Ohio MARTIN T. MEEHAN, Massachusetts BOB BARR, Georgia WILLIAM D. DELAHUNT, Massachusetts WILLIAM L. JENKINS, Tennessee ROBERT WEXLER, Florida ASA HUTCHINSON, Arkansas STEVEN R. ROTHMAN, New Jersey EDWARD A. PEASE, Indiana TAMMY BALDWIN, Wisconsin CHRIS CANNON, Utah ANTHONY D. WEINER, New York JAMES E. ROGAN, California LINDSEY O. GRAHAM, South Carolina MARY BONO, California SPENCER BACHUS, Alabama THOMAS E. MOONEY, SR., General Counsel-Chief of Staff JULIAN EPSTEIN, Minority Chief Counsel and Staff Director SUBCOMMITTEE ON COMMERCIAL AND ADMINISTRATIVE LAW GEORGE W. GEKAS, Pennsylvania, Chairman ED BRYANT, Tennessee JERROLD NADLER, New York LINDSEY O. GRAHAM, South Carolina TAMMY BALDWIN, Wisconsin STEVE CHABOT, Ohio MELVIN L. WATT, North Carolina SPENCER BACHUS, Alabama ANTHONY D. WEINER, New York MARY BONO, California WILLIAM D. DELAHUNT, Massachusetts RAYMOND V. SMIETANKA, Chief Counsel SUSAN JENSEN-CONKLIN, Counsel JAMES W. HARPER, Counsel (II) VerDate 11-SEP-98 16:52 Jan 10, 2000 Jkt 061368 PO 00000 Frm 00002 Fmt 5904 Sfmt 0486 F:\WORK\COMM\031199\61368 HJUD2 PsN: HJUD2 SENATE COMMITTEE ON THE JUDICIARY ORRIN G. HATCH, Utah, Chairman STROM THURMOND, South Carolina PATRICK J. LEAHY, Vermont CHARLES E. GRASSLEY, Iowa EDWARD M. KENNEDY, Massachusetts ARLEN SPECTER, Pennsylvania JOSEPH R. BIDEN, Delaware JON KYL, Arizona HERB KOHL, Wisconsin MIKE DEWINE, Ohio DIANNE FEINSTEIN, California JOHN ASHCROFT, Missouri RUSSELL D. FEINGOLD, Wisconsin SPENCER ABRAHAM, Michigan ROBERT G. TORRICELLI, New Jersey JEFF SESSIONS, Alabama CHARLES E. SCHUMER, New York BOB SMITH, New Hampshire MANUS COONEY, Chief Counsel & Staff Director BRUCE COHEN, Minority Chief Counsel & Staff Director SUBCOMMITTEE ON ADMINISTRATIVE OVERSIGHT AND THE COURTS CHARLES E. GRASSLEY, Iowa, Chairman JEFF SESSIONS, Alabama ROBERT G. TORRICELLI, New Jersey STROM THURMOND, South Carolina RUSSELL D. FEINGOLD, Wisconsin SPENCER ABRAHAM, Michigan CHARLES E. SCHUMER, New York KOLAN DAVIS, Chief Counsel JOHN MCMICKLE, Counsel RITA LARI, Counsel (III) VerDate 11-SEP-98 16:52 Jan 10, 2000 Jkt 061368 PO 00000 Frm 00003 Fmt 5904 Sfmt 0486 F:\WORK\COMM\031199\61368 HJUD2 PsN: HJUD2 VerDate 11-SEP-98 16:52 Jan 10, 2000 Jkt 061368 PO 00000 Frm 00004 Fmt 5904 Sfmt 0486 F:\WORK\COMM\031199\61368 HJUD2 PsN: HJUD2 C O N T E N T S HEARING DATE Page March 11, 1999 ........................................................................................................ 1 OPENING STATEMENT Gekas, Hon. George W., a Representative in Congress from the State of Pennsylvania, and chairman, Subcommittee on Commercial and Adminis- trative Law ........................................................................................................... 1 WITNESSES Hammonds, Bruce L., Senior Vice Chairman and CEO, MBNA America Bank, N.A., Wilmington, DE .......................................................................................... 29 Jones, Edith Hollan, Judge, U.S. Court of Appeals for the Fifth Circuit, and Member of the National Bankruptcy Review Commission, Houston, TX .......................................................................................................................... 86 Kenner, Carol J., U.S. Bankruptcy Judge, District of Massachusetts, Boston, MA ......................................................................................................................... 33 Klein, Gary, Esquire, Senior Attorney, National Consumer Law Center, Bos- ton, MA ................................................................................................................. 67 Miller, Judith Greenstone, representing the Commercial Law League of America, Birmingham, MI ................................................................................... 91 Nuss, Larry, CEO, Cedar Falls Community Credit Union, Cedar Falls, IA, representing the Credit Union National Association, Inc. ................................ 37 Sheaffer, Dean, Vice President and Director of Credit, Boscov's Department Store, Inc., Laurel Dale, PA, representing the National Retail Federation .... 24 Warren, Elizabeth, Leo Gottlieb Professor of Law, Harvard Law School, Bos- ton, MA ................................................................................................................. 103 Zywicki, Todd, Professor, George Mason University School of Law, Arlington, VA .......................................................................................................................... 97 LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING Boucher, Hon. Rick, a Representative in Congress from the State of Virginia: Prepared statement .............................................................................................. 22 Chabot, Hon. Steve, a Representative in Congress from the State of Ohio: Prepared statement .............................................................................................. 19 CUNA Publication: Issue of savingteen magazine ................................................ 39 Dodd, Hon. Christopher J., a U.S. Senator from the State of Connecticut: Prepared statement .............................................................................................. 6 Gekas, Hon. George W., a Representative in Congress from the State of Pennsylvania, and chairman, Subcommittee on Commercial and Adminis- trative Law: Prepared statement ........................................................................ 2 Grassley, Hon. Charles E., a U.S. Senator from the State of Iowa: Prepared statement: Prepared statement ........................................................................... 4 Hammonds, Bruce L., Senior Vice Chairman and CEO, MBNA America Bank, N.A., Wilmington, DE: Prepared statement ...................................................... 31 Jones, Edith Hollan, Judge, U.S. Court of Appeals for the Fifth Circuit, and Member of the National Bankruptcy Review Commission, Houston, TX: Prepared statement ...................................................................................... 88 Kenner, Carol J., U.S. Bankruptcy Judge, District of Massachusetts, Boston, MA: Prepared statement ..................................................................................... 35 Klein, Gary, Esquire, Senior Attorney, National Consumer Law Center, Bos- ton, MA: Prepared statement .............................................................................. 70 (V) VerDate 11-SEP-98 16:52 Jan 10, 2000 Jkt 061368 PO 00000 Frm 00005 Fmt 5904 Sfmt 5904 F:\WORK\COMM\031199\61368 HJUD2 PsN: HJUD2 VI Page Kohl, Hon. Herb, a U.S. Senator from the State of Wisconsin: Prepared statement .............................................................................................................. 8 McCollum, Hon. Bill, a Representative in Congress from the State of Florida: Prepared statement .............................................................................................. 21 Miller, Judith Greenstone, representing the Commercial Law League of America, Birmingham, MI: Prepared statement ............................................... 93 Nadler, Hon. Jerrold, a Representative in Congress from the State of New York: Prepared statement ................................................................................... 16 Nuss, Larry, CEO, Cedar Falls Community Credit Union, Cedar Falls, IA, representing the Credit Union National Association, Inc.: Prepared state- ment ...................................................................................................................... 64 Sessions, Hon. Pete, a Representative in Congress from the State of Texas: Prepared statement .............................................................................................. 10 Sheaffer, Dean, Vice President and Director of Credit, Boscov's Department Store, Inc., Laurel Dale, PA, representing the National Retail Federation: Prepared statement .............................................................................................. 26 Warren, Elizabeth, Leo Gottlieb Professor of Law, Harvard Law School, Bos- ton, MA: Prepared statement .............................................................................. 106 Zywicki, Todd, Professor, George Mason University School of Law, Arlington, VA: Prepared statement