Bankruptcy Law Changes Less Likely With Joe Biden on the Ticket
Ever since the passage of the BAPCPA changes to the bankruptcy laws in 2005, consumer advocates have held out hope that a new presidential administration might roll back some of the more hard line changes to the Bankruptcy Code. Although support for the BAPCPA laws was bi-partisan, some Democrats have attempted to tie the nation’s housing crisis in with the changes to the Code. You may remember that earlier this year Democratic leadership attempted to push through legislation that would permit bankruptcy judges to change the terms of mortgages.
Senator Obama’s selection of Senator Joe Biden of Delaware would seem to dim the hopes of consumer advocates hoping for consumer friendly changes to the bankruptcy laws. Delaware, as you may know, is the home to corporate headquarters of many large and small corporations. According to StreetDirectory.com, businesses choose Delaware simply because of their flexible corporate laws, highly respected Court of Chancery, a business-friendly State Government, and a customer service oriented Staff of the Delaware Division of Corporations.
Given that most of the large credit card banks are incorporated in Delaware, it should be no surprise that Senator Biden was one of only three Democrats who voted for the BAPCPA changes to the bankruptcy law and that he supported it enthusiastically. My colleague Carmen Dellutri, writing in the Bankruptcy Law Network blog, comments that when reflecting on the Senate debate about the BAPCPA laws, “the first thing that comes to mind is the passion that Senator MBNA (Biden) put into getting the bill passed. He was a staunch supporter of the bill. He was also very instrumental in getting many of the amendments stricken [that would have benefited consumers over lenders]. ”
The Associated Press reports that during the time the BAPCPA laws were being debated in the Senate, credit card lender MBNA paid a consulting fee to Hunter Biden, Senator Biden’s son. Further, the AP reports that “MBNA employees have poured more than $200,000 into Biden’s Senate campaigns over the past two decades, making donors working for the credit card company the senator’s largest source of campaign money.”
It is, of course, unclear how much influence a vice president Biden would have on Barack Obama or his policies. However, it would certainly not be surprising if bankruptcy reform is not at the top of the list should Mr. Obama find himself in the White House.
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Comments on Bankruptcy Law Changes Less Likely With Joe Biden on the Ticket
It will be interesting to see if personal bankruptcy rules will receive a lot of attention over the next 2-3 years. With the rate the economy is going more and more people will default on their home and get kicked into bankruptcy. There will probably be a lot more attention at the federal level on bankruptcies once they get past this wave of corporate bankruptcies – see AIG, Lehman bros, etc.
Thanks for the informative post. I always wondered why all the banks were headquartered in Deleware. I am also hearing some concern that some form of tort reform may be instituted by an Obama administration, as a compromise measure in order to pass his health care reforms.