ACB: Press Releases

Contact:	Robert Schmermund (202) 857-3104 Jim Eberle (202) 857-3145	Jim Eberle (202) 857-3145 (work) (703) 893-2593 (home) [email protected]	For Immediate Release December 7, 2000 #00-136
E-mail: [email protected]

ACB APPLAUDS PASSAGE OF BANKRUPTCY BILL

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Statement by Robert R. Davis, managing director of government relations, America’s Community Bankers, on the bankruptcy reform bill passed by the Senate today:

America’s Community Bankers applauds passage of bankruptcy reform legislation by the Senate today as a “win-win” for consumers and community bankers. Since the bill was approved overwhelmingly by Congress, we strongly urge President Clinton to sign the measure into law.

The bill’s “needs-based” approach will help distinguish between debtors who have virtually no assets or earning power and debtors with the ability to repay all or a portion of their obligations. This protects consumers from bearing the costs of those debtors who abuse the system.

Community banks have a long history of working with borrowers who find themselves in dire financial straits. This legislation reinforces the ability of lenders and borrowers to work cooperatively in resolving financial difficulties before bankruptcy protection is sought, as well as during the bankruptcy process.

The legislation will also hold down the cost of home mortgage loans by prohibiting federal district courts from reducing the value of secured mortgage loans in bankruptcy proceedings. The U.S. Supreme Court outlawed “cramdowns” in 1993, but the practice persists.

Finally, the legislation would clamp down on the abusive practice of repeat bankruptcy filings that make it more difficult and time consuming for lenders to collect from debtors who can afford to repay.

America’s Community Bankers is the national trade association committed to shaping the future of banking by being the innovative industry leader strengthening the competitive position of community banks. To learn more about ACB, visit www.AmericasCommunityBankers.com.

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