The Senate Judiciary Committee is scheduled to consider a new bankruptcy bill, S. 257, the Consumer Credit Fairness Act, this week, including a proposed amendment that could have major ramifications for businesses dealing with a customer in bankruptcy. The bill was originally scheduled for consideration at an Executive Business Meeting on June 4, but any discussion was held over until the committeeâ€™s next business meeting set for June 11 at 10am.
Any amendments to S. 257 will be proposed at this business meeting, and Sen. Jeff Sessions (R-AL), the committeeâ€™s ranking member, is set to introduce an amendment to the bill that would combat the controversial practice of forum shopping, which is when businesses choose where they file bankruptcy. Specifically, the amendment would require debtors to file for protection from their creditors where their principal base of operations is located. A nearly identical measure was recently proposed by NACM as part of the associationâ€™s Issue Brief and Proposed Changes to the BAPCPA, which was submitted to the House Judiciary Committee and will be circulated among other like-minded associations in the future.
The bulk of S. 257 applies to consumers and aims to amend the Bankruptcy Code to require courts to disallow any claim arising from a â€śhigh cost consumer credit transaction.â€ť A number of banking and business associations have come out in opposition to the bill, saying that its cost to consumer creditors would outweigh its benefits to consumer debtors.
NACMâ€™s Government Affairs Committee, and specifically its Bankruptcy Work Group, has been hard at work monitoring the progress of the associationâ€™s proposed changes, as well as any other legislation that could affect business-to-business creditors. For more information on NACM's efforts, visit the advocacy page on the organizationâ€™s website by clicking here. If you have anything youâ€™d like to share regarding any legislative issues, feel free to send your comments to email@example.com. All future updates on Senator Sessionsâ€™ amendment, the NACM Issue Brief and all related issues will be posted in NACM's eNews and on the advocacy page.
Jacob Barron, NACM staff writer