The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005

Can 104 non-partisan professors of bankruptcy and commercial law be wrong? In this letter, the professors argue that the recent incremental increase in personal bankruptcies is not due to "abuse" by people trying to shun their debts, but rather to "abuse" by the credit card industry:

The bankruptcy filing rate is a symptom. It is not the disease. Some people do abuse the bankruptcy system, but the overwhelming majority of people in bankruptcy are in financial distress as a result of job loss, medical expense, divorce, or a combination of those causes. In our view, the fundamental change over the last ten years has been the way that credit is marketed to consumers. Credit card lenders have become more aggressive in marketing their products, and a large, very profitable, market has emerged in subprime lending. Increased risk is part of the business model. Therefore, it should not come as a surprise that as credit is extended to riskier and riskier borrowers, a greater number default when faced with a financial reversal. Nonetheless, consumer lending remains highly profitable, even under current law.

This Act is a bad idea. It benefits the credit industry at the expense of the little guy. Hell, even conservative professor Glenn Reynolds is against it. (hat tip to Instapundit) Unfortunately, many Democratic senators who should have known better supported the bill. (Because they've been bought off with campaign contributions from the credit industry?? You decide.)

If you don't like it, please tell your representative in the House now, before the damn thing passes and goes on to Bush for his certain signature: Click here to email your representative with your thoughts.