Simply Politics and News

[thepennyking]

Going For Broke:
Big Money, Big Banks & Bankruptcy

The consumer credit industry - lobbying hard for a drastic rewrite of the nation's bankruptcy laws - has given, on average, more than $100,000 in political action committee (PAC) contributions to each Member of the Senate since 1987, according to a Common Cause analysis. These same Senators are poised to vote on bankruptcy legislation in September.

In addition to generously giving to Members of Congress, consumer credit interests have given millions in soft money to the political parties and spent millions on aggressive lobbying, Common Cause found.

These investments have already paid off in the House, which speedily passed a creditor-backed bankruptcy bill in June that creditors claim would enable them to recoup an estimated $4 billion a year in consumer debts that they now must write off. The bill passed despite the pleas of bankruptcy judges and scholars, urging Congress to move more slowly, and the protests of consumer activists who claimed the bill would jeopardize an important financial safety valve for thousands of lower- and middle-income families.

The financial sector players who dominate the consumer credit industry - banks, credit card companies, consumer finance companies, savings and loans, and credit unions - have been a dominant force in Washington's political money game for more than a decade. The analysis of their PAC contributions to congressional candidates and soft money donations to national party committees from 1987 through March 1998 found that:


The consumer credit industry has given $61.6 million in political donations since 1987, including $50.8 million in PAC contributions and $10.8 million in soft money donations.

Of all current House and Senate Members, 97 percent took PAC contributions from banking and consumer credit interests since 1987 - 420 Representatives and 98 Senators. And, nine out of 10 Senators and more than half of the House have received $25,000 or more from consumer credit interests since 1987.

TOP CONSUMER CREDIT INDUSTRY PAC & SOFT MONEY DONORS
1/1/87 through 3/31/98
Donor Total Contributions
Amer Bankers Assn* $8,444,800
NationsBank Corp*# 5,367,788
America's Community Bankers* 3,465,624
Credit Union Natl Assn* 3,247,956
BankAmerica Corp*# 2,845,058
Chase Manhattan Corp* 2,447,629
Citicorp* 2,365,314
Beneficial Corp* 2,177,946
Independent Bankers Assn of Amer 1,792,610
Banc One Corp* 1,498,991
Amer Express Co* 1,324,783
MBNA Corp* 1,222,036
Household Intl Inc* 1,139,661
First Chicago NBD Corp* 961,450
Dean Witter Reynolds Inc* 905,506
* Includes contributions from subsidiaries and/or executives.
# NationsBank Corp and BankAmerica Corp received final regulatory approval on August 17, 1998 for their proposed merger.


On average, current Members of the Senate have received $100,836 each from consumer credit industry PACs. Current Representatives have received, on average, $47,724 from these special interests.

Industry supporters Representatives Bill McCollum (R-FL) and Rick Boucher (D-VA), whose 1997 bill was the cornerstone of the creditors' campaign, received more than $528,000 combined from consumer credit PACs since 1987.

The consumer credit industry has dramatically increased its soft money giving in recent years, from $1.2 million during the 1991-1992 election cycle to more than $5.5 million during 1995-1996.

The consumer credit industry's top three givers were: the American Bankers Association, $8.4 million in PAC and soft money since 1987; NationsBank Corp, $5.4 million; and America's Community Bankers, the savings and loan lobbying group, $3.5 million (see box).

By comparison, the tobacco industry's total PAC and soft money donations since 1987 are less than half of what the consumer creditors gave during the same period.
The bill passed by the House in June fulfills one of the consumer credit industry's major goals: a dramatic rewrite of our nation's bankruptcy laws going far beyond the recommendations of a national bankruptcy review commission convened by Congress.

"Congress has a legitimate interest in making changes in the bankruptcy law to avoid abuses of the law by wealthy individuals who want to shirk their debt," Common Cause President Ann McBride said. "But that congressional review has been distorted by millions of dollars of campaign contributions. In fact, while Congress is rushing to pass new bankruptcy legislation, it is ignoring warnings of experts and consumer activists who argue that ordinary Americans are not being adequately considered in this creditor-driven push for sweeping legislation."


http://www.commoncause.org/publications/goingforbroke.htm