Al Franken Proposes Sweeping Changes to Bankruptcy and Credit Card Laws

Minnesota Democratic Senatorial candidate Al Franken is calling for the repeal of the 2005 Bankruptcy Act and a ban on “universal default” as well as on other unilateral changes to payment terms from credit card companies.

Franken’s Senate race opponent, incumbent Republican Norm Coleman, voted for the 2005 bill that changed bankruptcy rules for consumers.

“Simply put, tens of thousands of Minnesotans have been hurt by Norm Coleman’s allegiance with the banking industry,” Franken said during a roundtable Wednesday. “It’s time for a change in Washington, and it’s time for common-sense reforms to level the playing field for Minnesota’s middle class. Norm Coleman is a wholly-owned subsidiary of George Bush and the special interests. I’ll be a Senator on your side.”

According to Franken, Americans are carrying over $2.5 trillion in consumer debt – an increase of 22 percent since George Bush took office. The average household’s credit card debt is over $8,500.

So Franken advocates that credit card issuers give prompt credit for payments recovered and that a ban for interest on late fees and on arbitration clauses.

The candidate also wants to:

• Require that applications use plain language and at least size-12 font.
• Require that credit card companies inform borrowers on each bill about the long-term costs of paying only the minimum balance – and how much they’d have to pay each month to eliminate their balance within three years.

In addition to a repeal of the 2005 Bankruptcy Act, Franken called for additional changes in bankruptcy law:

• An exemption in the bankruptcy law for individuals who can prove they filed for bankruptcy because of medical expenses.
• Prioritization of child support and alimony payments before credit card debt in bankruptcy proceedings.