Biting the hand that feeds you

From the NYT:

Big banks have formed an unusual alliance with consumer advocates to urge the government to allow huge portions of credit card debt to be forgiven, a turnabout from recent years when the banking industry lobbied strenuously to make it harder for consumers to erase their credit card debts in bankruptcy.

Remember the bankruptcy bill?  I do:

Bankruptcy reform has been a top priority of banks, credit-card companies, and retailers for the past decade. The credit card industry has given $25 million to federal candidates and the political parties since 1999 and commercial banks have given $76.2 million, according to the Center for Responsive Politics, a Washington, D.C.-based watchdog group. More than 60 percent of the donations went to Republicans.

Opponents of the first revamp of the nation’s personal bankruptcy laws in more than a quarter-century said the legislation would deal a ruinous blow to the overwhelming majority of those forced to declare personal bankruptcy: moderate- and low-income families, many of them black or migrant or with only one parent; and individuals of modest means hit with large divorce losses or medical expenses.

What happened?  Oh, right – it was a terrible idea in the first place.  They got (more) greedy and it came back to haunt them.  I say tie debt forgiveness to a whole new set of lending laws, a set that really, really cracks down on predatory lending and increase bankruptcy protection.  Don’t provide another giveaway to another set of giant companies.

For a detailed recount of how it passed way back in 2005, see this incredible DK diary.

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