Senate Kills Bankruptcy Mortgage Amendment

The Senate has voted to kill an amendment that would have prevented mortgage lenders from pursuing claims in bankruptcy court if they violated a federal anti-predatory-lending law.The Senate voted 58-40 against the amendment by Sen. Richard Durbin, D-Ill., who wanted to attach it to a consumer bankruptcy bill. Senator Durbin offered a similar amendment in 2001 and it failed by only one vote. The Illinois senator argued that predatory lenders should not be allowed to seek repayment in bankruptcy court if they "materially" violated the Home Ownership and Equity Protection Act. The Senate "wisely defeated" the amendment, said Wright Andrews, executive director of the Coalition for Fair and Responsible Lending, which represents subprime lenders. The problems of predatory lending should be addressed by comprehensive lending legislation, not in a bankruptcy bill, he said. "We hope that the new bipartisan bill that Reps. Bob Ney, R-Ohio, and Paul Kanjorski, D-Pa., have said they will introduce soon will offer a balanced and workable framework that Congress can use this year to pass comprehensive consumer protection legislation," Mr. Andrews said.