Wednesday, March 23, 2005

Think It's Bad Now?



Well, this perspective hadn't fully occurred to me until just now:

Arkadi Kuhlmann, CEO of ING Direct, apparently thinks the new bankruptcy bill will actually be damaging to financial-services companies. "How's that?" you ask.

Well, as things stand today, the Citibanks and Capital Ones of the world will pretty much offer credit to anyone or anything that casts a shadow. Once they get their wish from the bankruptcy reform legislation — in the form of harder-to-obtain Chapter 7 (full) bankruptcy availability for consumers — they will be free to expand their loose lending practices even further. They'll know that the odds of having to write off bad debts due to Chapter 7 claims just went down significantly; thus they can go throttle-up with more subprime lending. And expose themselves to more bad lending decisions.

"The one-sided provisions of this bankruptcy legislation are bad news for consumers," Kuhlmann said in a recent statement. "But they are also bad news for the financial services industry. Consumers are our customers. By creating a form of debt imprisonment, this bill will hobble the most important player in the world economy — the American consumer."

According to this article, Kuhlmann is the only CEO of a U.S. bank to publicly oppose the legislation. Go figure.

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— Posted by Michael @ 11:35 PM








1 Comments:
 

Getting subprime people to pay off debt with the new bk laws doesn't mean they will pay.
Are we going to go back to the old days when people we thrown in the slammer for debt, then the debt was written off? I don't think so...

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