Barack Obama Vs. John McCain on Bankruptcy Reform

July 28, 2008

In recent campaign stops Senator Barack Obama, United States Presidential hopeful, has addressed his concerns about bankruptcy law and criticized Senator John McCain’s position of “siding with banking industry lobbyists” and failing to support steps which Senator Barack Obama claims would help senior citizens and families who are desperate to pay medical bills or stop home foreclosures.

Senator Barack Obama is now proposing bankruptcy reform which would eliminate paperwork, means tests and credit counseling to expedite the bankruptcy process. In addition, Senator Barack Obama would like to create a minimum homestead exemption for qualifying individuals which would allow them to keep some of their home’s value.

Obama’s criticism of John McCain follows McCain’s vote of the Bankruptcy Abuse Prevention Consumer Protection Act (BAPCPA) of 2005, which critics claimed favored credit card issuers, car loan lenders and mortgage companies and was used to take more money from the consumer. Senator John McCain however, called the bill “…an important step toward a fair and balanced approach to restoring personal responsibility to our federal banking system.”

Seventy-four senators voted for BAPCPA and 24 senators voted against the measure. Barack Obama opposed the measure claiming “…. I think they were bad ideas, because they were pushed by the credit card companies, they were pushed by the mortgage companies, and they put the interests of those banks and financial institutions ahead of the interests of the American people. And this is typical.”

Senator Barack Obama has made bankruptcy a campaign issue in recent campaign stops. In a recent speech outside of Atlanta he criticized Senator McCain by saying “He [McCain] would continue to allow the banks and credit card companies to tilt the playing field in their favor, at the expense of hardworking Americans.” And “Like the president he hopes to succeed, Senator McCain does not believe the government has a real role to play in protecting Americans from unscrupulous lending practices.” McCain spokesman Tucker Bounds countered all Barak Obama’s attacks by noting that eighteen democrats and John McCain were all part of a bipartisan effort by the Senate to create a comprehensive bankruptcy bill.

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