Articles Posted in Bills In Congress


The Wall Street Journal has posted an article about a group of legislators who are pushing for the Treasury Department to close a banking “loophole.” This loophole allows for creditors to automatically garnish funds, such as Social Security or disability payments, from debtors’ bank accounts.

Federal law says creditors can’t take Social Security, disability, veterans’ and children’s survivor benefits to pay a debt. But the federal law doesn’t say how money deposited directly into bank accounts is to be protected — a gap that has given banks the ability to seize such funds.

Ellen E. Schults, author of the article, says that banks freeze customers’ accounts when they receive notice from creditors to do so, and then charge fees for freezing the account and then overdraft fees. People often don’t know that their benefit money isn’t supposed to be seized.



Credit Slips is a wonderful blog written by professors about consumer issues. The most recent post is by Elizabeth Warren, a Harvard professor. The title is The New Politics of Bankruptcy.

We recommend you read this article as it discusses the beginnings of a backlash against those in Congress who voted for the change in the bankruptcy law that has harmed so many consumers across the country. Here is a brief excerpt:

Recently Albert Winn, a long-time Congressman from Maryland, was challenged in the primary for his seat. His opponent, Donna Edwards, campaigned on several issues, but among the most prominent was her opponent’s vote for the 2005 bankruptcy legislation. He had ignored the needs of his constituents, she argued, and favored the financial interests whose executives (not coincidentally) gave his campaign financial support. Ms. Edwards defeated that incumbent in a landslide (60%-32%).


We have discussed in some detail the problems with mandatory arbitration for Alabama consumers. Paul Bland of Public Justice alerted us to an article in the L.A. Times that we had missed dealing with movement in Congress to protect consumers from having to deal with mandatory arbitration.

Here are some excerpts of this well written and balanced article:

Critics of the provisions say they deny consumers and employees a basic American principle: the right to go to court.

“People from all walks of life — employees, investors, homeowners, those enrolled in HMOs, credit card holders and other consumers — often find themselves strong-armed into mandatory arbitration agreements,” said Sen. Russell D. Feingold (D-Wis.), who is sponsoring one of the measures aimed at making arbitration voluntary rather than mandatory.

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