THE WHITE HOUSE

Office of the Press Secretary

                  TEXT OF A LETTER FROM THE PRESIDENT
              TO THE SPEAKER AND DEMOCRATIC LEADER OF THE
                    HOUSE OF REPRESENTATIVES AND THE
             MAJORITY AND DEMOCRATIC LEADERS OF THE SENATE

June 9, 2000

Dear Mr. Speaker: (Dear Mr. Leader:)

I write to urge a fair resolution of the open issues in discussions on bankruptcy reform. I have long made clear my support for legislation that would encourage responsibility and reduce abuses of the bankruptcy system on the part of debtors and creditors alike. We also must ensure that a reasonable fresh start is available for those who turn to bankruptcy as a last resort when facing divorce, unemployment, illness, and uninsured medical expenses. Bankruptcy reform legislation should strike the right balance.

The House-passed bill was so one-sided that I would have vetoed it. The Senate-passed bill's bankruptcy provisions represented a better attempt to balance legitimate debtor and creditor interests, although I had serious concerns about some aspects. My Administration has watched carefully as the staff and informal conferees have sought to reconcile these two bills. While there appears to be some informal progress on some outstanding issues, it is very important that the resolution of these issues be fair and that we ensure that we do not erode protections for all debtors -- when targeting the few who abuse the system. The outcome will help determine whether the final bill tips the scales.

I am concerned, for example, that the final bill:

• may not adequately address the problem of wealthy debtors who use overly broad homestead exemptions to shield assets from their creditors;
• may weaken important credit card disclosure provisions that will help ensure consumers understand the implications of the debt they are incurring;
• may eliminate protections for reasonable retirement pensions that reflect years of contributions by workers and their employers; and
• may include an anti-consumer provision eliminating existing law protections against inappropriate collection practices when collecting from people who bounce a check.

Finally, I am deeply disturbed that some in Congress still object to a reasonable provision that would end demonstrated abuse of the bankruptcy system. We cannot tolerate abusive bankruptcy filings to avoid the legal consequences of violence, vandalism, and harassment used to deny access to legal health services. An effective approach, such as the one offered by Senator Schumer's amendment, should be included in the final legislation.

I sincerely hope that balanced, bipartisan bankruptcy reform will be completed this year, but I will not hesitate to veto unfair legislation that fails the test of balance.

Sincerely,

WILLIAM J. CLINTON

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