Welly, welly, well. After pushing like mad for years to make it harder for consumers to declare bankrupty, the big credit card companies, banks, and lenders thought they had it made. The bill finally passed, making life that much harder for people who had fallen on hard times.
Well, there's a small bit of schadenfreude to be gleaned from the bill's passage: apparently, it's destroyed the big lenders' profits for this quarter, and possibly even for this year. More after the jump.
According to
The New York Times News Service, "the avalanche of petitions, and the lines of debtors streaming out the courthouse doors even caught the credit card issuers who supported the new law by surprise." Apparently,
...the nation's five biggest credit-card-issuing banks have said that the unexpectedly large flood of filings shaved hundreds of million of dollars off their earnings in the third quarter. With tens of thousands of petitions still being processed and Hurricane Katrina's impact on cardholders still being sorted out, the bankruptcy rush is likely to result in well over a billion dollars worth of losses by the end of the year.
I'll leave it to the economists among us to speculate what kind of effect this will have long-term, but I was snidely glad to see that even gargantuan banks should be careful of what the hell they wish for.