‘Cramdown,’ credit card bills have shaky support

Senate Democratic leaders on Thursday indicated they lack the votes needed to advance controversial bills that would revise bankruptcy laws and credit card practices.

Senate Majority Leader Harry Reid (Nev.), Majority Whip Dick Durbin (Ill.), Democratic Conference Vice Chairman Charles Schumer (N.Y.) and conference Secretary Patty Murray (Wash.) avoided any guarantees that they can pass the legislation being opposed by the financial industry as well as most Republicans.

{mosads} “There will come a time when this bankruptcy provision will pass,” Reid said in regard to “cramdown” legislation, which would allow bankruptcy judges to revise mortgage terms for homeowners facing foreclosure.

The leaders also had harsh words for a financial industry they say is abandoning Americans by abandoning support for the bills — though they avoided pointing any blame at the Obama administration, which has pushed hard for new credit card laws but has been less forceful on the bankruptcy bill.

“This legislation is really tied to making the economy better, and amazingly enough the banking industry is opposed to it,” Schumer said. “They’re being almost lemming-like, for their immediate, short-term interests.”

Reid said the Senate next week will take up the credit card reform bill, which would restrict companies’ ability to raise rates on balances. Asked if he had 60 votes, the majority leader said, “We’ll find out.”

The bankruptcy provisions are headed for a Senate vote later Thursday. Durbin has been leading efforts for years to rewrite bankruptcy laws and has been a major advocate for the cramdown bill. Durbin said the American Bankers Association and the Community Bankers Association “walked away from the table.”

“I don’t believe we’ll get out of this recession until we deal honestly and forthrightly with this foreclosure crisis,” Durbin said. “And I just don’t know what it will take to bring people around to the belief that these bankers don’t have the right formula for the future of this country’s economy.”