Orrin Hatch: “I oppose the amendment. Under the provision, in any 707(b) case brought by a creditor, the court would consider whether…”

“I oppose the amendment. Under the provision, in any 707(b) case brought by a creditor, the court would consider whether the creditor had used good faith in the extension of credit. This determination necessarily would involve looking at underwriting decisions. The bankruptcy court shall not be asked to interfere in the complicated process of making credit underwriting decisions. This is particularly true when current underwriting practices are quite successful, with an average of 95 to 97 percent of consumer credit extended today repaid on time. Mr. President, this amendment permits new uncontrolled and virtually unlimited inquiries into creditor conduct. It encourages complicated and involved discovery and burdensome court proceedings. It introduces unwarranted defenses to strong enforcement of the needs-based provisions of S. 1301, this bill. The amendment permits a debtor to avoid repaying all his creditors by attacking the good faith of any creditor who brings a motion to enforce the needs-based provisions. And the amendment has no standard for what is good faith. So this is a killer amendment. Moreover, S. 1301 already contains numerous provisions to make sure creditors are acting appropriately.”