BANKRUPTCY REFORM MAY BE UP IN SMOKE FOR THIS SESSION

September 14, 2001

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House Financial Services Committee Chairman Michael Oxley (R-Ohio) yesterday suggested that the committee’s legislative priorities might need to be re-evaluated in light of Tuesday’s attacks — which have thrown New York City’s financial district into chaos and raised concerns about the soundness of the overall financial system, CongressDaily reported. Oxley and Financial Services Committee ranking member John LaFalce (D-N.Y.) said the destruction to both human life and infrastructure touch on many parts of the committee’s jurisdiction — including securities, insurance and banking — and would require the panel’s near-term attention.

Money laundering legislation, which was already a committee priority, will receive heightened attention, given that the terrorists were obviously well funded. When asked about the fate of such bills as bankruptcy reform legislation, Oxley said it is “too early to tell” what the schedule might permit.

LaFalce expressed the desire to see both SEC fee reduction and bankruptcy reform legislation off the table. While noting that the SEC now requires an influx of skilled personnel more than ever,he expressed particular distaste for the bankruptcy bill. Acknowledging that the economy was sputtering and potentially headed for a recession even before Tuesday’s attack, LaFalce said it was especially dangerous to shut off the “safety valve” provided by bankruptcy.