All the major credit card companies headquarter in Delaware – and not by chance. VISA, MASTERCARD, CHASE, DISCOVER, BARCLAYS all L-o-v-e “Credit Card Joe” Biden. Thanks to Joe Biden these companies pay no state taxes and enjoy faithful pro-credit card representation by Joe Biden. Senator Biden is responsible for DENYING CONSUMERS bankruptcy protections from credit card companies. Ole Joe made damn sure credit card debt was NOT forgiven under federal bankruptcy laws. A MAJOR WIN for the credit card companies (and Joe Biden).
‘Middle-class Joe’ cozied up to credit card companies and made filing for bankruptcy harder
“Joe Biden pretends that he’s middle-class Joe, and in reality he’s corporate Joe,” Adam Levitin, a law professor at Georgetown University who specializes in bankruptcy, commercial law, and financial regulation, told the Washington Examiner.
Biden was a key architect of and whip for the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, which made it harder for consumers to declare bankruptcy. At the time, bankruptcy filings were at a peak of more than 2 million and legislators worried that the system was being abused. After the bill became law, bankruptcy filings fell by 70 percent.
“Someone once analogized what happened in 2005 as someone looking at a hospital and saying, ‘oh my God, emergency admissions are way up. So the solution is to reduce the hours of the emergency room,’” Bruce A. Markell, a professor of bankruptcy law and practice at Northwestern University, told the Washington Examiner.
Lenders like Citigroup, Bank of America, JP Morgan, Chase and Wells Fargo aggressively lobbied for changes to the bankruptcy code. Delaware-based credit card company MBNA, which Bank of America acquired in 2006, was one of the most ardent supporters of the bill.
Biden’s senate campaign committees received $208,175 from MBNA employees from 1989 through 2010, the second-largest source of contributions, according to the Center for Responsive Politics’ OpenSecrets.org. In the 2006 election cycle, employees from Citigroup employees donated $18,825, those from Bear Stearns donated $15,000 and from Goldman Sachs donated $10,500.
In total, Biden received $1,126,375 from those in the securities and investment industry, $304,475 from finance and credit company workers, and $295,900 from commercial bank employees.
Biden’s ties to MBNA and banks span beyond political contributions from its employees. Home sales, family jobs, and free trips caused critics to dub him “the senator from MBNA.”
In February 1996, MBNA executive John Cochran bought Biden’s home outside Wilmington for the full $1.2 million asking price, while other similarly appraised houses at the time sold for around $100,000 to $200,000 less than asking price. MBNA then paid Cochran $330,115 that year for moving expenses and noted that he lost $210,000 due to the sale of his Maryland home.
Cochran also donated $2,000 to Biden’s 1996 Senate reelection campaign, FEC records show. MBNA in 1997 flew Biden and his wife to Maine so he could give a speech, Biden’s Senate financial disclosure showed.
Biden’s son Hunter started a job MBNA in November 1996 after Biden won reelection, in part because he wanted to be close to home. After leaving the company, Hunter became a lobbyist, but continued collecting an undisclosed amount of money from MBNA as a consultant — all while the bankruptcy bill moved through Congress. MBNA said that Hunter never lobbied for them and that his work had nothing to do with the bankruptcy bill.
The Wilmington News-Journal noted in 2008 that Biden was “neighbor to wealthy and powerful company titans and du Pont family members,” one of the richest families in America.
A spokesperson for Biden did not respond to a request for comment, but in a 2008 NBC interview Biden downplayed his family’s relationships with MBNA executives and rejected the notion that he was in the “pocket of the corporate lobbyists.” Those who defended Biden’s support for the bankruptcy bill said that he was looking out for the interests of Delaware’s economy, a major financial and banking center.
Biden’s support for the 2005 bankruptcy bill sets him apart from progressive Democrats running for president and other Democratic leaders in Congress. Independent then-Rep. Bernie Sanders of Vermont and Democratic Sens. Dianne Feinsten of California, Barack Obama of Illinois, and Chuck Schumer of New York all voted against the bill. Elizabeth Warren, not yet a senator, fought against the changes.
“The bill was a big, fat, wet kiss for credit card companies and auto lenders. It ensured that private student loans could not be discharged in bankruptcies,” Levitin said. “It also exacerbated risky mortgage lending.”
New York Federal Reserve researchers later said that the bankruptcy bill could have been a contributing factor in destabilization that led to the subprime mortgage crisis. Analysts have said that the bill made private student loans a lucrative business and linked the bil l to the rise in retail businesses filing for bankruptcy.
“Biden’s got some explaining to do, I think, to the Democratic electorate,” said Levitin, the Georgetown University law professor. “I don’t think millennials in particular have kind of pieced together that Biden’s involved with their student loan debt.”
It is difficult, however, to show what kind of direct benefit the bankruptcy bill had on banks and lenders. Markell said that most of the effects from bill are not quantifiable.
“I think the tragedy is the people who needed, could have used bankruptcy to make themselves better and more productive, and couldn’t,” Markell said.
Obama Aides Defend Bank’s Pay to Biden Son
During the years that Senator Joseph R. Biden Jr. was helping the credit card industry win passage of a law making it harder for consumers to file for bankruptcy protection, his son had a consulting agreement that lasted five years with one of the largest companies pushing for the changes, aides to Senator Barack Obama’s presidential campaign acknowledged Sunday.
Mr. Biden’s son, Hunter, received consulting fees from the MBNA Corporation from 2001 to 2005 for work on online banking issues. Aides to Mr. Obama, who chose Mr. Biden as his vice-presidential running mate on Saturday, would not say how much the younger Mr. Biden, who works as both a lawyer and lobbyist in Washington, had received, though a company official had once described him as having a $100,000 a year retainer. But Obama aides said he had never lobbied for MBNA and that there was nothing improper about the payments.
Campaign officials acknowledged that the connection between the Bidens and MBNA, the enormous financial services company then based in their home state of Delaware, was one of the most sensitive issues they examined while vetting the senator for a spot on the ticket.
Mr. Biden’s support for the bankruptcy changes, which were signed into law in 2005, puts him at odds with Mr. Obama of Illinois, who opposed the bill and has criticized the presumptive Republican nominee, Senator John McCain of Arizona, for supporting it. Consumer advocates and other Democratic allies remain sharply critical of Mr. Biden’s actions, saying in recent days that they could hamper the campaign’s efforts to attack the Republicans over their handling of the nation’s credit crisis.
The financial services industry began seeking relief from Congress in the mid-1990s from an increase in bankruptcies that was cutting into its profits. Its initial support came from Republican lawmakers, who repeatedly introduced bills to make it more difficult for consumers to erase their debts. During that time, executives at MBNA, which was bought in 2006 by Bank of America, began donating heavily to both major political parties and many national politicians, including Mr. Biden.
In late 1996, the company hired the younger of Mr. Biden’s two sons, Robert Hunter Biden, known as Hunter, who had just graduated from Yale Law School, as a lawyer. The company promoted Mr. Biden to senior vice president by early 1998. And after the younger Mr. Biden worked at the Commerce Department on electronic commerce issues from 1998 to 2001, MBNA hired him back on a monthly consulting contract to advise it on such issues, aides said.
Consumer advocates say that Senator Biden was one of the first Democratic leaders to support the bankruptcy bill, and he voted for it four times — in 1998, 2000, 2001 and in March 2005, when its final version passed the Senate by a vote of 74 to 25.
Travis Plunkett, legislative director of the Consumer Federation of America, a consumer group that opposed the bill, said that Senator Biden had provided a “veneer of bipartisanship” that eventually helped the credit card companies win over other Democrats. “He provided cover to other Democrats to do what the credit industry was urging them to do,” Mr. Plunkett said.
Hunter Biden was a consultant for the financial company MBNA from 2001 to 2005.
Aides to the Obama campaign said Sunday that Senator Biden’s goal was always to strike a workable compromise between the competing interests on the bankruptcy bill, and that he was not influenced by his son’s work for MBNA or the campaign donations. They said he had sought several changes in the bill to protect consumers that upset MBNA executives, then the largest employer in Delaware, while acknowledging that he also voted against other amendments proposed by other Democrats.
Hunter Biden, through his assistant at his law firm, Oldaker Biden & Belair, referred a request for comment to the Obama campaign. James Mahoney, the head of corporate communications for Bank of America, said the consulting arrangement had ended by the time Bank of America took over MBNA in January 2006.
“Senator Biden has a 35-year record fighting for people against powerful interests, whether it’s drug companies, oil companies or insurance companies,” David Wade, a spokesman for the Obama campaign, said in a statement. “He took plenty of knocks from the largest employer in his state because he demanded changes in the bankruptcy bill. But legislating requires compromise. Senators cast tough votes. Congress worked on the bankruptcy bill for nearly a decade, over five Congresses, to forge a bipartisan compromise.”
Mr. Wade added: “Senator Biden took on entrenched interests and succeeded in improving the bill for low-income workers, women and children. There were times when amendments on both sides would have blown up a bipartisan compromise backed by three-quarters of the Senate. At those moments, Senator Biden had to make the tough calls and voted to pass a bill.”
Mr. Wade said Senator Biden took extra steps to protect consumers in votes to require people in bankruptcy to continue paying child support or alimony. He also took steps to affirm that the bill exempted debtors who have serious medical problems, are veterans or are in the armed service, the aide said.
But a review of the legislative record finds as many instances when Mr. Biden joined Republicans to defeat attempts by his Democratic colleagues, including Mr. Obama, to soften the bill’s impact on those same constituencies. He was one of five Democrats in March 2005 who voted against a proposal to require credit card companies to provide more effective warnings to consumers about the consequences of paying only the minimum amount due each month. Mr. Obama voted for it.
Mr. Biden also went against Mr. Obama to help defeat amendments aimed at strengthening protections for people forced into bankruptcy who have large medical debts or are in the military; Mr. Biden argued that the amendments were unnecessary because the legislation already carved out exemptions for those debtors. And he was one of four Democrats who sided with Republicans to defeat an effort, supported by Mr. Obama, to shift responsibility in certain cases from debtors to the predatory lenders who helped push them into bankruptcy.
In many of these battles, Mr. Biden’s Democratic colleagues often voiced their frustration with the big financial interests arrayed against them. Senator Paul Wellstone specifically cited MBNA during a floor debate in March 2001 over his call for stronger protections for debtors forced into bankruptcy because of medical bills — an amendment that Mr. Biden would later vote against.
“It just so happens that the people who find themselves in terrible economic circumstances through no fault of their own — major medical bills, they have lost their jobs, or there has been a divorce — it is my view as a former political scientist and now a senator for the State of Minnesota that those people do not have the same kind of clout that MBNA Corporation has,” Mr. Wellstone said.
Mr. Biden’s supporters also point out that the Republicans controlled the Senate for much of the time when the bankruptcy bills were under consideration. MBNA employees have given Mr. Biden more than $214,000 in campaign donations over the years, the largest amount in his coffers tied to any single company. But the company’s employees have given even more lavishly to President George W. Bush and top Republican lawmakers.