[JURIST] The US Senate Judiciary Committee [official website] held a hearing Tuesday to investigate "abusive credit card practices and bankruptcy" [hearing materials]. The hearing, chaired by Senator Sheldon Whitehouse (D-RI) [official website], was held in conjunction with the proposed Consumer Credit Fairness Act (CCFA) [S. 257 text, PDF], which would disallow bankruptcy claims for consumer credit card debt bearing high interest rates. The Senate committee heard testimony from individuals affected by high credit card interest rates, as well as from experts including law professors Adam Levitin and Mark Scarberry and researcher David John [testimonies, text]. In his opening remarks, Whitehouse said:

I have introduced legislation that would give consumers leverage to negotiate for reasonable rates with their lenders and ban abusive lenders from using the bankruptcy court system to enforce their claims. Under the Consumer Credit Fairness Act, or CCFA, claims in bankruptcy stemming from consumer credit agreements carrying interest above a variable threshold – currently 18.5% – would be disallowed. With the leverage of a bankruptcy threat, a customer struggling under a 30% penalty rate could negotiate for more reasonable terms. In addition, bankruptcy filers with debts carrying effective interest rates above the threshold would be exempt from the so-called means test, a tactic that was enacted in the bank-written 2005 reforms to make it more difficult to enter bankruptcy. In practice, the means test delays relief in bankruptcy, keeping consumers in the "sweat box" of credit card debt.