Financial Impact of Katrina

["David Farber" <dave () farber net>]

-----Original Message-----
From: "Paul Levy"<plevy () citizen org>
Sent: 02/09/05 3:35:48 PM
To: "dave () farber net"<dave () farber net>
Subject: Re: Financial Impact of Katrina

This message raises an important question about disaster relief that deserves to be answered.  National credit card 
companies and financial institutions are constantly running to Congress for protection from this and that form of state 
regulation (for example, National Bank Act preemption of state law, Federal Arbitration Act preemption of state rules 
allowing citizens to sue in courts).  Maybe it's time Congress thought about putting a condition on that protection -- 
that national financial institutions should agree to a moratorium, only for consumers in the hardest hit areas, barring 
the imposition of interest and penalties for a few months while they recover.

Paul Alan Levy
Public Citizen Litigation Group
1600 - 20th Street, N.W.
Washington, D.C. 20009
(202) 588-1000
http://www.citizen.org/litigation

> > > Deepak Gupta 9/2/2005 3:24:21 PM >>>
I have been working on a SCAP case this week with a lawyer from New Orleans whose law firm has temporary relocated to a 
hotel in Houston.  Today, he posted the following on the group blog run by Professor Elizabeth Warren:
http://warrenreports.tpmcafe.com/story/2005/9/2/101357/1816 
The lawyer from New Orleans is named Mickey Allweiss

 
***
 
I am a name partner in a mid-size New Orleans law firm supported by an excellent staff of decent and devoted employees. 
My partners and I work hard and respect those who work hard with us.  In the wake of Hurricane Katrina, we face, and 
our staff most certainly faces, an uncertain and challenging future. Those futures (and the futures of all victims of 
Katrina) are made even more daunting by otherwise-normal commercial practices that, in these circumstances, may 
compound the financial devastation - namely, charging interest and late fees on credit card debt.
 
Using our firm as a typical example reveals just how devastating the storm has been. Until today I could not locate all 
of my partners.  Obviously we cannot perform necessary banking functions. We cannot receive mail. We cannot communicate 
with or visit our office. We cannot find many clients.  We cannot collect fees or send bills. Consequently, there will 
be a significant delay in revenue collection and, as an obvious by-product, a very real threat to our ability to pay or 
even maintain all employees. 
Yesterday I made calls to ask for some delay on behalf of our employees, but I was turned down flat.  Despite the 
circumstances, credit card companies insisted upon payment and, on at least two separate occasions, confirmed that 
accounts will continue to accrue interest and that they will charge fees for late payment. In the face of this 
overwhelming tragedy, which has left over one million people with uncertain futures, such a position is scandalous. 
To avoid this additional insult, I propose that credit card companies be required to honor, at a minimum, a 90 day 
moratorium on interest charges and late fees on personal credit cards issued in affected area codes. President Bush has 
asked all American citizens to contribute to the recovery effort; surely he means corporate citizens as well. As a 
business owner, I know the importance of the bottom line. But losing or deferring a small portion of a company's 
overall profit is a small price to pay to enable those who haven't already drowned to try to stay just a little bit 
above still rising waters. 
***Relatedly, Elizabeth Warren reports that Congress is calling an emergency session for next Tuesday to do something 
about the aftermath of Katrina. Representatives Conyers, Jackson Lee and Nadler have an idea: let's take another look 
at the bankruptcy legislation. It seems that in the haste to adopt the credit industry version of the bill, some 
amendments to cut a little break for the victims of natural disasters were defeated. Now everyone is scurrying to 
re-read the those amendments to see just how hard this new bankruptcy law will fall on families and small businesses 
thrown into financial chaos in the wake of Katrina.

Here's is the URL:


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