Pro-life members of the House of Representatives joined forces with opponents of the bankruptcy bill to defeat the rule on H.R. 333 by a vote of 172-243. The surprising defeat on a procedural vote came on the last day of an abbreviated lame-duck session closing out the 107th Congress.

House leaders were reluctant to bring up the conference report, which had been stalled since July, because of a Senate amendment that singled out anti-abortion protesters for different treatment in bankruptcy. The so-called Schumer amendment (named for its Senate sponsor, Sen. Charles Schumer, D-N.Y.) provided that debts arising from violations of the Freedom of Access to Clinic Entrances Act (FACE) would be non-dischargeable.

House leaders miscalculated the strength of the opposition, fueled by pro-life groups, U.S. Catholic Bishops and social conservative activists. When combined with those House members who thought the bill was too harsh in its treatment of consumer debtors, the bill went down in defeat.

Seven hours after the vote, House leaders put together and passed another version of the bill—this one without the Schumer amendment—even though it was clear that the Senate would not consider this version. The outcome is a bitter defeat for the financial services community, which has been pushing for the bill since 1997. Industry lobbyists urged House leaders to press for the vote.

However, the Republican takeover of the the Senate in the Nov. 5 election provides another opportunity to revisit the bill in the 108th Congress. The shift in Senate control makes it far more likely that a new bill could emerge quickly during the 108th Congress next year. Sen. Orrin G. Hatch (R-Utah), a strong advocate for the bill, will now chair the Senate Judiciary Committee, replacing Sen. Patrick Leahy (D-Vt.). Leahy previously indicated that he was not inclined to restart the bankruptcy process again. While the legislative process must begin anew, any new bankruptcy bill would move very quickly through a new GOP-controlled Congress. Democratic-inspired amendments now in the bill (on items such as the homestead exemption, credit card disclosures and the abortion provision, among others) may not be included in a new version.

ABI will announce a series of teleseminars on the many anticipated changes in practice under the new law, as soon as a final outcome is clear.