The North Carolina Bankruptcy Information Blog

Harvard law professor Elizabeth Warren met with David Axelrod, one of President Obama’s senior advisors, Wednesday night. On Thursday, President Obama announced sweeping new restrictions on the largest banks: they will no longer be able to operate hedge funds and new policies will restrict how large a bank can be. Obama also called for an end to the obscene profits and enormous bonuses at firms that claim any additional fees or taxes would have to be passed on to consumers.

Is there a connection between Warren’s meeting and Obama’s proposed reforms? And, more importantly, could an increased role for Warren in Obama’s administration be good news for people who would like to see better bankruptcy laws and more bank and lender accountability?…

Several months ago, in the heart of the recession with no recognizable signs of clotting in America’s collective financial blood loss, the government passed on a bill to allow millions of shaky mortgages to be subject to struggling homeowners’ bankruptcy petitions. Known as the Cramdown Bill, it would have given bankruptcy judges the right to modify, or “cramdown” mortgage terms, such as interest rates and principal balances, as part of the approval of a personal bankruptcy plan. The banking lobby launched a heavy campaign to defeat the cramdown provision, leaving families with limited options to save their homes.

Said Dick Durbin (D-Ill), “After two years of efforts that rely on banks to volunteer to rework mortgages, it is time to admit that the programs that have been put in place thus far to ease the crisis are clearly not working.…