House Financial Services Chairman Barney Frank (D-Mass.) said that he wants to move legislation to crack down on questionable credit card practices by October, CongressDaily reported yesterday. Frank made the statement during a closed-door meeting between banking lobbyists and consumer groups arranged by Financial Services Financial Institutions Subcommittee Chairwoman Carolyn Maloney (D-N.Y.) Maloney held the forum in an attempt to determine if she can get a consensus between the two factions on a “gold standard” for cards that did not contain certain fees and rate policies that have come under criticism. Maloney said that she will release a set of principles by the end of the week and use them as a starting point for writing legislation that should be introduced before the end of summer. “We discussed a set of principles that could serve as a guide to both legislation and self-regulation by the industry,” Maloney said. “These principles recognize that the modern risk-based pricing credit card system requires a shared responsibility between credit card issuers and their customers.”

Bankruptcy filings in Wisconsin were up almost 50 percent in the first half of the year, fueled in part by homeowners unable to cover monthly payments when their adjustable-rate mortgages repriced upward, the Milwaukee Journal Sentinel reported on Saturday. Through June, 7,667 bankruptcy petitions were filed statewide, compared with 5,124 in the first six months of 2006, according to court records. Though the increase is big on a percentage basis, 2006 had the fewest bankruptcies in 12 years in the state. Even though the law has changed, the typical factors that lead to bankruptcy - divorce, job loss and medical crisis - remain the same, but people who were sold mortgages they ultimately couldn’t afford are being factored into the rising number of filings in the state. The jump in monthly mortgage payments, combined with other debts, appears to be more than some consumers can handle. “People didn’t realize what they got into until too late,” said Paul Swanson, a bankruptcy lawyer in Oshkosh. “Their payment’s going from $759 to $1,200, and they just give up.”

Bankruptcy Judge Peter J. Walsh extended the Aug. 2 deadline for Mortgage Lenders Network USA Inc’s unsecured creditors’ committee to assert claims against Residential Funding Co. LLC until Aug.31, Bankruptcy Law360 reported yesterday. The committee asked for an additional 60 days to file claims against RFC and challenge RFC’s alleged liens and claims, known as the “challenge deadline.” The unsecured creditors objected to a motion earlier this month filed by RFC requesting a protective order suspending discovery in an ongoing investigation of the relationship between Mortgage Lenders and an offshore affiliate, Emax Financial Group LLC. In the same objection, the creditors requested an extension of the challenge deadline, granting the committee and other parties additional time to file claims against RFC, Mortgage Lenders’ primary pre-petition warehouse lender.

House Financial Services Chairman Barney Frank (D-Mass.) said at a hearing yesterday that he would sponsor legislation to give the FTC sole authority to write rules providing consumers a right to access and correct mistakes on their credit reports, CongressDaily reported. Frank said that such a change is needed because the FTC and five different bank regulators have been unable to finalize regulations on a 2003 law that gave consumers access to their credit reports at no charge and allowed them to place a fraud alert on their file if they suspect they have been a victim of identity theft. While Frank said that he would give the FTC more authority on that issue, he did not give any signal he would allow it to have enforcement authority over national banks for unfair and deceptive practices in areas such as credit cards, overdraft fees, late fees and deposits. Consumer groups testified that the FTC should have such authority to police federally regulated banks under the Federal Trade Act because bank regulators such as the Office of the Comptroller of the Currency are too close to the industry. Banks are opposed to giving the FTC any enforcement authority. Frank said that he is more inclined to give the OCC and the FDIC the ability to write rules because the Federal Reserve has not spelled out what are unfair and deceptive trade practices that are prohibited under the Federal Trade Act.

Countrywide Financial, the nation’s largest mortgage lender, said yesterday that more borrowers with good credit are falling behind on their loans and that the housing market might not begin recovering until 2009 because of a decline in house prices that goes beyond anything experienced in decades, the New York Times reported today. Just a couple of months ago, some executives were predicting a relatively quick recovery and saying that most home loans would be fine with the exception of the subprime market. Countrywide said about 5.4 percent of the home equity loans to customers with good credit that it held an interest in were past due at the end of June, up from 2.2 percent at the end of June 2006. By comparison, more than a fifth of subprime loans were past due at the end of June, up from 13.4 percent a year ago.

Bankrupt Paper Company Marcal Paper Mills Inc. on Friday received two new objections to its disclosure statement, one filed by US Bank and one by American Capital Strategies Ltd. (ACS) and American Capital Equity I, LLC, Bankruptcy Law360 reported yesterday. Private equity firm ACS has a minority stake in Marcal, with 209,254 shares of common stock representing 8.11 percent of total equity, according to the objection. US Bank, in its capacity as indenture trustee, also objected to Marcal’s disclosure statement on Friday, arguing that much of the language in the disclosure statement that applied to the secured claims of series 1990 bondholders was inadequate. US Bank proposed several clarifications involving those bondholders. The indenture trustee also objected to Marcal’s proposed solicitation procedures, arguing that the timetable was too short to give all bondholders an opportunity to cast ballots.

The House Financial Services Committee will hold a hearing on Wednesday titled “Improving Federal Consumer Protection in Financial Services – Consumer and Industry Perspectives” on Wednesday, according to a committee press release. The Committee will hear from witnesses about how consumer protection at the federal level can be improved, and whether the current regulatory structure is adequate for handling unfair and deceptive financial practices. The hearing is a follow-up to the June 13 hearing on consumer protection with the federal financial regulators. The hearing will take place at 10 a.m. ET in 2128 Rayburn House Office Building. Witness list to be announced.

Almost two years after lawmakers amended the U.S. Bankruptcy Code to reduce filing rates, the Southeast continues to see elevated numbers of consumer bankruptcies, a phenomenon some experts attribute in part to local culture, Dow Jones newswire reported today. Bankruptcy numbers over the past few months appear to be slowing or leveling off in many regions. More than 73 percent of the nation’s federal court districts saw bankruptcy filings drop between May and June, according to Jupiter eSources, a company that tracks bankruptcy data. Bankruptcies continue to climb or remain elevated, though, in the three highest-filing states in the countryÑTennessee, Georgia and Alabama. Some experts say that BAPCPA may have little effect on filing rates in states with chronically high bankruptcy rates. Economic and social factors such as low-paying jobs and high divorce rates often lead to financial hardship, but local bankruptcy experts say the sheer frequency of filings may also be whittling down the social stigma of filing.

Portrait Corp. of America Inc. exited chapter 11 protection with the sale of its assets for $82.5 million, which will pave the way for it to complete the wind-down of its business, Bankruptcy Law360 reported yesterday. Pursuant to the plan and the confirmation order, administrative claim holders must file notice of their claims by Aug. 16. If they fail to do so, PCA will be discharged from any liability, the order stated. In addition, professional fee claims and holders of claims created by the rejection of an executory contract and unexpired lease under the plan without prejudice to the liquidating trustee’s rights to assert must be filed by the same date, the order said. Under the terms of the effective plan, Ocean Ridge Capital Advisors LLC will be the trustee during the wind-down of the company’s liquidation.

A Washington state public utility has agreed to pay Enron Corp. $18 million to settle a contract dispute stemming from the California energy crisis, opting to strike the deal instead of enduring arbitration that could force the utility to pay $180 million, Bankruptcy Law360 reported yesterday. The deal is still subject to approval by the U.S. Bankruptcy Court for the Southern District of New York and the Federal Energy Regulatory Commission. After the PUD pulled out of its contract with Enron, following a term that allowed it to terminate a deal if the credit ratings fell below a certain level, Enron claimed in bankruptcy court that it was owed $115 million—a sum that has grown to $180 million with interest.