Bankruptcy legislation making it tougher for heavily indebted Americans to wipe out their obligations won final congressional approval on Thursday and President George W. Bush said he looked forward to signing it into law.
Sought for years by banks and credit card companies that say people are abusing bankruptcy to escape repayment, the measure cleared the House of Representatives on a 302-126 vote. It passed the Senate last month by 74-25.
The bill now goes to the White House, where it is seen as part of the Republicans' legal reform agenda.
"I commend the House for acting in bipartisan fashion to curb abuses of the bankruptcy system," Bush said in a statement that called the changes in the bill "commonsense reforms."
"I look forward to signing the bill into law," he said.
Opponents say the bill is too harsh on ordinary Americans, arguing many of those filing for bankruptcy were driven into debt by unemployment, a medical crisis or divorce.
The measure contains an income test to determine if people should enter compulsory repayment plans, rather than have their assets liquidated to repay creditors.
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"This bill will help stop fraudulent, abusive, and opportunistic bankruptcy claims by closing various loopholes and incentives that have produced steadily cascading bankruptcy claims," said Wisconsin Republican Rep. James Sensenbrenner.
Personal bankruptcy filings have risen in recent years, but last year were down 3.8 percent to 1.6 million.
Critics also charge the bill ignores loan-shark style practices that entice people to borrow and then hit them with high interest and fees. They say it adds insult to injury by forcing those filing for bankruptcy to have credit counseling.
"This is the most special-interest-invested bill that I have ever dealt with in my career in Congress," said Rep. John Conyers, a Michigan Democrat first elected in 1964. "It massively tilts the playing field in favor of banks and credit card companies and against working people and their families."
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The AFL-CIO labor organization denounced the measure as "further proof that big business is steamrolling legislation through Congress."
Some parts of the bill affect corporate bankruptcies. It lets creditors close out their derivatives contracts with companies that have filed for bankruptcy, a provision aimed at reducing the risk of financial crises. Another provision tightens the rules for companies that are filing for bankruptcy and want to pay retention bonuses to executives.
TORTURED HISTORY
The core of the bill was written in 1997 but it has had a tortured history. The House passed versions of it eight times but it usually stalled in the Senate. Once when it did pass the Senate, former President Bill Clinton gave it a "pocket veto" by refusing to sign it after Congress went home.
The final way forward in the Senate was cleared last month when senators defeated an abortion-related amendment that had scuttled agreement on the measure in the previous Congress.
While it was largely a Republican project, the measure ultimately won considerable Democratic support. Seventy-three House Democrats joined 229 Republicans in voting for it.
In their haste to get the bill to Bush, House Republican leaders refused to consider amendments on the floor and voted down a Democratic attempt to return the bill to committee with instructions to exempt veterans from the measure's means test.
Some experts predict a rush to file for bankruptcy before the law takes effect six months after Bush signs it.