Consumer Debt Relief, Harmonization, and Human Rights

As numerous countries in Europe have adopted widely divergent consumer insolvency laws, the topic of harmonization has been on the near horizon for some time.  While the EU Commission seems to have considered and abandoned any effort at harmonization in this area, a particularly intriguing body has engaged the issue recently:  the Council of Europe.  The dizzying array of acronyms, commissions, and councils in Europe often conceals the significance of the generically named bodies involved.  The Council of Europe is the body charged with implementing the European Convention on Human Rights, to which 46 European states are signatories (far more than the 25 member states of the EU).

Doesn’t this add an interesting twist!  The Justice Ministers of the 46 member states have identified consumer debt problems as a source of significant human rights concern.  They asked the Committee of Ministers (the decision-making body) of the Council of Europe to explore possibilities for harmonizing approaches to avoiding and dealing with such problems.  After reviewing a survey of current practice (drafted by one of my academic heroes, Johanna Niemi-Kiesiläinen), the relevant Group of Specialists issued its report in December 2006, and it looks like a draft recommendation should be ready for Council action in the very near future.

The product of this exploration has been and will be quite modest.  The Council’s “recommendations” are not binding on the member states, and the latest report describes very modest recommendations for harmonization at that (e.g., "payment plans should be reasonable both in length of duration and in the amounts payable").  Nonetheless, I’m fascinated that the human rights watchdog in Europe is pushing this issue forward.  Until recently, it never would have occurred to me to draw a strong connection between consumer debt and human rights, but without pushing it too far, this perspective is really intriguing.  Can we imagine what the result of the recent U.S. reform would have been had Congress viewed consumer bankruptcy reform in terms of human rights?  Incidentally, Europeans also view privacy in human rights terms, leading to far more protective consumer credit reporting rules.  The FCRA can’t hold a candle to the (perhaps overly) strict data protection laws of France and Germany.

When we talk about cultural differences explaining international variations in law, part of what we have in mind are such differences of perspective and mindset.  Part of European culture is the legacy of two world wars that placed human atrocity and suffering on their very doorstep, pushing human dignity front and center in a wide range of debates.  One wonders what U.S. policy discussion would look like today in such areas as consumer debt and privacy regulation if the wars had been fought in New York and California as opposed to Europe and the South Pacific.

Comments

[John Pottow]

This is indeed a fascinating development. Also remember that the Europeans (and others) sometimes attack poverty from a human rights perspective, which would be anathema to most U.S. policymakers. There's also some good literature on the origination of usury laws that I was reminded of by reading your post.