Making News

US Supreme Court’s Ruling Favors Debt Collectors In Fair Debt Collection Practices Act Decision

Jan 06, 2020 - 2:01pm

JDSupra | December 23rd, 2019 In a recent decision, the US Supreme Court ruled that a consumer claimant under the federal Fair Debt Collection Practices Act (“FDCPA”) has one year from the alleged violation to file suit. The one-year statute of limitations begins at the time of the alleged wrongful act, even if the consumer is unaware of the purported violation. The court did, however leave the door open for a consumer to bring suit beyond one year if the debt collector fraudulently conceals its actions.

Rising credit card debt boosts bank profits

Jan 06, 2020 - 2:01pm

Fox Business | December 27th, 2019 Consumers are carrying near-record levels of credit card debt and the banking industry is a big beneficiary, according to the Washington Post. Card companies have increased interest rates and fees as credit balances rise. Industry experts say that will cost consumers who carry balances and don't pay off their bills every month. Credit card sales were up 10 percent at JPMorgan Chase and 5 percent at Citigroup in the third quarter.

Information on the Economic Status of Millennial Households Compared to Previous Generations

Dec 30, 2019 - 3:12pm

GAO | December 18th, 2019 Recent research indicates that, across three key measures, economic mobility in the United States is limited. Specifically, the Millennial generation (those born between 1982 and 2000) might not have the same opportunity as previous generations had to fare better economically than their parents. According to studies GAO reviewed, the share of people making more money than their parents at the same age (absolute mobility) has declined over the last 40 years, and the chances of moving up the income distribution (relative mobility) have been flat over time. Using a third measure of economic mobility (intergenerational income elasticity), researchers have found that income in adulthood is linked to how much a person's parents made, and that between one-third and two-thirds of economic status is passed down from parents to children. This is especially true of the lowest and highest income groups. Researchers also identified race and geography as key determinants of an individual's economic mobility.

Fed Says Banks Cite Regulations Among Reasons for Repo Spike

Dec 30, 2019 - 3:12pm

Bloomberg | December 19th, 2019 Many of the largest U.S. banks pointed to regulatory restrictions on their balance sheets and reduced risk appetite to explain why they stood on the sidelines during the mid-September spike in overnight funding rates instead of profiting from the excess demand for short-term lending, according to a Federal Reserve survey. Three-fourths of primary dealers responding to the Fed’s December Senior Credit Officer Opinion Survey reported “basically no change” in secured lending from Sept. 16-18, compared with the first week in September, despite a higher lending rate. Fed officials had expected banks with excess liquidity to jump in with extra lending.

At SCOTUS, business groups and lawmakers cast doubt on DOJ’s proposed easy fix for CFPB

Dec 23, 2019 - 9:12am

Reuters | December 17th, 2019 (Reuters) - I read the 23 amicus briefs filed Friday and Monday at the U.S. Supreme Court in Seila Law v. Consumer Financial Protection Bureau so you don’t have to. A bevy of business groups, including trade associations for consumer financial institutions regulated by the CFPB; Republicans in both the U.S. House and Senate; defendants in CFPB proceedings and conservative and libertarian groups told the Supreme Court that they agree with Seila Law that the CFPB’s structure is unconstitutional because the bureau’s lone director cannot be removed by the president except for good cause.

More Americans worry they can't pay off their holiday credit card debt

Dec 23, 2019 - 9:12am

Yahoo Finance | December 17th, 2019 The holiday shopping “ho ho ho” is about to become oh no no for millions of American consumers. The latest CompareCards Credit Card Confidence Index shows only 40% of cardholders feel “very confident” about paying off their credit cards in full. That’s down from 46% who felt very confident at this time last year. “I think that a lot of that is simple pressure to spend,” CompareCards chief industry analyst Matt Schulz told Yahoo Finance’s On the Move. “A lot of it is simply not wanting to let your kids, or your friends, your family down. So people keep spending.”

Fed boosts plan to inject billions into the US economy

Dec 16, 2019 - 3:12pm

Markets Insider | December 13th, 2019 The Federal Reserve Bank of New York bolstered its scheduled repo operations Thursday, planning larger capital injections through the end of the year to avoid another lending rate spike. The Fed boosted its overnight repurchase agreements set between December 31 and January 2 to a $150 billion cap from the previous $120 billion level, according to a Thursday release. The figure serves as a limit for banks seeking additional liquidity, and it's possible firms' demand won't meet the increased supply.

U.S. Consumers Expected to Maintain Strong Credit Activity in 2020

Dec 16, 2019 - 3:12pm

Transunion | December 12th, 2019 The U.S. consumer is expected to perform well once more in 2020, marking one of the longest periods of sustained positive credit activity in recent decades. TransUnion’s (NYSE: TRU) 2020 consumer credit forecast projects serious delinquency rates will either decline or remain about the same for auto loans, credit cards, mortgages and unsecured personal loans.

CFPB challenger to SCOTUS: Let Congress fix bureau’s constitutional flaw

Dec 16, 2019 - 3:12pm

Reuters | December 11th, 2019 Both the Justice Department and a debt relief law firm challenging the constitutionality of the Consumer Financial Protection Bureau argued in briefs this week that the U.S. Supreme Court need not kill off the bureau because of criticisms that its unique structure violates separation of powers doctrine. But the two sides offered the justices quite different proposed remedies for the alleged constitutional flaw.

IRS Privatization Program for Collecting Tax Debts Triples Profits in 2019

Dec 16, 2019 - 3:12pm

Government Executive | December 10th, 2019 The federal government’s program outsourcing the collection of longstanding tax debt to private companies tripled the profits it brought to the Internal Revenue Service this year, though it still fell short of the revenues lawmakers had anticipated. The private debt collection program brought in $212 million from taxpayers in fiscal 2019, up from $82 million the previous year. The four companies participating in the program took commissions of $39 million, leaving—after other administrative costs—$148 million in net revenue to the IRS.

Oil and Gas Bankruptcies Grow as Investors Lose Appetite for Shale

Aug 30, 2019 - 4:08pm

American Bankruptcy Institute | August 30th, 2019 Bankruptcies are rising in the U.S. oil patch as Wall Street’s disaffection with shale companies reverberates through the industry, the Wall Street Journal reported. Twenty-six U.S. oil-and-gas producers including Sanchez Energy Corp. and Halcón Resources Corp. have filed for bankruptcy this year, according to an August report by the law firm Haynes & Boone LLP. That nearly matches the 28 producer bankruptcies in all of 2018, and the number is expected to rise as companies face mounting debt maturities. Energy companies with junk-rated bonds were defaulting at a rate of 5.7 percent as of August, according to Fitch Ratings, the highest level since 2017. The metric is considered a key indicator of the industry’s financial stress. The pressures are due to companies struggling to service debt and secure new funding, as investors question the shale business model. Many drillers financed production growth by becoming deeply indebted, betting that higher oil prices would sustain them. But investor interest has faded after years of meager returns, and some companies are struggling to meet their obligations as oil prices hover below $60 a barrel. Private companies and smaller public drillers have been hit hardest so far. Those producers collectively generate a large portion of U.S. oil, according to consulting firm RS Energy Group, and their distress reflects issues affecting all U.S. shale.

Soaring Student Debt Opens Door to Relief Scams

Aug 27, 2019 - 4:08pm

American Bankruptcy Institute | August 27th, 2019 Student debt is soaring — it is now nearly $1.5 trillion — and defaults are at a record. That has been fertile ground for companies that promise to help stretched borrowers navigate the maze of federal programs that can reduce or forgive debts for those who qualify, such as public-service workers or people on low incomes, the Wall Street Journal reported. Some companies operate legally, although there is nothing they offer that borrowers can’t get themselves for free, regulators say. Other firms are outright scams, or make promises to borrowers that are illegal, regulators and consumer advocates warn. Financial Preparation Services of Irvine, Calif. boasts on its website three glowing testimonials for its debt-relief services for student loans. It quotes Anthony Zwichirowski of California, Dawn Robinson of New Hampshire and a smiling Dean Edelman of Virginia, who says using the company “was the smartest move I have made since graduating.” One or more of the three ostensibly happy borrowers also appears, with slight variations, on at least 25 other websites of purportedly different companies offering student-loan debt-relief in the last four years. Financial Preparation Services has submitted claims for federal relief based on fictitious information, according to a former employee. Sales teams within the company also switched regularly to using new corporate names and websites, the former employee said. The company is one of several about which federal regulators are demanding information, according to a bankruptcy court filing.

North America Leads First Post-Crisis Jump in Global Insolvencies

Aug 27, 2019 - 4:08pm

Wall Street Journal | August 27th, 2019 Corporate insolvencies are expected to rise globally for the first time in 10 years, with North America leading the trend, due to a more challenging economic environment and heightened uncertainty surrounding trade policy, according to a new research report, WSJ Pro Bankruptcy reported. The first annual upturn in corporate insolvencies in advanced markets since the global financial crisis in 2008 and 2009 comes as the worldwide economy slows down, business investment growth remains subdued and financing risks rise due to ongoing trade tensions, according to a report released yesterday by Dutch trade finance insurer Atradius NV. Business failures globally are expected to grow 2.8 percent this year and increase slightly again by 1.2 percent in 2020, Atradius said. The higher forecast for corporate insolvencies is primarily due to worse-than-expected insolvency developments in North America. Atradius has “a built-in warning system” that requires its insurance customers to report to the company late payments of more than 60 to 90 days from their buyers of services or commodities, said David Huey, president and regional director of U.S., Canada and Mexico for Atradius. The region is forecast to see the highest insolvency growth among all regions, with a 3.2 percent increase in 2019 and 1.7 percent in 2020 as economic momentum dwindles and companies increasingly face the costs of rising trade tensions, Atradius said in the report.

As U.S. watchdog retreats, mortgage firms reprise cozy marketing arrangements

Aug 22, 2019 - 4:08pm

Reuters | August 22nd, 2019 WASHINGTON (Reuters) - U.S. mortgage firms are getting back into joint marketing and advertising arrangements, reviving a controversial practice that was effectively banned in the aftermath of the 2007-2008 subprime mortgage crisis.

National Bankruptcy Services, LLC Exhibiting in Booth #811 at MBA’s National Mortgage Servicing Conference

Feb 22, 2019 - 9:02pm

National Bankruptcy Services, LLC will be exhibiting in booth #811 at the Mortgage Bankers Association National Mortgage Servicing Conference being held at the Hyatt Regency Orlando 2/25/19 through 2/28/19. Several of National Bankruptcy Services, LLC’s senior management, including Brad Cloud (CEO), will also be at the exhibit booth during the below listed time. Brad Cloud CEO National Bankruptcy Services, LLC At Booth #811 on Wednesday 2/27/19 from 11:00AM to 12:00PM

Trump to Sign Executive Order to Boost Retirement Savings - American Bankruptcy Institute

Aug 31, 2018 - 8:08pm

President Donald Trump will sign an executive order today aimed at boosting retirement savings, giving Americans more time to keep their money in tax-deferred accounts and allowing small businesses to band together to offer 401(k)s, Politico reported. The order will call on the Treasury Department to review its rules for mandatory withdrawals from 401(k) plans and individual retirement accounts. Generally, people must start withdrawing funds from these accounts when they turn 70-and-a-half. The Treasury rules have not been updated since 2002, said Daniel Kowalski, counselor to the Treasury secretary. The executive order will also call on the Labor Department to consider allowing small businesses to jointly offer 401(k) plans. Historically, the Department has prevented unrelated businesses such as barbershops and car dealerships from collaborating to offer so-called open multiple employer plans because of the potential for abuse. Open multiple employer plans, which have bipartisan support in Congress, would eliminate the need for businesses to have a common interest in order to pool their retirement assets into a single 401(k).

Fed Signals More Rate Hikes Coming Despite Trump’s Calls to Back Off - American Bankruptcy Institute

Aug 03, 2018 - 8:08pm

The Federal Reserve left its benchmark interest rate unchanged yesterday, keeping the rate in a range of 1.75 percent to 2 percent, but the central bank said the U.S. economy is “strong” and hinted that more rate hikes are coming soon, the Washington Post reported. President Trump has urged the Fed to keep rates low, but the central bank is an independent body, and Fed leaders have made it clear they intend to carry out their mandate to keep unemployment down and prices stable without political interference. Fed policymakers think the U.S. economy is on very good footing now and that the historically low rates that were put in place to aid the economy after the Great Recession are no longer necessary. “The labor market has continued to strengthen and…economic activity has been rising at a strong rate,” the Fed said in its statement yesterday, adding that it expects “further gradual increases” in interest rates.

Mortgage Applications Fall, as Refinancing Hits 20-year Low - American Bankruptcy Institute

Jul 09, 2018 - 1:07pm

The Mortgage Bankers Association said that total mortgage application volume decreased 0.5 percent on a seasonally adjusted basis compared with the previous week, reported. Volume was 13.5 percent lower than the same week one year ago. Applications to refinance a home mortgage fell 2 percent for the week and were 28 percent lower than the same week one year ago, when interest rates were lower. The refinance share of mortgage activity decreased to 37.2 percent of total applications from 37.6 percent the previous week. More than half of all homeowners with a mortgage today have rates below 4 percent, according to CoreLogic. Home equity lines of credit are increasing as refinances decrease. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) decreased to 4.79 percent last week from 4.84 percent the previous week, with points decreasing to 0.41 from 0.42 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.

Mick Mulvaney Dismisses All Members of CFPB’s Advisory Board - American Bankruptcy Institute

Jun 07, 2018 - 1:06pm

Mick Mulvaney, acting director of the Consumer Financial Protection Bureau, dismissed the agency’s 25-member advisory board yesterday, days after some of its members criticized his leadership of the watchdog agency, the Washington Post reported. The CFPB said that it will revamp the Consumer Advisory Board (CAB) in the fall with all new members. The panel has traditionally played an influential role in advising the CFPB’s leadership on new regulations and policies. But some members, who include prominent consumer advocates, academics and industry executives, began to complain that Mulvaney was ignoring them and making unwise decisions about the agency’s future. On Monday, 11 CAB members held a news conference and criticized Mulvaney for, among other things, canceling legally required meetings with the group. Yesterday, group members were notified that they were being replaced — and that they could not reapply for spots on the new board.

Senate votes to kill consumer bureau auto-lending restrictions - Politico

Apr 25, 2018 - 3:04pm

The Senate on Wednesday moved to eliminate a 2013 consumer protection measure intended to combat discrimination in auto lending, marking an expansive new use of its power to kill federal regulations. The lawmakers voted 51-47 to gut the Consumer Financial Protection Bureau‘s guidance, which Republicans attacked as harmful to auto dealers and lenders. The House is expected to pass the measure soon, and President Donald Trump will likely sign it. The consequences of the vote will ripple beyond the confines of the CFPB, which is already on a deregulatory path under the leadership of Mick Mulvaney, Trump‘s White House budget chief. It was the first time the Senate has used its authority under the 1996 Congressional Review Act to strike down an action taken by an agency years ago, instead of just within the narrow window prescribed by the law. The move also marked a broadening of how Congress has generally used the Review Act to include regulatory guidance and not only formal agency rules that were recently issued. "It's important for Congress to reassert its role in policymaking from the executive branch," said Sen. Jerry Moran (R-Kan.), who introduced the bill that would undo the regulation.

House Votes to Exempt Some Banks from One of the Biggest Dodd-Frank Rules - American Bankruptcy Institute

Apr 16, 2018 - 3:04pm

The House voted on Friday to allow community banks to escape one of the biggest regulations imposed by the 2010 Dodd-Frank law, the Washington Examiner reported. Republicans joined with 78 Democrats to pass a bill sponsored by Rep. French Hill (R-Ark.) to revise the “Volcker Rule,” the regulation that restricts banks’ ability to speculate in the market with deposits insured by the federal government. The rule is meant to prevent banks from making risky bets that are effectively backstopped by taxpayers. The bill, which passed 300-104 just before lawmakers left for the weekend, is one of several bipartisan measures the House passed this week that would alter the Dodd-Frank law. Republican leaders in the House have said they hope for negotiations with the Senate to attach some House-passed bills to package of regulatory reforms that the upper chamber cleared last month with 17 Democratic votes. Senators so far have resisted including bills advanced in the House, and argue that their package of relief measures for community and regional banks is carefully negotiated and would be upset by involving House negotiators.

Medical Bankruptcies Are Not as Common as Previously Thought, Study Finds - Time Magazine

Mar 22, 2018 - 4:03pm

Medical bills can push patients over the financial cliff, but a new study says this may not happen as often as previous research suggests. Hospitalizations cause only about 4 percent of personal bankruptcies among non-elderly U.S. adults, according to an analysis published Wednesday in the New England Journal of Medicine. This contrasts with previous research by former Harvard professor and current U.S. Sen. Elizabeth Warren and others that pointed to medical reasons as the trigger for more than 60 percent of U.S. bankruptcies. In the new study, researchers tracked the credit reports of more than a half million adults under 65 in California who had a hospitalization between 2003 and 2007 that wasn’t tied to childbirth. They found that hospitalizations clearly forced some patients into bankruptcy in the years following their stay, said study co-author Matthew Notowidigdo, a Northwestern University economist. It just may not happen as frequently as the other research indicates. “What causes bankruptcies is still somewhat unknown, but it appears that medical expenses are responsible for a much smaller share of them than previously thought,” said co-author Raymond Kluender of the Massachusetts Institute of Technology. Researchers also estimated that hospitalizations were responsible for only about 6 percent of bankruptcies among uninsured patients. They noted that hospitalization rates are lower in that patient group compared to the overall non-elderly population. The new analysis included a broader range of people than earlier research, which focused on those who already had filed for bankruptcy protection. Such a narrow focus makes it “impossible to infer the role of medical expenses in causing bankruptcy” without information on those who had big medical bills and didn’t sink financially, the authors of Wednesday’s report noted. Their study also had limitations: It focused only on adult patients from one state who were hospitalized. Kluender said hospital stays often are the first event that triggers a “chain of struggles with medical expenses and medical debt.” The research looked at hospitalizations that occurred several years before the federal Affordable Care Act expanded insurance coverage to millions of Americans.

Fed Officials Say Economy Is Ready for Higher Rates - American Bankruptcy Institute

Feb 23, 2018 - 8:02pm

Robust economic growth has increased the confidence of Federal Reserve officials that the economy is ready for higher interest rates, according to an official account of the central bank’s most recent policymaking meeting in late January, the New York Times reported. The Fed did not raise its benchmark interest rate at the meeting on Jan. 30 and 31, but the account reinforced investor expectations that the Fed would raise rates at its next meeting in March. The account said that Fed officials have upgraded their economic outlooks since the beginning of the year and listed three main reasons: the strength of recent economic data, accommodative financial conditions and the expected impact of the $1.5 trillion tax cut that took effect in January. The Fed is seeking to raise rates gradually to maintain control of inflation without impeding an economic expansion that is nearing the end of its ninth year, one of the longest stretches of continuous economic growth in American history.

US banks suffer 20% jump in credit card losses - Financial Times

Jan 22, 2018 - 2:01pm

The big four US retail banks sustained a near 20 per cent jump in losses from credit cards in 2017, raising doubts about the ability of consumers to fuel economic expansion. “People are using their cards to get from pay cheque to pay cheque,” said Charles Peabody, managing director at the Washington-based investment group Compass Point. “There’s an underlying deterioration in the ability of the consumer to keep up with their debt service burden.” Recently disclosed results showed Citigroup, JPMorgan Chase, Bank of America and Wells Fargo took a combined $12.5bn hit from soured card loans last year, about $2bn more than a year ago. Banks have ramped up lending, wooing customers with air miles, cashback deals and other offers. The number of open credit card accounts in the US is forecast to reach 488m this year, according to Mercator Advisory Group, a rise of 108m from post-crisis lows in 2010. Yet borrower delinquencies are outpacing rising balances. While still less than half crisis-era levels, the consultancy forecasts soured credit card loans will reach almost 4.5 per cent of receivables this year, up from 2.92 per cent in 2015.

Bill Aims to Make Bankrupt Companies File for Protection Closer to Home - American Bankruptcy Institute

Jan 12, 2018 - 4:01pm

Senate lawmakers have introduced a bill that would force struggling companies to file for bankruptcy protection in a courtroom close to their headquarters, closing a controversial loophole that has enabled the country’s biggest restructurings to unfold in New York and Delaware, WSJ Pro Bankruptcy reported. Sens. John Cornyn (R-Texas) and Elizabeth Warren (D-Mass.) said in a joint statement that the bill is meant to allow workers at bankrupt companies, small businesses, retirees and others to “participate in cases that will have tremendous impacts on their lives.” Cornyn said that the measure “will strengthen the integrity of the bankruptcy system and build public confidence.” Warren added that the bill would “prevent big companies from cherry-picking courts that they think will rule in their favor and to crack down on this corporate abuse of our nation’s bankruptcy laws.”

Banks See Spikes in Suspicious Activity After Disasters - American Bankruptcy Institute

Dec 28, 2017 - 2:12pm

Banks seeing a spike of suspicious activity in the months following natural disasters can use the information to better prepare for future crime-fighting efforts, according to an analysis of filings the banks made to the federal government by data-management firm Enigma, the Wall Street Journal reported. The firm, which last month began a series analyzing suspicious-activity reporting by banks to the U.S. Treasury Department, said yesterday in its latest analysis that it examined the linkage between financial crime and 20 natural disasters. It found the issues go beyond mere fraud: Banks are in the middle of preventing insurance exploitation, identity theft and cyber-related crimes following disasters.

Report: U.S. Retail Bankruptcies Hit 6-Year High in 2017 - American Bankruptcy Institute

Dec 26, 2017 - 2:12pm

Bankruptcies among U.S. retailers reached a six-year high in 2017 amid declining foot traffic and the rise of e-commerce giants like Amazon, reported. Some 50 retailers filed for bankruptcy this year, including one-time giants like Toys R Us, RadioShack and Payless. That’s the highest number of bankruptcies since 2011, when 59 companies filed for the protection, according to data from S&P Global. Mall-based stores and so-called “big-box” stores have been most affected by the retail crisis. Big-box stores like Macy’s and Sears accounted for 43 percent, or about 43 million square feet of shuttered U.S. retail space in 2017, Axios reported, citing data from real estate research firm CoStar. Of the 50 retail bankruptcies, some 21 occurred at major retailers. Other companies to file include Wet Seal, Hhgregg, Rue21, Gymboree, True Religion and Vitamin World.

Trump to Nominate Jelena McWilliams as FDIC Chief - American Bankruptcy Institute

Dec 01, 2017 - 3:12pm

President Donald Trump will nominate regional bank executive Jelena McWilliams to lead the Federal Deposit Insurance Corp., the White House said Thursday, the Wall Street Journal reported yesterday. Ms. McWilliams has worked as a lawyer at the Federal Reserve and on the Republican staff of the Senate Banking Committee. She is currently chief legal officer of Cincinnati-based Fifth Third Bancorp. The nomination moves Trump closer to rounding out a team that can carry out his promise to revisit financial regulations adopted under President Barack Obama. The FDIC is currently led by an Obama nominee, Martin Gruenberg, who has pushed for strict rules on large Wall Street banks and warned against deregulation in a Nov. 14 speech. Mr. Gruenberg’s term as chairman ended Nov. 29. The White House said Ms. McWilliams has political science and law degrees from the University of California at Berkeley, and practiced corporate and securities law before entering public service in 2007, serving three years at the Fed and then six years in the Senate. At the Senate banking panel, she worked for Sens. Richard Shelby (R-Ala.) and Mike Crapo (R-Idaho), both of whom are skeptical of the 2010 Dodd-Frank financial-overhaul law and the resulting rules implemented under the Obama administration.

Analysis: Credit Card Debt Rises Again - american bankruptcy institute

Oct 20, 2017 - 2:10pm

The four top American banks — Bank of America, JPMorgan Chase, Citigroup and Wells Fargo — together made more than $4 billion in pretax income from their credit card businesses from July through September, the New York Times reported today. The amount of debt owed by American consumers, which receded in the wake of the financial crisis, is again on the rise. Outstanding credit card debt — the total balances that customers roll from month to month — hit a record $1 trillion this year, according to the Federal Reserve. The number of Americans with at least one credit card has reached 171 million, the highest level in more than a decade, according to TransUnion, a credit-reporting company.

CFPB Deal Could Mean Relief from Wall Street's Worst Student Loans - American Bankruptcy Institute

Sep 21, 2017 - 2:09pm

Credit card lenders are seeing delinquencies creep up again after a brief respite in the spring, the Wall Street Journal reported. Capital One Financial, Synchrony Financial and Alliance Data Systems have all seen delinquencies rise as a percentage of total loans over the past several months, after they declined slightly earlier this year. All three focus on lending to less-creditworthy borrowers, with Synchrony and Alliance Data specializing in store-branded, private-label cards. At Capital One, loans over 30 days delinquent in its domestic credit card portfolio ticked up to 4 percent of total loans in August from 3.5 percent in April, monthly data from the company shows. Over the same period, this ratio rose to 4.5 percent from 4.1 percent at Synchrony, and to 5.3 percent from 4.7 percent at Alliance Data.

Outlook for Auto Delinquencies Improves - Automotive News

Sep 13, 2017 - 4:09pm

The 30-day delinquency rate for all loans and leases fell to 2.20 percent in the second quarter from 2.22 percent a year earlier. The 60-day delinquency rate crept up to 0.67 percent from 0.62 percent a year earlier. The 30-day delinquency rate for auto loans and leases has improved for the second consecutive quarter. And as prime-risk originations continue to rise and subprime originations continue to fall, 60-day delinquencies likely will follow suit, according to Experian's second-quarter State of the Automotive Finance Market report. Super-prime loan and lease originations made up 19.1 percent of the market in the second quarter, up from 17.9 percent a year earlier. Prime-risk loan and lease originations dominated with a 39.4 percent share, up from 39 percent a year earlier. There was also a shift in market share by lender type in the second quarter, with more share going to credit unions and less to banks. Banks' share, on the other hand, fell to 32.3 percent from 34.8 percent a year earlier. Some banks have decided to pull back from auto lending and subprime financing, Zabritski said. "They've kind of rebalanced what percentage of their overall portfolio will be focused on auto, which can cause reduction in their share and reduction in bank share overall," she said. Overall, the second quarter was consistent with recent quarters, she said. "That's actually a good thing. It has been consistent performance and consistent originations."

J.P. Morgan, Debt Collector Agree To $4.3 Million in Settlement - Reuters

Aug 23, 2017 - 2:08pm

JPMorgan Chase Bank and Dallas debt collector Real Time Resolutions have agreed to pay $4.3 million to resolve a proposed class action by homeowners alleging that the firms tried to collect mortgage debt that was not legally enforceable. The settlement will reimburse thousands of California homeowners who received allegedly deceptive collection letters from Chase and Real Time Resolutions and hundreds who paid on debt that they allegedly had no legal obligation to pay.

Banks are cutting back on lending to the riskiest borrowers - Business Insider

Aug 17, 2017 - 2:08pm

Banks are scaling back on lending to Americans with the lowest credit scores, according to a study from TransUnion. Lenders processed fewer new personal loans, auto loans, and credit cards for subprime borrowers year-on-year in Q2 for the first time since 2012. Lenders tightened their standards after the housing crisis a decade ago following several years of reckless lending to subprime borrowers. As the economy rebounded, they opened up access to the subprime part of the market. This new study shows that the trend is turning again. But now is not a comparable time period to the financial crisis, said Ezra Becker, the senior vice president of research and consulting at TransUnion. It would be alarming and a sign of another credit downturn if lenders pulled back on their underwriting and delinquencies still continued rising, Becker said. "Delinquency levels are still far below historical norms," he told Business Insider.

U.S. Credit Card Debt Surpasses Record Set at Brink of Crisis - American Bankruptcy Institute

Aug 10, 2017 - 6:08pm

U.S. consumer credit card debt just passed an ominous milestone, beating a record set just before the global financial system almost collapsed in 2008, Bloomberg News reported. Outstanding card loans reached $1.02 trillion in June, data from the Federal Reserve show, as lenders including Citigroup Inc. and JPMorgan Chase & Co. compete to sign up cardholders who may carry balances — a relatively lucrative business in a prolonged period of low interest rates. Investors have been skittish over the potential for defaults to rise ever since card balances eclipsed $1 trillion in February. Credit card issuers Capital One Financial Corp., Synchrony Financial and Discover Financial Services said write-off rates ticked up in the second quarter from the previous three months.

The CFPB Is Losing a Trial Court Ally in the US Justice Department - National Law Journal

Aug 09, 2017 - 6:08pm

U.S. Justice Department lawyer Kent Kawakami was once the Consumer Financial Protection Bureau’s point man on the ground in Los Angeles, the National Law Journal reported today. An assistant U.S. attorney in the Central District of California, Kawakami would vouch for CFPB attorneys looking to jump into the federal courts there. Ever since the bureau’s first lawsuit in Los Angeles in 2012 — accusing a law firm of scamming struggling homeowners — his name has been a fixture on the roster of attorneys assigned to CFPB enforcement cases in the region. However, Kawakami withdrew from each of the four open CFPB enforcement cases between June and July in which he was designated as the local counsel. When the bureau recently brought a case to force a law firm to comply with a subpoena, it did so without Kawakami. Instead, an attorney in the CFPB’s San Francisco office helped a Washington-based colleague make an appearance. Kawakami is not the only assistant U.S. attorney who’s dropped off a CFPB case recently. In June, Mitzi Dease Paige, a prosecutor with the U.S. Attorney’s Office for the Southern District of Mississippi, withdrew from the CFPB’s case against All American Check Cashing Inc. The move away from CFPB cases comes months after the Justice Department, under U.S. Attorney General Jeff Sessions, said that it would no longer defend the lawfulness of the CFPB’s independent, single-director design. That issue is under review in a Washington appeals court, where Main Justice took a position against the CFPB — an Obama-era agency long assailed by Republican leaders in Congress and attacked by companies in court.

House votes to kill new bank arbitration rule in blow to federal consumer agency - Los Angeles Times

Jul 28, 2017 - 6:07pm

A new federal regulation that would make it easier for Americans to bring class-action lawsuits against banks and other financial institutions might be scrapped before it ever takes effect. Republican lawmakers had vowed to kill the rule, released by the Consumer Financial Protection Bureau just two weeks ago, and took the first step toward doing so Tuesday with a vote in the House of Representatives. The bureau, created by the Dodd-Frank Wall Street Reform Act in the wake of the financial crisis, is deeply unpopular with many Republicans, who deride it as an overreaching and unaccountable agency. Democrats largely support the bureau and its embattled director, Richard Cordray, calling it an effective enforcer of rules aimed at protecting consumers. The new rule would ban a common feature of contracts that consumers sign when they open bank accounts or use other financial products and services. Those contracts often include an arbitration clause — an agreement that customers will settle issues with the institution in private arbitration rather than in court.

Analysis: Mounting Student Loan Debt Mobilizing Bankruptcy Courts - Bloomberg BNA

Jul 24, 2017 - 1:07pm

Wiping out student loan debt in bankruptcy is so difficult it’s rarely an option for distressed borrowers. But there are indications that bankruptcy courts are starting to play a bigger role in addressing what is widely considered a financial crisis and a drag on the U.S. economy. While not aiming to discharge debt, about two dozen bankruptcy jurisdictions allow debtors to participate in programs that cap repayments based on income. And attorneys are having anecdotal success in negotiating with the government to get more debtors into these repayment plans even when they are in bankruptcy. Although borrowers in these types of plans may have lower default rates, according to one consumer agency, they, too, come with caveats in bankruptcy. Some debtors, in the end, may not be that much better off as interest on their loan piles up.

Fannie Mae and Freddie Mac Would Be Privatized Under Proposed House Budget - American Bankruptcy Institute

Jul 20, 2017 - 1:07pm

House Republicans want to privatize Fannie Mae and Freddie Mac as part of their 2018 budget proposal, reported yesterday. GOP members of the House of Representatives on Tuesday unveiled their 2018 budget. Dubbed "Building a Better America" and authored by Budget Chairman Diane Black (R-Tenn.), the plan calls for more than $200 billion in cuts to mandatory spending programs and sets the path for tax reform. It also calls for the privatization of mortgage giants Fannie Mae and Freddie Mac and assumes provisions of the House bill that would repeal Dodd-Frank. "The Treasury has already provided $187 billion in bailouts to Fannie and Freddie, and taxpayers remain exposed to $5 trillion in Fannie Mae and Freddie Mac's outstanding commitments, as long as the entities remain in conservatorship," the plan reads. "Our budget recommends putting an end to corporate subsidies and taxpayer bailouts in housing finance."

Consumer Delinquencies Up in First Quarter - Washington Examiner

Jul 07, 2017 - 6:07pm

Delinquencies in both open- and closed-end loans rose in the first quarter of 2017, according to the ABA Consumer Credit Delinquency Bulletin released today. The rise in closed-end delinquencies was driven by an uptick in late payments on auto loans, the report noted. The composite ratio, which tracks delinquencies in the closed-end installment loan categories, rose 5 basis points to 1.56 percent of all accounts, but remained well below the 15-year average of 2.17 percent. Delinquencies in indirect auto loans rose 8 basis points to 1.83 percent of all accounts, while direct auto lending delinquencies increased by 9 points to 1.03 percent of all accounts. Both remained well beneath 15-year averages, however. In the home-related category lines tracked, home equity line of credit delinquencies and home equity loan delinquencies rose to 1.11 percent and 2.59 percent, respectively. Property improvement loan delinquencies held steady at 0.98 percent of all accounts. Meanwhile, bank card delinquencies rose 5 basis points to 2.74 percent of all accounts.

Banks Push to Restructure Financial Regulator in Must-Pass Spending Bills - American Bankruptcy Institute

Jun 23, 2017 - 6:06pm

Banking groups are pushing for a major change to the leadership of the Consumer Financial Protection Bureau, and want it attached to must-pass government funding legislation, the Washington Examiner reported today. A wide range of financial industry trade groups wrote to congressional appropriators yesterday and asked them to use government funding bills to change the agency to a five-member bipartisan commission. The CFPB is currently headed by a single director, former President Barack Obama appointee Richard Cordray. Banks regulated by the bureau have chafed at Cordray's power to supervise them and write rules unilaterally. Republicans have argued that the setup of the bureau, created by the 2010 Dodd-Frank law, is unconstitutional. A federal court ruled in October the single-director structure does run afoul of the separation of powers in government, but that ruling is under appeal.

Trump Administration to Call for Curbs on Consumer-Finance Regulator - Wall Street Journal

Jun 12, 2017 - 6:06pm

The Trump administration will recommend limits on the U.S. consumer-finance regulator and a reassessment of a broad range of banking rules in a report to be released as early as today, the Wall Street Journal reported. The report from the Treasury Department, drafted in response to a February executive order from President Donald Trump, is less sweeping than financial legislation approved by the House of Representatives last week, these people said. That suggests the administration is taking a more pragmatic path than some Republicans who want to throw out Obama-era financial rules wholesale, although administration officials are still seeking to loosen regulatory restrictions on banks in significant ways. The report is around 150 pages and makes recommendations on policy goals, without laying out a specific process for achieving them. It is harshly critical of the Consumer Financial Protection Bureau and recommends that the bureau be stripped of its authority to examine financial institutions. By law, the bureau has the authority to enforce consumer laws as well as to examine individual firms on a continuing basis.

House Passes Bill Rolling Back Wall Street Rules - Wall Street Journal

Jun 09, 2017 - 7:06pm

The House voted (233-186) today for passage of the Financial CHOICE Act, an opening Republican bid to encourage economic growth by loosening regulation of the financial sector, the Wall Street Journal reported. The bill, authored by House Financial Services Committee Chair Jeb Hensarling (R-Texas), would unwind major parts of Dodd-Frank by relieving healthy banks of some regulatory requirements and forcing failing firms through bankruptcy rather than a liquidation process spearheaded by the regulators. It would subject new financial rules to cost-benefit analyses, boost penalties for financial wrongdoers, and repeal the Volcker rule restricting banks from speculative trading. Supporters of the plan say scrapping what they view as onerous regulatory requirements will ultimately help smaller businesses, allowing them to grow and create jobs. The bill is expected to face stiff resistance in the Senate, but aspects of the Financial CHOICE Act could be approved by Congress in smaller pieces or be implemented by the Trump administration.

In Unanimous Decision, Supreme Court Faults Major SEC Enforcement Rule - American Bankruptcy institute

Jun 06, 2017 - 7:06pm

The Supreme Court ruled unanimously yesterday that U.S. Securities and Exchange Commission enforcement actions requiring companies to return illegally obtained profits must conform to a five-year federal statute of limitations, reported. The decision in the case, Kokesh v. SEC, further restricts the securities regulator’s ability to require the forfeiture of funds, known as disgorgement. As part of the decision, which Justice Sonia Sotomayor authored, the court rejected a government argument that the disgorgement requirements shouldn’t be ordered because they are a remedial, and not punitive, measure. “This limitations period applies here if SEC disgorgement qualifies as either a fine, penalty, or forfeiture,” Sotomayor wrote. “We hold that SEC disgorgement constitutes a penalty.” Despite being limited in scope to the statute of limitations issue, SEC experts said that the decision could have long-term consequences for SEC disgorgement actions because of the court’s ruling that disgorgement is a penalty instead of a remedy.

Trump Proposes to Eliminate CFPB Budget, Give Congress Choice to Fund - InsideARM

May 24, 2017 - 1:05pm

The White House released its 2018 budget proposal to Congress this week. Buried (the second to last item) in a 171-page Major Savings and Reforms supplement is one half-page that addresses the CFPB. The section is called, Restructure the Consumer Financial Protection Bureau. Here's what it says: “The Budget proposes to restructure the Consumer Financial Protection Bureau (CFPB), limit the Agency's mandatory funding in 2018, and provide discretionary appropriations to fund the Agency beginning in 2019.” The justification is: “Restructuring the CFPB to refocus its efforts on enforcing enacted consumer protection laws is a necessary first step to scale back harmful regulatory impositions and prevent future regulatory hurdles that stunt economic growth and ultimately hurt the consumers that CFPB was originally created to protect. Furthermore, subjecting the reformed Agency to the appropriations process would provide the oversight necessary to impose financial discipline and prevent future overreach of the Agency into consumer advocacy and activism.”

U.S. Trustees Send Congress Report on Bankruptcy Crime Referrals - American Bankruptcy Institute

May 22, 2017 - 1:05pm

During the year, the U.S. Trustees made 2,158 criminal referrals. Despite the declines in bankruptcy filings in recent years, this was the most referrals made in a year in the 11 years that the EOUST has been reporting this information. The five most common allegations contained in the FY 2016 criminal referrals involved tax fraud (47.8 percent), false oath or statement (24.9 percent), concealment of assets (21.5 percent), bankruptcy fraud scheme (19.7 percent) and identity theft or use of false/multiple Social Security numbers (16.1 percent).

Farms Exceeding Chapter 12 Bankruptcy Debt Limits - American Bankruptcy Institute

May 08, 2017 - 3:05pm

While farming has changed in many ways since the 1980s, many aspects of agricultural bankruptcy are similar today, although some are now questioning whether the provisions of chapter 12 have kept pace with the growth of modern agriculture, the (Iowa) Globe Gazette reported Friday. Joseph Peiffer, a bankruptcy attorney in Iowa, said more than half of the farmers that have been coming into his office over the past two years have not qualified for chapter 12 because they had aggregate debts in excess of the current inflation-adjusted limit of $4,153,150. The debt limit for chapter 12 became tied to inflation in 2005. Before that, the limit was $1.5 million. “The debt of family farmers has increased far faster than the rate of inflation,” Peiffer said. “That’s why the debt limit, I believe, is too small.” He added that nearly half of his clients who do not qualify for the current debt limit would still not qualify with a $10 million limit.

Bankruptcy ‘Safe Harbor’ Protection to Get Supreme Court Review - American Bankruptcy Institute

May 05, 2017 - 12:05pm

The U.S. Supreme Court has agreed to hear a case that could make it easier for creditors to claw back cash that was paid out by a company before it went bankrupt, Bloomberg reported yesterday. Bankruptcy law offers a “safe harbor” to financial institutions that perform securities transactions. The provision was intended to protect trades from creditor claims, to promote stability in financial markets in the face of complicated corporate reorganizations. The justices are being asked to consider whether the shield should apply when a financial institution merely acted as a conduit for a transaction. FTI Consulting Inc., the trustee of Valley View Downs LP, contends that creditors are entitled to recover money paid for shares in rival Bedford Downs in 2007. Merit Management Group received $16.5 million in the transaction, which was carried out through Citizens Bank of Pennsylvania and Credit Suisse. The trustee sued Merit, saying that Valley View should get the money back because the company did not get equivalent value in exchange and was insolvent at the time of the deal. A district judge, invoking safe harbor, ruled that Merit could keep the money, but an appeals court reversed, saying the financial institutions involved in the trade were just conduits for the deal. Two federal appeals courts have reached the same conclusion, while five have gone the other way. The case is Merit Management Group v. FTI Consulting Inc., 16-784.

U.S. Bank fined $15 million for bankruptcy filing violations - Housing Wire

Apr 28, 2017 - 6:04pm

The Office of the Comptroller of the Currency announced Tuesday that it is ordering U.S. Bank National Association to pay a civil penalty of $15 million for what it calls “bankruptcy filing violations” that occurred between 2009 and 2014.  According to the OCC, an investigation found that between 2009 and 2014, U.S. Bank “engaged in filing practices in bankruptcy courts with respect to proofs of claim, payment change notices, and post-petition fees among others that did not comply with bankruptcy rules and constituted unsafe or unsound banking practices.”  According to the OCC, U.S. Bank committed the violations while it was under the terms of an April 2011 mortgage servicing-related consent order, which was subsequently terminated in February 2016.  And because of those actions, which the bank neither admits nor denies, the OCC is fining U.S. Bank $15 million. According to the OCC, that money will be paid to the Department of the Treasury.

Banking Fails to Meet Needs of Most Valuable Consumer Segment - American Bankruptcy Institute

Apr 13, 2017 - 2:04pm

The 50+ generation of consumers is the most financial challenged in history. Numbering more than 110 million in America alone, they are confronting a future of complex options and less financial confidence than any previous generation. With most either entering retirement, or already in a post-employment phase, decisions this generation makes today will impact not only their life, but the financial lives of their children who may be forced to support them.  Although the 50+ segment represents only 35% of the entire U.S. population, they control more than half of the nation’s investable assets. The people in this generation are heavy users of almost all financial services, holding balances in their accounts that are coveted by banks, credit unions, insurers, financial planners and wealth managers. They are also the fastest growing segment of digital product users, becoming comfortable with the online and mobile solutions that other generations already depend on.  Most importantly, the 50+ generation is a huge segment with significant needs that are currently unfilled. And with future generations (including Millennials), not having faced these challenges to date, but directly impacted by the outcome of their parent’s financial decisions, meeting the needs of the 50+ consumer has the potential of impacting the banking loyalty of their children.

Cohn Backs Wall Street Split of Lending, Investment Banks - American Bankruptcy Institute

Apr 10, 2017 - 3:04pm

In a private meeting with lawmakers, White House economic adviser Gary Cohn said he supports a policy that could radically reshape Wall Street’s biggest firms by separating their consumer-lending businesses from their investment banks, Bloomberg News reported yesterday. Cohn, the ex-Goldman Sachs Group Inc. executive who is now advising President Donald Trump, said that he generally favors banking going back to how it was when firms like Goldman focused on trading and underwriting securities, and companies such as Citigroup Inc. primarily issued loans. The remarks surprised some senators and congressional aides who attended yesterday’s meeting, as they didn’t expect a former top Wall Street executive to speak favorably of proposals that would force banks to dramatically rethink how they do business. Yet Cohn’s comments echo what Trump and Republican lawmakers have previously said about wanting to bring back the Glass-Steagall Act, the Depression-era law that kept bricks-and-mortar lending separate from investment banking for more than six decades.

House Votes to Create New Bankruptcy Rules for Banks - American Bankruptcy Institute

Apr 06, 2017 - 3:04pm

The House of Representatives voted yesterday to add a new section to the bankruptcy code just for banks, a measure meant to allow banks to fail without needing taxpayer bailouts or setting off a crisis, the Washington Examiner reported yesterday. The lower chamber passed the Financial Institution Bankruptcy Act of 2017 on a voice vote, a week after the bill cleared the Judiciary Committee also on a voice vote. Speaking on the House floor Wednesday, committee chairman Bob Goodlatte of Virginia said that the legislation "will better equip our bankruptcy laws to resolve failing firms, while also encouraging greater private counter-party diligence in order to reduce the likelihood of another financial crisis." The bill would set out a specific set of rules to help authorities sort out which creditors are owed in the event of a bank bankruptcy, in an effort to reduce the panic and uncertainty that can accompany these events. The House has passed the legislation in previous Congresses, but the Senate has not acted on it.

Analysis: New Firms Catching Up to Banks in Foreclosure Rankings - American Bankruptcy Institute

Mar 31, 2017 - 1:03pm

The number of home foreclosures is down sharply from the depths of the financial crisis, even as many of the mortgage firms involved remain the same, including Fannie Mae, Wells Fargo, Bank of America and JPMorgan Chase. But the latest foreclosure rankings also include a number of firms that barely registered or did not exist when the crisis began a decade ago, the New York Times reported today. These new entrants include firms affiliated with the private equity giant Lone Star Funds, the mortgage lender PennyMac Loan Services, the investment bank Goldman Sachs and the mortgage firm Carrington Mortgage Services. This changing of the guard in the foreclosure rankings, based on data compiled by RealtyTrac, reflects the new reality that most foreclosures today are not coming from mortgages written during the post-crisis period, but from soured loans written before the crisis that are in the final stages of liquidation.

Sluggish Housing Recovery Took $300 Billion Toll on U.S. Economy, Data Show - American Bankruptcy Institute

Mar 27, 2017 - 1:03pm

The decline in homeownership rates to near 50-year lows is partly to blame for the U.S. economy’s sluggish recovery from the last recession, new data suggest, the Wall Street Journal reported today. If the home-building industry had returned to the long-term average level of construction, it would have added more than $300 billion to the economy last year, or a 1.8 percent boost to gross domestic product, according to a study expected to be released today by the Rosen Consulting Group, a real estate consultant. In 2016, total spending on housing declined to 15.6 percent of GDP, a broad measure of goods and services produced across the U.S., compared with a 60-year average of nearly 19 percent. The share of spending specifically linked to new-home construction and remodeling likewise declined to 3.6 percent of GDP, just over half its pre-recession peak in 2005.

Filing for Bankruptcy More Expensive Under Trump Budget - American Bankruptcy Institute

Mar 25, 2017 - 3:03pm

Filing for bankruptcy would likely cost more under President Donald Trump's budget proposal, the Birmingham (Ala.) News reported on Saturday. Trump's "America First: A Budget Blueprint to Make America Great Again," includes a provision that would raise an additional $150 million in 2017 through higher filing fees. Currently, the fees generate about $138 million; Trump's budget aims to see that grow to $289 million by 2018. The change, according to the outline would "ensure that those that use the bankruptcy court system pay for its oversight." The increased fees would go to the Department of Justice's U.S. Trustee Program, which oversees the administration of bankruptcy filings. The budget outline doesn't specify which filing fees will increase.

Bankers, House Republicans Have Competing Visions for CFPB - American Bankruptcy Institute

Mar 21, 2017 - 3:03pm

House Republicans are considering legislation that would restructure the Consumer Financial Protection Bureau in a way that allows the president to fire the agency’s director at will. Banking groups, however, are mostly in favor of taking a different approach: forming a bipartisan commission to lead the CFPB, reported today. GOP lawmakers who are angling to roll back key aspects of Dodd-Frank have shifted their stance on the consumer agency, a longtime target of GOP efforts to overhaul the 2010 law. Legislation introduced in September by House Financial Services Committee Chairman Jeb Hensarling (R-Texas) would have changed the CFPB’s leadership from a single director to a bipartisan commission. But a revamped version of that bill, known as the Financial CHOICE Act, is expected to propose having a single director who the president can fire at will. “In the CHOICE Act, we want to have the director serve at the will of the president,” Rep. Blaine Luetkemeyer (R-Mo.), chairman of the Subcommittee on Financial Institutions and Consumer Credit, said earlier this month. However, several banking industry leaders are holding fast to the bipartisan commission plan. “We continue to believe that a commission style of governance for the CFPB would result in better regulation,” Francis Creighton, executive vice president of government affairs at Financial Services Roundtable, said last week.

Senators Introduce Bill to Improve Bankruptcy Court System - American Bankruptcy Institute

Mar 18, 2017 - 6:03pm

U.S. Senators Chris Coons (D-Del.), Debbie Stabenow (D-Mich.), Marco Rubio (R-Fla.), and Bill Nelson (D-Fla.) yesterday introduced “The Bankruptcy Judgeship Act of 2017,” according to a press release. This legislation would ensure that individuals and corporations have access to well-functioning bankruptcy courts even when temporary judgeships expire. “At a time when both individuals and corporations need to access the resources of bankruptcy courts, Congress must act to extend bankruptcy judgeships in judicial districts where they are most needed,” said Senator Coons. Rubio added that the legislation was a necessity. “Federal bankruptcy laws make it possible for individuals and businesses to reorganize their debts, but a significant impediment to a well-functioning system has been Congress’ failure to appropriately authorize judgeships as recommended by the nonpartisan Judicial Conference of the United States," said Senator Rubio.

California Bill Would Eliminate Tax Deduction on Second Home - American Bankruptcy Institute

Mar 17, 2017 - 6:03pm

The California state legislature is considering a bill to eliminate a tax deduction for owners of second homes and spending the newly collected revenue on affordable housing, the Palm Beach Desert Sun reported. The bill, A.B. 71, proposes the elimination of the state mortgage interest tax deduction — a policy that allows Californians to deduct any interest they pay on their mortgages from their taxes — for second homes. Assemblymember David Chiu (D-San Francisco), the bill’s sponsor, said that about 31,000 Californians claimed the tax deduction last year, and if collected, those taxes could have totaled $360 million for the state. A.B. 71 would require the state to collect those funds and deposit them into the Low-Income Housing Tax Credit program, a popular mechanism for funding the construction of affordable housing. The structure of the tax program allows developers to leverage federal and private funds, so the $300 million in state funds could allow total investment of more than $1 billion.

U.S. Household Net Worth Reaches Record $92.8 Trillion - American Bankruptcy Institute

Mar 10, 2017 - 1:03pm

U.S. household net worth climbed to a record $92.8 trillion in the fourth quarter of 2016, as the end-of-year surge in stocks and a steady climb in home prices added more than $2 trillion of wealth to household balance sheets, the Wall Street Journal reported today. The biggest contributor to the increase was the stock market, which added $728 billion to household balance sheets in the fourth quarter, according to the Federal Reserve’s quarterly financial accounts report. The stock market rallied by about 8 percent in the fourth quarter of 2016, following the election of President Donald Trump, with many investors anticipating tax cuts, regulatory relief and fiscal stimulus. The market has climbed an additional 6 percent so far this year, which isn’t captured in yesterday’s report. U.S. households lost nearly $13 trillion during the 2007-09 recession. Since the first quarter of 2009, however, wealth has soared by $38 trillion, driven by an eight-year rally in stocks and eventually by a robust recovery in home prices.

Trump’s Deregulatory Agenda Could Result in Windfall for Banking Industry - American Bankruptcy Institute

Mar 08, 2017 - 1:03pm

Changes in banking regulations could result in a big windfall for the industry, much of which would make its way into investors' pockets, according to a Goldman Sachs analysis, reported yesterday. In a best-case scenario, the Trump administration’s proposed regulatory cuts in the banking industry would result in as much as $218 billion in excess capital which "could either be returned to shareholders or reinvested in the business," Goldman said in a report for clients this week. That excess cash would result from likely reduced requirements for banks to retain buffers against emergencies. Reforms under the Dodd-Frank law in 2011 sought to make sure the industry doesn't suffer another crisis like the one that began 10 years ago and nearly capsized the global economy. The current level of excess capital is $131 billion. While the White House has yet to lay out specifics about what regulations will look like, Goldman believes they'll center around easing stress test requirements, rolling back the way banks have to count risk assets, and bringing capital requirements imposed by the U.S. Federal Reserve more in line with other organizations such as the international Financial Stability Board.

Mnuchin Zeal for Fannie-Freddie Overhaul Faces Test After Ruling - American Bankruptcy Institute

Feb 23, 2017 - 2:02pm

U.S. Treasury Secretary Steven Mnuchin’s seriousness about overhauling the nation’s $10 trillion mortgage market will soon be tested, Bloomberg News reported today. A federal appeals court on Tuesday dealt a major blow to hedge funds that own Fannie Mae and Freddie Mac shares, ruling that investors weren’t entitled to billions of dollars of profits. The decision clears an obstacle to addressing an issue that has vexed policy makers for almost a decade: What to do with the government-controlled companies that guarantee 43 percent of U.S. mortgages. Yet some housing industry groups and analysts say that they’re skeptical anything will happen quickly because Republican lawmakers have bigger priorities, such as repealing Obamacare and overhauling the tax code. And while most everyone agrees something must be done about Fannie and Freddie, there isn’t much consensus over how to proceed.

Chris Lundquist, CIO for NBS, Will Speak On PACT Technology At MBA’s National Mortgage Servicing Conference

Feb 10, 2017 - 8:02am

Chris Lundquist, Chief Information Officer for National Bankruptcy Services, LLC will be speaking about PACT’s proprietary technology for automated Chapter 13 Trustee Payment Posting and Claims Tracking at the Mortgage Bankers Association National Mortgage Servicing Conference on Wednesday 2/15/17 at 1:30PM at the Gaylord Texan Dallas Texas. PACT’s proprietary technology and patented process provides Chapter 13 ledger balance and payment reconciliation information on client’s accounts with over 200 nationwide Chapter 13 Trustees data daily.  PACT’s application suite is focused on helping clients directly address the misapplication of funds through Chapter 13 Trustee payment posting automation and Claims Tracking.




Improves Operational Efficiency

      • Proprietary automated process reduces labor cost for bankruptcy associates and cash management associates
      • Decrease research and claim tracking effort for bankruptcy associates
      • Increased cash management and payment posting
      • Consolidated forum for trustee payment data

Increases Data Accuracy

          • PACT’s patented processes analyzes and compares client’s data to over 200 Chapter 13 Trustees data daily.
          • Defines pre and post-petition funds allocation
          • Data errors are proactively identified enabling them to be permanently corrected
          • Eliminates data entry errors through automated posting of trustee payments
          • Custom exception reporting
          • Identifies and captures servicer-defined business conditions (e.g. payment changes)

PACT Unites Two Worlds Through An Integration Of Data

        • Matches loans to trustee’s cases and claims
        • Payment allocation instructions for trustee payments
        • Reconciles payment records with the trustee’s ledger
        • PACT interfaces with lender’s servicing systems and with the National Data Center Chapter 13 Trustee information
        • PACT provides the industry a common communication platform/terminology at the data element level for all parties-in-interest (servicers, creditors, attorneys, trustees, judges, and debtors)
        • PACT provides reports to help reconcile servicer payment records with trustee’s payment records and provide evidentiary reporting to the courts

U.S. Court Rejects States' Bid to Defend Consumer Agency - American Bankruptcy Institute

Feb 03, 2017 - 8:02pm

A U.S. appeals court yesterday rejected separate bids by 16 states and two Democratic lawmakers to defend the U.S. Consumer Financial Protection Bureau in a legal battle that could defang the agency created under former President Barack Obama, Reuters reported. In a brief order, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit denied a request to intervene filed by the states, including New York and Connecticut. The court also rejected similar motions filed by nonprofit consumer groups and two lawmakers, U.S. Senator Sherrod Brown of Ohio and congresswoman Maxine Waters of California, also seeking to defend the board. The court ruled last October that the structure of the agency, charged with guarding consumer finances, was unconstitutional. The agency immediately asked the court to reconsider its decision but the Trump administration could drop the appeal.

Fannie Mae-Freddie Mac Should Be Utilities, Trade Group Says - American Bankruptcy Institute

Feb 01, 2017 - 8:02pm

A powerful housing trade group is wasting no time in pushing the Trump administration and Republican-led Congress to address one of the last unresolved issues from the financial crisis, outlining a proposal yesterday to overhaul mortgage-finance giants Fannie Mae and Freddie Mac, Bloomberg News reported. The Mortgage Bankers Association plan would make Fannie and Freddie privately-owned utilities and cap their returns on capital. It would also turn the government’s implicit backstop of the companies into an explicit guarantee of the mortgage-backed securities they sell to investors.

Trump Reverses Obama's Mortgage Fee Cuts - American Bankruptcy Institute

Jan 25, 2017 - 6:01pm

Soon after Donald Trump was sworn in as president, his administration undid one of Barack Obama’s last-minute economic-policy actions: a mortgage-fee cut under a government program that’s popular with first-time home buyers and low-income borrowers, Bloomberg News reported. The new administration on Friday said that it’s canceling a reduction in the Federal Housing Administration’s annual fee for most borrowers. The cut would have reduced the annual premium for someone borrowing $200,000 by $500 in the first year. Last week, Obama’s Housing and Urban Development secretary, Julian Castro, said that the FHA would cut its fees. The administration didn’t consult Trump’s team before the announcement. Republicans have argued in the past that reductions put taxpayers at risk by lowering the funds the FHA has to deal with mortgage defaults.

Cordray Says CFPB Will Continue Enforcement of Existing Rules in Trump Administration - Wall Street Journal

Jan 24, 2017 - 6:01pm

Consumer Financial Protection Bureau (CFPB) Director Richard Cordray yesterday said that the bureau will continue enforcement of existing consumer protection rules at a “steady and vigorous” pace, saying that the arrival of the Trump administration “shouldn’t change the job at all,” the Wall Street Journal reported.  Uncertainty now surrounds the bureau’s future, including whether fundamental changes will be made to its structure, funding and rule-making agenda, as well as its leadership. Corday declined to answer questions about how a Trump order to freeze new regulations would affect the bureau’s planned rules. He said bureau lawyers were “still digesting” the directive signed Friday and how it might apply to independent agencies such as the CFPB.

Supreme Court to hear Santander debt collection dispute - Reuters

Jan 23, 2017 - 2:01pm

The U.S. Supreme Court on Friday agreed to decide whether firms collecting on debt they bought for pennies on the dollar can be held liable in lawsuits brought by debtors they targeted under a federal law cracking down on debt collectors' abusive practices, Reuters reported. The justices agreed to review a lower court's decision to dismiss a consumer class action lawsuit against Santander Consumer USA Holdings Inc. over allegations it violated the Fair Debt Collection Practices Act. The case hinges on the definition of "creditor" and "debt collector" and whether a company that buys debt should be treated as a creditor and therefore not subject to the law.


Jan 09, 2017 - 5:01pm

Default rates on various types of consumer loans improved in November, according to Standard & Poor's and Experian. The composite default rate for multiple loan types improved three basis points to 0.97% in November compared to the previous year, according to the S&P/Experian Consumer Credit Default Indices. First-mortgage default rates lifted one basis point to 0.82% from the month before, while second-mortgage default rates improved 11 basis points to 0.67%. Consumer spending and other factors do not suggest cause for concern over consumer defaults, David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, said in a Tuesday news release. "Inflation remains low and expectations of future inflation are low and stable, the labor market continues to improve, and wages — long dormant — may be turning upward," he said.

Federal reserve boosts lending rates for first time under obama - washington times

Dec 17, 2016 - 3:12pm

After one of the longest, most telegraphed windups in monetary policy history, the Federal Reserve on Wednesday delivered a small brushback pitch to the American economy, raising its key lending rate by a quarter of a percentage point for the first time since 2006. The move ends an extraordinary run in which the central bank held its borrowing rate at essentially zero for seven years in an effort to pump life into the American economy after the onset of the global financial meltdown and the Great Recession from December 2007 to June 2009. In addition to potentially raising the rates for consumers and businesses on trillions of dollars of car, home, student and commercial loans, the Fed move could play a major role in elections next year through its impact on the economic growth rate.

Fed report says u.s. household net worth declined by $1.2 trillion - american bankruptcy institute

Dec 11, 2016 - 9:12pm

A Federal Reserve report released yesterday said that Americans lost nearly $1.2 trillion in wealth in the third quarter as a shaky stock market contributed to one of the largest declines in household net worth since the economic recovery began, the Wall Street Journal reported today. The decline was driven mostly by a decline in corporate equities, which shed over $2.3 trillion over the quarter. Major stock indexes in the U.S. plunged sharply in late August. So far in the fourth quarter, stocks have regained most of their lost ground, so the decline in net worth may prove fleeting.