Republican lawmakers are taking aim at the growing practice of federal judges issuing nationwide rulings, hoping to tackle an issue that has repeatedly stymied President Trump’s agenda during his year-and-a-half in office, the Wall Street Journal reported. The House Judiciary Committee will consider legislation today to curb nationwide injunctions — when a federal judge on one of the U.S.’s 94 district courts issues a ruling that covers the entire country, often halting a presidential initiative, program or action. The bill, proposed by committee Chairman Bob Goodlatte (R-Va.), would instruct judges to write rulings that apply only to the individuals, organizations or entities that are part of the lawsuit in front of them.
U.S. securities law can be used to prosecute fraud cases over cryptocurrency offerings, a New York federal judge ruled on Tuesday in what appeared to be the first court decision to address the issue, Reuters reported. The ruling from U.S. District Judge Raymond Dearie in Brooklyn allows federal prosecutors to pursue their case against Maksim Zaslavskiy. The Brooklyn resident was arrested in November on charges that he defrauded investors in two cryptocurrencies, violating the federal Securities Exchange Act. Prosecutors have said that Zaslavskiy last year raised at least $300,000 from investors in a cryptocurrency called REcoin, which he claimed was backed by real estate, and another cryptocurrency called Diamond, which he said was backed by diamonds. In fact, prosecutors said, no real estate or diamonds backed the virtual currencies.
Federal Reserve figures released yesterday showed that consumer borrowing picked up in July, MarketWatch.com reported. Total consumer credit rose $16.6 billion in July to a seasonally adjusted $3.91 trillion. That’s an annual growth rate of 5.1 percent. Revolving credit, such as credit cards, rose only slightly in July. Borrowing on credit cards rose by 1.5 percent, reversing a 1.4 percent drop in June. Non[-] revolving credit, typically auto and student loans, jumped 6.4 percent in July after a 4 percent gain in the prior month. That is the largest increase in eight months. The report does not include mortgage debt.
The Consumer Financial Protection Bureau faced a legal challenge at the Supreme Court on Thursday to its single-director format, the Washington Times reported. State National Bank of Big Spring, Texas, along with the nonprofit Competitive Enterprise Institute and the seniors’ advocacy group 60 Plus Association, filed a petition with the high court to hear a lawsuit that seeks to declare the CFPB’s organizational structure unconstitutional. The agency was created in 2010 as part of the Dodd-Frank financial regulatory law. The petition from CEI notes that the bureau has a single director that the president cannot remove from office for policy reasons, that Congress has no control over or oversight of CFPB funding, and that the bureau lacks internal checks or balances of a multimember commission.
PenAir Chief Operating Officer David Richards thought the $156,215 bankruptcy fee was a mistake. The Anchorage, Alaska, airline had been in bankruptcy since August 2017, paying a quarterly fee of about $20,000 that the Justice Department collects from companies in chapter 11. PenAir was one of the first businesses to feel the effect of an increase in the fees the court system is charging companies for going through the bankruptcy process, WSJ Pro Bankruptcy reported. The quarterly fee is now capped at $250,000; the previous cap was $30,000. Some bankruptcy lawyers and financial advisers say the price increase is pushing the cost of bankruptcy to an unaffordable level for businesses, which already are struggling between reorganization and shutting down. Congress passed the fee increase as part of a disaster-relief spending bill in October, and it affects companies operating under chapter 11 protection that spend more than $1 million a quarter on operating expenses. Companies that spend below that amount would pay a fee of $4,875 or less. The new fee system is set to end in 2022, but it will be reviewed each year. If the trustee program account tops $200 million during an annual check on Sept. 30, the higher fees would be suspended for the next year and the old $30,000 fee cap would apply, until its next annual check.
California is taking a financial wallop from unrelenting wildfires that have drained its firefighting budget and prompted nearly $1 billion in property claims even before the start of the dangerous fall fire season, the Associated Press reported. The disclosures came as a roaring blaze in a rural area near the Oregon state line closed 45 miles of heavily traveled Interstate 5, the main highway from Mexico to Canada. Fierce orange flames forced panicked truckers to abandon big-rigs and brought screams from motorists as they watched the advancing fire in Shasta-Trinity National Forest. The wildfire flared just weeks after a blaze in the Redding area killed eight people and burned about 1,100 homes. California’s insurance commissioner said that victims of that fire and one in the Mendocino area — the two largest blazes in the state so far this year — have filed more than 10,000 claims so far totaling $845 million. The two wildfires destroyed or damaged a combined 8,800 homes and 329 businesses. “The worst may be yet to come,” Commissioner David Jones warned, noting that California wildfires are typically more destructive after Sept. 1. The director of the state’s firefighting agency also said in a letter to lawmakers that the agency only had about $11 million remaining in its annual budget and anticipates needing another $234 million to add firefighters and helicopters, and to cover other costs of fires expected later this year. The department had spent $432 million through the end of August. The legislature budgets for firefighting costs based on historical averages.
U.S. regulators said yesterday that they will giving the public an extra 30 days to comment on a proposed rewrite of the “Volcker Rule” banning proprietary trading by banks. The five regulators charged with enforcing the rule will now accept comments until Oct. 17. Regulators announced a proposal to simplify the rule at the end of May, after years of complaints from banks that the original rule was too complicated. The Volcker Rule was a centerpiece of tougher rules established following the 2007-2009 financial crisis, and is aimed at barring banks from engaging in profit-seeking trades with customer funds. The Federal Reserve, Federal Deposit Insurance Corporation, Securities and Exchange Commission, Commodity Futures Trading Commission and Office of the Comptroller of the Currency share responsibility for writing and enforcing the rule. A final version of the rule could be completed as soon as early 2019.
A decade after a financial crisis that paralyzed the global economy, Federal Reserve officials are debating how to apply one of the central lessons they drew from that dark episode, the Wall Street Journal reported. The Fed has two tools for stamping out financial bubbles. It can use either regulation or interest-rate increases to prevent banks and other financial institutions from getting carried away during an economic boom. Many Fed officials concluded after the last crisis that it’s best to use regulation. They can apply that tool surgically, while aggressive interest-rate increases — like taking a sledgehammer to a nail — might damage the broader economy in the name of financial stability. Some Fed officials want to use one of the regulatory tools the central bank developed after the crisis, called a countercyclical capital buffer. It can require the U.S.’s largest banks to sock away additional capital during good times so they have more to fall back on when loans go bad during bad times, like socking oil away in the nation’s strategic petroleum reserve. But other officials, as well as the banking industry, have questioned why the tool is needed now, when bank capital levels are high and financial-stability risks appear in check.
Consumers filing for bankruptcy in 2017 reported aggregated assets of $80 billion and aggregated total liabilities of $105 billion, according to an annual report filed by the Judiciary with Congress, according to a DOJ press release. The report, required by Congress under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, describes the activities of individuals with predominantly consumer debt. The report is found here.
Twenty-one changes to fees included in the Bankruptcy Court Miscellaneous Fee Schedule effective Sept. 1 are to be charged for services provided by the bankruptcy courts. The updated charges are included here