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).
Facing wildfire lawsuits that could cost it $17 billion, Pacific Gas and Electric Co. may soon be given a bankruptcy stress test by California regulators to determine just how big a financial blow the utility can survive, the San Francisco Chronicle reported. The test is a piece of draft legislation approved by a conference committee on Tuesday in Sacramento that would let utility companies pass on to their customers costs arising from wildfires sparked by power lines, provided the companies acted reasonably in maintaining their equipment. If they didn’t act reasonably, the companies and their shareholders would have to swallow the costs. But the draft, which was publicly released on Tuesday afternoon with just four days left in the legislative session, contains a big exception. Before forcing a utility to cover the costs of settling wildfire suits, regulators at the California Public Utilities Commission would first have to decide how much the company could afford to pay before “materially impacting its ability to provide adequate and safe service.” Anything above that amount would be passed on to customers.
The Trump administration said it would make $4.7 billion in payments to U.S. farmers to offset losses from trade battles rippling across the globe, MarketWatch.com reported. Agriculture Secretary Sonny Perdue said yesterday that the funds constitute an initial payment to farmers hit by tariffs from major U.S. trading partners, which have left producers of commodities from soybeans to pork to apples vulnerable during a steep downturn in the agricultural economy. Farmers have been anxiously awaiting details of the aid package the USDA pledged in July. The USDA said then that it would extend up to $12 billion in emergency aid in response to U.S. trading partners’ “unjustified retaliation” to trade policies enacted by Trump. Soybean farmers are slated to get roughly three-fourths of the direct payments, or $3.6 billion, followed by producers of pork, cotton, sorghum, dairy and wheat.
The federal official in charge of protecting student borrowers from predatory lending practices has stepped down, NPR.org reported. In a scathing resignation letter, Seth Frotman, who until now was the student loan ombudsman at the Consumer Financial Protection Bureau, says that current leadership "has turned its back on young people and their financial futures." The letter was addressed to Mick Mulvaney, the bureau's acting director. In the letter, Frotman accuses Mulvaney and the Trump administration of undermining the CFPB and its ability to protect student borrowers. The letter raises serious questions about the federal government's willingness to oversee the $1.5 trillion student loan industry and to protect student borrowers. Frotman has served as student loan ombudsman for the past three years. Congress created the position in 2010, in the wake of the financial crisis, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. As ombudsman and assistant director, Frotman oversaw the CFPB's Office for Students and Young Consumers and reviewed thousands of complaints from student borrowers about the questionable practices of private lenders, loan servicers and debt collectors.
A measure of economic confidence among American households rose in August to its highest level since October 2000, the Wall Street Journal reported. The Conference Board yesterday said that its index of U.S. consumer confidence climbed to 133.4 in August from 127.9 in July. The August reading well exceeded economists’ expectations. A gauge of household assessments about the present economic situation increased in August, while an index tracking expectations for the future also rose after declining in June and July. Some 42.7 percent of survey respondents in August said jobs are plentiful, similar to a month earlier when 42.8 percent reported jobs are plentiful. The number of households describing current business conditions as good increased in August to 40.3 percent.
A new study by the National Retail Federation (NRF) released yesterday said that President Trump's threat to slap another $200 billion in tariffs on Chinese good could push up prices and cost U.S. consumers $6 billion, The Hill reported. The NRF study focuses on tariffs that will hit furniture and travel goods from China, arguing that even the threat of billions more in tariffs are causing retailers to raise prices and seek out other suppliers. Retailers are urging the Office of the U.S. Trade Representative to reject Trump's plan to impose another $200 billion in tariffs on Chinese imports, which businesses have been testifying about all week in Washington, D.C. The Trump administration has proposed tariffs of at least 10 percent on $200 billion in Chinese imports and has said the tariffs might be as high as 25 percent.
A National Association of Realtors report showed yesterday that sales of previously owned U.S. homes unexpectedly dropped for a fourth month to the weakest in more than two years, signaling higher prices and tight supplies continue to squeeze demand, Bloomberg News reported. Prospective home buyers are increasingly discouraged by rising borrowing costs and property-price increases that are outpacing wage growth. The share of Americans who say that it’s a good time to buy a home fell in August to 63 percent, the smallest since 2008, the University of Michigan consumer sentiment survey showed on Friday.
The Securities and Exchange Commission said that it plans to rehear dozens of cases that were pending before its in-house administrative-law judges, following a June Supreme Court ruling that faulted the appointment process for those judges, the Wall Street Journal reported. The agency, in an order yesterday revealing how it was responding to the ruling, said that it had reappointed the judges to comply with the court holding. The SEC said that it would give all the cases pending before the in-house judges, or that had been appealed to the five-member commission, the opportunity for a new hearing. The order said that the agency would start fresh on all of the cases, telling the judges they “shall not give weight to or otherwise presume the correctness of any prior opinions, orders, or rulings.” The SEC halted activity in administrative cases after the Supreme Court’s ruling, which said the agency’s judges must be appointed by the commissioners themselves rather than by SEC employees. The SEC uses in-house courts for about 20 percent of all litigated actions brought by the agency.
Farmers fretting over a trade conflict sparked by President Trump’s tariffs may soon get more details on the $12 billion worth of aid that the administration has pledged, as their concerns mount over potentially plunging incomes and market losses, the Wall Street Journal reported. “We certainly are appreciative of it but…we don’t know how it’s going to be determined,” Ryan Pederson, a North Dakota farmer who grows soybeans and canola, said of the proposed farm aid. “You can’t do any planning off of that because you don’t know what it’s going to be.” An Agriculture Department representative this week said that the agency expects to announce official guidelines for the programs by Aug. 24 and be ready to implement them by Sept. 4. Farmers would receive payments between September and the end of their harvest, and would be required to provide documentation of what they grew, the agency said. But details on how much farmers will receive, and how it will be distributed, remain unclear. In July, the White House said it planned to direct the emergency funds to farmers to compensate for losses they face, as other countries retaliate and impose tariffs on U.S. goods.
The credit scores of millions of U.S. consumers have risen following a broad overhaul of how credit-reporting firms handle negative credit information, the Wall Street Journal reported. Consumers who had at least one collections account removed from their files experienced an 11-point increase, on average, in their credit scores, according to a report released yesterday by the New York Federal Reserve. The report was based on a sample of millions of anonymous credit reports from credit-reporting firm Equifax Inc. Collections were completely removed from 8 million consumers’ credit reports in the 12 months through June, resulting in an average 14-point increase. The improvements come after the three largest U.S. credit-reporting firms changed how they deal with certain kinds of negative credit events that some have said are prone to error and unfairly drag down credit scores. The firms — Equifax, Experian PLC and TransUnion — agreed to revamp the reports following settlements with state attorneys general dating back to 2015.