The second part contains the Bankruptcy Judgeship Act of 2017 that:
• Extends the temporary judgeships by 5 years in certain districts;
• Amends chapter 12 of the Bankruptcy Code;
• - Increases the quarterly fee payable to the U.S. trustee by chapter 11 (reorganization) debtors whose disbursements equal or exceed $1 million in a fiscal year unless the balance in the U.S. Trustee System Fund exceeds $200 million.
Consumer-debt levels are now well above those seen before the Great Recession. As of June, US households were more than half a trillion dollars deeper in debt than they were a year earlier. This according to the latest figures from the Federal Reserve. Total household debt now totals $12.84 trillion. The proportion of overall debt that was delinquent in the second quarter was steady at 4.8%. The New York Fed, though, warned over transitions of credit-card balances into delinquency, which "ticked up notably." Unlike government debt, consumer loans actually need to be paid back.
The acting chief of a top federal banking regulator is implementing significant regulatory changes in his temporary post and isn’t subject to the ethics restrictions that would apply to his permanent successor, raising concerns from lawmakers, the Wall Street Journal reported. Keith Noreika, the first banking regulator installed by the Trump administration, isn’t bound by the usual curbs on lobbying the agency he now leads, the Office of the Comptroller of the Currency, if he returns to the private sector. Noreika has stood out for his vocal criticism of a Consumer Financial Protection Bureau rule that would have eased the way for class-action lawsuits against banks. Congress voted to repeal that rule on Tuesday. Now lawmakers and others are raising concerns about his job status, which shields him from restrictions other senior officials must follow. Noreika, who wasn’t available for comment, would voluntarily abide by some rules that don’t apply to him, an OCC spokesman said. Noreika, speaking to reporters after a Washington conference last week, said: “I think I am subject to all the postemployment restrictions that everyone else is, and I should be.”
The Republican-led Senate narrowly voted yesterday to repeal a banking rule that would let consumers band together to sue their banks or credit card companies to resolve financial disputes, the Associated Press reported. Vice President Mike Pence cast the final vote to break a 50-50 tie. The banking industry lobbied hard to roll back the regulation, which the Consumer Financial Protection Bureau unveiled in July. The rule would ban most types of mandatory arbitration clauses found in the fine print of agreements that consumers enter into when opening checking accounts or getting credit cards.
A new report released yesterday from the U.S. Treasury Department said that the Consumer Financial Protection Bureau’s (CFPB) rule banning banks and credit card companies’ ability to prevent customers from banding together to sue them relies on insufficient research and is misguided, Reuters reported. The CFPB rule abolishing “mandatory arbitration clauses” was released on July 10, and was immediately threatened by Republicans in Congress and President Donald Trump’s administration. In its report, the Treasury said that the CFPB failed to meet its statutory requirements in analyzing the need for the ban and in drafting the rule. “The bureau failed to meaningfully evaluate whether prohibiting mandatory arbitration clauses in consumer financial contracts would serve either consumer protection or the public interest,” the Treasury said in its report.
Swaps clearinghouses are pushing back against the suggestion by a top Trump administration official that they have become too big and pose a market risk, saying that regulatory and internal “stress tests” prove there is no cause for alarm, the Wall Street Journal reported today. National Economic Council Director Gary Cohn said last week that he worried the entities could be a “new systemic risk” to financial stability, a viewpoint supported by policy makers across the government. A day after Cohn’s comments, a government regulator said its stress tests showed big U.S. clearinghouses could withstand a crisis-triggered liquidity crunch even if two of their major clearing member banks defaulted. Clearinghouses were beefed up after the 2008 financial crisis as the 2010 Dodd-Frank Act routed more transactions through them in an effort to protect financial stability. Still, Trump-appointed policy makers and clearinghouses agree the clearing mandate for swaps trading, widely regarded as one of the most successful parts of Dodd-Frank, could be tweaked to counter some consolidation and liquidity concerns. In particular, clearinghouses and their bank clearing members, as well as regulators at several agencies, say that a capital rule intended to provide a buffer against risky investments is actually preventing banks from doing more swap trading at clearinghouses, depressing liquidity.
President Trump has picked Joseph J. Simons, a veteran antitrust lawyer who has represented tech giants like Microsoft, to lead the Federal Trade Commission at a time of broad bipartisan concern over corporate consolidation and big deals in the waiting, the New York Times reported yesterday. Trump has also chosen Noah Phillips, chief counsel for Senator John Cornyn, Republican of Texas, and Rohit Chopra, a fellow at a consumer advocacy group, to fill the remaining two seats at the agency, said Natalie M. Strom, assistant press secretary at the White House. The consumer protection and competition agency has been led by just two commissioners over the last 10 months. Trump’s other leading antitrust official, Makan Delrahim, was recently confirmed to lead competition cases at the Justice Department. The nominations will be reviewed by Congress but are expected to be approved.
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.
U.S. housing starts decreased last month for the fifth time in six months, as builders felt the brunt of construction delays as well as labor and material shortages caused by hurricanes in Florida and Texas, the Wall Street Journal reported today. Housing starts fell 4.7 percent in September from the previous month to a seasonally adjusted annual rate of 1.127 million, the Commerce Department said yesterday. Single-family starts declined 15.3 percent in the south, driven by the effects of hurricanes Irma and Harvey, which caused builders to delay beginning new projects and made labor and material significantly more expensive in those areas. Residential building permits, which can signal how much construction is in the pipeline, fell 4.5 percent to an annual pace of 1.215 million last month.
U.S. President Donald Trump has a pool of five candidates to choose from for the next chair of the Federal Reserve and is likely to announce his choice before going to Asia in early November, Reuters reported yesterday. Trump has an interview scheduled on Thursday with current Fed Chair Janet Yellen, whose term expires in February. She is one of the five candidates while the others consist of Trump’s chief economic adviser, Gary Cohn, along with former Fed Governor Kevin Warsh, Fed Governor Jerome Powell and Stanford University economist John Taylor. Trump, at a joint news conference in the Rose Garden with Greek Prime Minister Alexis Tsipras, said in all likelihood he would choose one of the five as the next Fed chair. Announcing the choice by the time Trump leaves for Asia on Nov. 3 would give the Senate time for the confirmation process, according to sources.