CDC Extends Eviction Moratorium a Month, Says It’s Last Time

CDC Extends Eviction Moratorium a Month, Says It’s Last Time

June 24, 2021

ABI Bankruptcy Brief

CDC Extends Eviction Moratorium a Month, Says It’s Last Time

The Biden administration on Thursday extended the nationwide ban on evictions for a month to help millions of tenants unable to make rent payments during the coronavirus pandemic but said this is expected to be the last time it does so, the Associated Press reported. Dr. Rochelle Walensky, director of the Centers for Disease Control and Prevention, extended the eviction moratorium from June 30 until July 31. The CDC said that “this is intended to be the final extension of the moratorium.” A Biden administration official said the last month would be used for an “all hands on deck” multi-agency campaign to prevent a massive wave of evictions. One of the reasons the moratorium was put in place was to try to prevent further spread of COVID-19 by people put out on the streets and in shelters. As of the end of March, 6.4 million American households were behind on their rent, according to the Department of Housing and Urban Development. Nearly 1 million said eviction was very likely in two months, and 1.83 million said it was somewhat likely in the same period. The extension announcement Thursday was accompanied by a flurry of eviction-related administration activity, including by the Treasury Department and the Justice Department. New Treasury guidance was issued, encouraging states and local governments to streamline distribution of the nearly $47 billion in available emergency rental assistance funding. And Associate Attorney General Vanita Gupta released an open letter to state courts around the country encouraging them to pursue a number of alternatives that would protect both tenants and landlords.​​​

U.S. Weekly Jobless Claims Fall; Spending on Equipment Strong

Fewer Americans filed new claims for unemployment benefits last week as the labor market steadily recovers from the COVID-19 pandemic amid a reopening economy, but a dearth of willing workers could hinder faster job growth in the near term, Reuters reported. The economy appears to be at cruising speed more than half way through the second quarter, with other data on Thursday showing strong growth in business spending on equipment in May. While the goods trade deficit widened last month, that was because of an increase in imports as businesses desperately try to keep up with robust demand. Warehouses at retailers are almost bare. Initial claims for state unemployment benefits fell 7,000 to a seasonally adjusted 411,000 for the week ended June 19, the Labor Department said. Data for the prior week was revised to show 6,000 more applications received than previously reported. The first increase since late April was blamed by economists on volatility in the aftermath of the May 31 Memorial Day holiday. Claims have dropped from a record 6.149 million in early April 2020, but are still above the 200,000-250,000 range that is viewed as consistent with a healthy labor market. They remain elevated despite 12 states with Republican governors, including Iowa, Mississippi, Alabama and West Virginia, pulling out of federal government-funded unemployment programs, including a $300 weekly check, which businesses complained were encouraging the jobless to stay at home. Thirteen other states, including Texas, Georgia, Maryland and Florida, will end these benefits for residents between June 26 and July 10. Louisiana is ending the weekly supplementary check on July 31, the only state with a Democratic governor to terminate federal benefits. For the rest of the country, they will lapse on Sept. 6. In a separate report on Thursday, the Commerce Department said shipments of non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, increased 0.9% last month after advancing 1.0% in April.​​​

Biden Announces Bipartisan Deal on Infrastructure

President Biden today announced he'd reached an infrastructure deal with a bipartisan group of Republican and Democratic senators, saying both sides gave up some things they wanted to get a rare accord, The Hill reported. Biden acknowledged that the deal would not include proposals he's made for spending to help American families, but firmly endorsed the deal on infrastructure in remarks just outside the White House with the Republican and Democratic senators looking on. The agreement was reached after weeks of negotiations, and with progressive Democrats repeatedly calling on the White House to back away from the talks, which some liberals fear could prevent a much larger package from moving forward. Biden said that he did intend to continue to look for a larger package on spending through a budget reconciliation measure, which would allow it to pass the Senate with just Democratic votes.​​​

Millions of Americans Refinanced Last Year — but Fewer Black and Latino Homeowners Did

Refinancings were popular in 2020, but not every household caught the wave, the Wall Street Journal reported. From January to October of last year, only 6% of Black borrowers refinanced their mortgages, versus 12% of white borrowers. The findings appear in a new report by economists at the Federal Reserve Banks of Atlanta, Philadelphia and Boston. Researchers matched borrower data from Fannie Mae, Freddie Mac and FHA loans with data from firms that track mortgage performance, including Equifax and mortgage-data firm Black Knight Inc. BKI 0.71% The report found that 14% of Asian borrowers refinanced, while borrowers who identified as Latino clocked in at 9%. Of an estimated $5.3 billion of savings for all households that refinanced during the 10-month period examined in the Fed report, only $198 million, or 3.7%, went to Black households. Borrowers who refinance generally pay a fee in order to lock in lower interest rates and reduce the total cost of their loan. Historically low rates combined with people spending more time at home led millions to renegotiate the terms of their mortgages, resulting in eight million refinances over the course of 2020, according to data from Freddie Mac. The savings from refinancing can be significant. Freddie Mac estimates doing so could save nearly half of Black and Latino households around $1,200 a year. (Subscription required.)​​​

Extended Warranties for Cars Are ‘Fraught With Peril for Consumers’

Vehicle service contracts are "fraught with peril for consumers," especially economically vulnerable people who can’t afford to have their car break down, according to Rosemary Shahan, the president of the Consumers for Auto Reliability and Safety, the New York Times reported. “Many consumers are complaining of high pressure, misrepresentations, contracts not being fulfilled, refunds not provided and overall just poor customer service,” said Michelle L. Corey, the president of the Better Business Bureau of Greater St. Louis. Corey said that the B.B.B. seemed to receive fewer complaints about policies sold by dealers and automakers. In the worst case, telemarketers are just collecting money. “There is no warranty, it is just a flat-out scam,” said Chad M. Canfield, an official with the Michigan attorney general’s office. “We are in the process of some multistate actions to shut those people down.” Any problems are being caused by a few companies, according to the Service Contract Industry Council, a trade association whose members include some automakers. Its website says that the “vast majority” of warranties are from “reputable, licensed companies that abide by current regulations.” But the trade group also warns consumers “to be cautious when dealing with providers who use unsolicited mass marketing techniques, such as direct mail and telemarketing.” More customers are interested in vehicle service contracts as the business is expected to grow to involve billions of dollars in sales, according to a 2019 report by Colonnade Advisors, an investment banking firm based in Florida. The reason for the growth: People are keeping their vehicles longer, and they worry about repair costs — particularly during the pandemic. While business is increasing, so are complaints, according to the B.B.B. In 2019, the Better Business Bureau in the United States and Canada got about 6,700 complaints about companies offering service contracts. Last year, that increased 21 percent to almost 8,200.​​​

In re Verity Health System of California Wins Third Annual "Asset Sale of the Year" by ABI's Asset Sales Committee

The American Bankruptcy Institute’s (ABI’s) Asset Sales Committee announced that In re Verity Health System of California, Inc., Case No. 2:18-bk-20151-ER (C.D. Cal.), won its third annual “Asset Sale of the Year” award. The Asset Sales Committee said that it selected Verity as the top asset sale because the sale (1) was part of one of the largest hospital bankruptcies ever filed; (2) established important precedent regarding the transfer of Medicare and Medicaid Provider Agreements in a bankruptcy case and the limited scope of the California Attorney General’s powers over the sale of nonprofit health care assets in bankruptcy; and (3) saved important institutional hospitals, preserving thousands of jobs and ensuring that residents in these counties and communities continue to have access to critical health care. Honorable mentions from this year's submissions included asset sales in In re Southern Foods Group, LLC, et al. (S.D. Texas) and In re OGGUSA, Inc., f/k/a GenCanna Global USA, Inc. (E.D. Ky.).​​​

Applications for ABI’s 2021 40 Under 40 Class Due By Next Wednesday!
ABI’s “40 Under 40” program recognizes outstanding bankruptcy, insolvency and restructuring professionals from around the world who are 40 years old or younger as of Dec. 1, 2021. The application deadline for members of the 2021 Class is June 30. Honorees will be announced in October and recognized at a special awards ceremony during the 2021 Winter Leadership Conference in early December. In addition:

• Honorees will be invited to attend an exclusive reception with ABI leaders and judicial faculty at the Winter Leadership Conference, as well as future special events;
• Honorees will be profiled on ABI’s website and in the ABI Journal; and
• Each class of honorees will receive other special recognition when attending ABI events. Know a colleague who should be recognized, or would you like to nominate yourself? Click here.

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New on ABI’s Bankruptcy Blog Exchange: Analysis of the Supreme Court's Ruling in Collins v. Yellen

The Supreme Court ruled yesterday in Collins v. Yellen, a case brought by Fannie Mae and Freddie Mac preferred shareholders that challenged both the constitutionality of the FHFA Director's appointment and the 2012 amendment to Treasury's stock purchase agreement with Fannie and Freddie that provided for all of Fannie and Freddie's profits to be swept into Treasury, according to a recent blog post.

To read more on this blog and all others on the ABI Blog Exchange, please click here.

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