COLLEGE LOAN REFINANCING LEGISLATION RETURNS TO CONGRESS
The 114th Congress is again considering legislation to allow borrowers with outstanding student loan debt to refinance at rates set for new borrowers, Collections & Credit Risk reported today. The legislation would allow people with outstanding student loan debt to refinance at interest rates approved last year for new borrowers, according to Sen. Elizabeth Warren (D-Mass.), who re-introduced the Bank on Students Emergency Loan Refinancing Act along with Rep. Joe Courtney (D-Conn.). Warren first introduced the legislation in May 2014. It was voted on in the 113th Congress, and all Senate Democrats, along with three Senate Republicans, voted to move the bill forward, but it fell just short of breaking a Republican filibuster. President Barack Obama then followed that defeat by proposing two plans designed to ease the burden of student loan debt. "Since last year, nearly a million more borrowers have fallen behind on their student loan payments," Warren said. "Young people who are working hard to build a future deserve a real opportunity to succeed, and that means letting struggling borrowers refinance their student loans to take advantage of lower interest rates -- the same way people refinance a mortgage, a car loan or business debt." Read more.
Not able to catch the remarks by Sen. Warren at the opening reception of ABI's 33rd Annual Spring Meeting last Thursday? Watch them here.
COMMENTARY: CONGRESS SHOULD CONSIDER ALTERNATIVES TO PUERTO RICO BANKRUPTCY
While Congress is considering a measure that would allow Puerto Rico to declare bankruptcy, a measure that could turn into a short-term bailout, it would be much wiser to insist on responsible measures that focus on comprehensive, long-term remedies, according to a PennLive.com commentary yesterday. Puerto Rico has a staggering $73 billion in debt, and Puerto Rico Gov. Alejandro Garcia Padilla has exacerbated the financial situation by signaling his intent to avoid paying debts, which has left the island's credit rating at junk status and reduced investor appetite. A House Judiciary subcommittee in February heard arguments for granting Puerto Rico eligibility under chapter 9. This seems innocuous at first glance, according to the commentary, but a closer look reveals bankruptcy could pose a threat to taxpayers as well as to Americans' retirement savings. Many Americans are invested in Puerto Rico's bonds through their 401(k)'s and mutual funds and could take a financial hit as a result of chapter 9 being extended to Puerto Rico. Lawmakers should reject any sort of bailout and demand comprehensive changes in Puerto Rico's governance and finances, according to the commentary. Read more.
CASE PUTS FOCUS ON THE THREAT OF JAIL TO PAY CHILD SUPPORT
Walter Scott’s controversial death in South Carolina has focused national attention not just on police violence, but also on the use of jail to pressure parents to pay child support, a policy employed by many states today, the New York Times reported yesterday. While investigations continue into the scuffle and traffic stop that led to his death, Scott's family alleged that he attempted to flee the scene because of a warrant out for his arrest for nearly $18,000 of unpaid child support. Though the threat of jail is considered an effective incentive for people who are able but unwilling to pay, many critics assert that punitive policies are trapping poor men in a cycle of debt, unemployment and imprisonment. The problem begins with child support orders that, at the outset, can exceed parents' ability to pay. When parents fall short, the authorities escalate collection efforts, withholding up to 65 percent of a paycheck, seizing bank deposits and tax refunds, suspending driver’s licenses and professional licenses, and then imposing jail time. "Parents who are truly destitute go to jail over and over again for child support debt simply because they're poor," said Sarah Geraghty, a lawyer with the Southern Center for Human Rights, which filed a class-action lawsuit in Georgia on behalf of parents incarcerated without legal representation for failure to pay. There is no national count of how many parents are incarcerated for failure to pay child support, and enforcement tactics vary from state to state, as do policies such as whether parents facing jail are given court-appointed lawyers. But in 2009, a survey in South Carolina found that one in eight inmates had been jailed for failure to pay child support. In Georgia, 3,500 parents were jailed in 2010. The Record of Hackensack, N.J., reported last year that 1,800 parents had been jailed or given ankle monitors in two New Jersey counties in 2013. Read more.
ANALYSIS: CEOS AWARDED MORE CASH PAY
Cash compensation for chief executives rose at its fastest rate in at least four years in 2014, swelling to 37.3 percent of total CEO compensation, higher than it has been since 2010, according to a survey of early proxy filings by the Hay Group for the Wall Street Journal. The rise in cash pay contrasts with trends just after the financial crisis, when shares had cratered and companies filled out their top officers’ pay packages with equity grants. Overall CEO pay rose more rapidly last year than it has in recent years, according to the Hay Group survey, which looked at 50 companies that posted more than $8.7 billion in revenue and filed their annual proxy statements by early March. Total pay was up by a median 6.9 percent to $12.2 million, bigger than the 4.3 percent increase a year earlier. Shareholders did better, with a total return of 23 percent in 2014 among the companies that were analyzed. Read more. (Subscription required.)
LATEST ABI PODCAST LOOKS AT CFPB'S PROPOSED REGULATIONS ON PAYDAY AND VEHICLE TITLE LOANS
ABI Resident Scholar Prof. Anne Lawton talks with Jon Pearson of Ballard Spahr LLP about the Consumer Financial Protection Bureau's recently proposed regulations on payday and vehicle title loans. Click here to listen to the podcast.
NEW OFFICERS AND DIRECTORS ELECTED DURING ABI’S 33rd ANNUAL SPRING MEETING
The following members of the American Bankruptcy Institute (ABI) were elected to leadership positions as officers and directors during ABI's 33rd Annual Spring Meeting, held April 16-19 in Washington, D.C.:
James Patrick Shea of Armstrong Teasdale LLP (Las Vegas) becomes ABI President for a one-year term, succeeding Brian L. Shaw of Shaw Fishman Glantz & Towbin LLC (Chicago), who now assumes the position of Immediate-Past President. Jeffrey N. Pomerantz of Pachulski Stang Ziehl & Jones LLP (Los Angeles), formerly ABI Vice President- Education, was named President-Elect and will become President in April 2016. Patricia A. Redmond of Stearns, Weaver, Miller, Weissler, Ahadeff & Sitterson, PA (Miami) succeeds James T. Markus of Markus Williams Young & Zimmermann LLC (Denver) as Chairman of the Board for a one-year term. Douglas E. Deutsch of Chadbourne & Parke, LLP (New York) was named to a two-year term as ABI's Vice President-Education, succeeding Pomerantz. Bankruptcy Judge Dennis R. Dow (W.D. Mo.; Kansas City) was elected to serve as Secretary, succeeding Rudy J. Cerone of McGlinchey Stafford, PLLC (New Orleans, La.). Newly named to ABI's 17-member Executive Committee are Bankruptcy Judge Eugene R. Wedoff (N.D. Ill.; Chicago) and Douglas Lutz of Frost Brown Todd (Cincinnati). For more information, including the full list of new Board of Directors, please click here.
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NEW CASE SUMMARY ON VOLO: O&S TRUCKING INC. V. MERCEDES BENZ FINANCIAL SERVICES USA (IN RE O&S TRUCKING INC.; 8TH CIR.)
Summarized by William Wallo ofWeld, Riley Prenn & Ricci SC
The Eighth Circuit BAP dismissed the debtor's appeal from an order confirming its third amended plan on the grounds that the debtor did not have standing and that the debtor's arguments were moot.
There are nearly 1,700 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI's Volo website.
NEW ON ABI'S BANKRUPTCY BLOG EXCHANGE: HOW LONG DOES BANKRUPTCY STAY ON A CREDIT REPORT, EVEN IF CASE IS DISMISSED?
A recent ABI Blog Exchange post examined why a debtor continues to have a bankruptcy on his credit report, even though the chapter 13 case was dismissed.
To read more on this blog and all others on the ABI Blog Exchange, please click here.
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