Commentary: Bankruptcy Venue Reform Not Likely to Happen This Year*
The chances for passage this congressional year for S. 2282, the "Bankruptcy Venue Reform Act of 2018," are not looking good, according to a commentary by Mark Salzberg of Squire Patton Boggs in Law360. The bill was introduced in January and remains in the Senate Judiciary Committee. There is little indication that it will gain traction in the committee, much less see a Senate floor vote, during the 115th Congress, according to Salzberg. Given the rapidly approaching August recess and the November midterm elections, it is extremely doubtful that the bill will pass the Senate this year, let alone the House (where it has not even been introduced). Of course, if the bill is not passed this Congress, it could be reintroduced in the next Congress. However, given the lack of movement in committee and the minimal number of co-sponsors, it is highly questionable whether this bill will ultimately garner the necessary support to pass in committee, the Senate and ultimately the House, according to Salzberg. The bill, introduced by Sen. John Cornyn (R-Texas), has bipartisan support from Sen. Elizabeth Warren (D-Mass.) The wild card may be the post-election constituency of the Senate and House, as new members may take some interest in this issue.
*The views expressed in this commentary are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI.
Swaps Rules Due for Overhaul in Bid to Boost Liquidity
U.S. regulators want to make it easier for companies to complete swaps trades, responding to industry complaints that post-crisis rules have hurt market liquidity, the Wall Street Journal reported. Commodity Futures Trading Commission Chairman J. Christopher Giancarlo today laid out his vision for overhauling the system, setting the stage for new rules to be rolled out in the coming months. Giancarlo, a Republican, has long criticized the swap-execution rules enacted by the CFTC under former Democratic Chairman Gary Gensler, saying they are overly prescriptive and run counter to what Congress intended in the 2010 Dodd-Frank financial law. Giancarlo has said that liquidity in swaps markets has been hurt by the rules, which restricted trades to a smaller subset of trading platforms rather than allowing market participants to trade according to “any means of interstate commerce,” as Dodd-Frank states.
Commentary: The Next Threat Stalking American Farmers Is the End of Cheap Money
American farmers have managed to stay afloat despite years of shrinking crop values, the lowest incomes since the recession and a budding trade war with China. They’re now feeling a new squeeze as borrowing money is getting more expensive as interest rates rise. For some, it may be fatal, according to a Bloomberg News commentary. “Commodity prices stink, and they’re set to stink for a long time,” said Jason Barnes, 50, who has 400 head of cattle and farms 1,300 acres of corn, wheat and sunflowers about 35 miles (56 kilometers) north of Pierre, South Dakota. “We’ve been able to survive because of cheap money. You raise rates high enough, it will have a huge impact on people’s ability to continue farming." The Federal Reserve is tightening credit as the economy shows signs of strength, ending a prolonged period of low interest rates in the wake of the financial crisis. As a result, banks pushed the fixed rate on U.S. farm loans to a five-year high of 5.6 percent in the fourth quarter, up from 5.3 percent a year earlier, Fed data show. With more increases expected through 2019, farmers may see their thin profit margins evaporate, according to the commentary.
Be sure to check out the forthcoming edition of the ABI Journal for an article on this topic.
Consumer Bureau Looks to End Public View of Complaints Database
Financial companies have worked to diminish the Consumer Financial Protection Bureau’s powers since the day the agency was created. Now, they’re on the brink of having one of their top demands granted: an end to the regulator’s public database of complaints about their products and services, the New York Times reported. Since 2011, the bureau has maintained an open, searchable record of more than one million consumer reports about inaccurate debt collections, illegal fees, improper overdraft charges, mistakes on loans and other problems. By law, the consumer bureau has to collect those complaints. But it is not legally required to share them online. Mick Mulvaney, the bureau’s acting director, hinted on Tuesday that he would like to end that public access. “I don’t see anything in here that says I have to run a Yelp for financial services sponsored by the federal government,” he said at a banking industry conference in Washington. “I don’t see anything in here that says that I have to make all of those public.”
Senator Presses Honda on Efforts to Track Down Deadly Takata Air Bags
A U.S. senator who heard testimony last month on the recall of Takata automotive air bags, which have sprayed shrapnel that has killed 22 people and injured hundreds more, is continuing to put pressure on Honda Motor Co. about its efforts to track down the most dangerous of the air bags, the Washington Post reported. Honda acknowledged in communication with the Senate Committee on Commerce, Science and Transportation last month that 62,307 people continue to drive with air bags that were tainted by high humidity at a Takata factory in Monclova, Mexico, before they were installed in Honda or Acura vehicles. While most Takata inflators go bad over time when exposed to temperature changes and humidity, these “Alpha” inflators have been given the highest priority in the recall effort, and Honda said that more than a million of them have been replaced. “Given the significant public safety threat caused by these defective parts, the removal of all alpha inflators from America’s roads must be an immediate priority,” Sen. Amy Klobuchar (D-Minn.) wrote in a letter yesterday to Honda Vice President Rick Schostek. Takata, which has filed for bankruptcy protection, reached a $650 million settlement with the U.S. Department of Justice in February for criminal misconduct involving an alleged cover-up of testing that uncovered the defect. As part of the settlement, Takata paid a $25 million criminal penalty and $850 million in restitution to automakers. The company also established a $125 million compensation fund for motorists harmed by the air bags.
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Nominations Now Being Accepted for the 2018 Class of ABI's “40 Under 40” Program!
Nominations are now open for ABI's “40 Under 40” program. This program recognizes outstanding young insolvency professionals who are driven by success, motivated by challenges and are role models for their peers. If you are, or know of, a dynamic insolvency professional who is committed to growth and excellence both professionally and in your community, this is one opportunity not to be missed! Visit the website for additional details on nominations and applications.
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