Puerto Rico Oversight Board Draws Ire of House Committee over Inaction on PREPA's Restructuring Agreement

Rep. Rob Bishop (R-Utah), chairman of the House Natural Resources Committee, sent a letter today to the Financial Oversight and Management Board of Puerto Rico focusing on the Board's inaction concerning the approval of the Puerto Rico Electrical Power Authority's (PREPA) restructuring support agreement (RSA). "It appears there is no consensus from the Oversight Board in favor of certifying the PREPA RSA under Title VI of PROMESA," Bishop writes. "This is troubling, as the decision to implement the RSA has already been made by Congress with the passage of PROMESA." Bishop’s committee crafted PROMESA, signed by President Obama last June. Saying that Congress is concerned with the continued failure of the Oversight Board to act on the PREPA RSA, Bishop asks that an explanation for any decision made by the Board in the near future be provided to the Committee. Click here to read the full letter.

For updated news and analysis of Puerto Rico's debt crisis, along with current docket filings in Puerto Rico's case, be sure to visit ABI's "Puerto Rico in Distress" webpage.

As Retail Outlook Dims, Mall Tenants Push for Shorter Leases

After more than a dozen retail bankruptcies this year contributed to thousands of store closures, visibility for the industry is so poor that retailers are pushing for lease renewals as short as a year or two — down from five to 10 years, according to a Bloomberg News analysis. “You’re certainly seeing the renewals geared toward the shorter term, rather than the five-year renewal,” said Andrew Graiser, head of A&G Realty Partners. Retailers are now struggling to figure out how many stores they actually need, he added, and landlords are looking at them “with a much closer eye than they did before.” Somewhere between 9,000 and 10,000 stores will close in the U.S. this year, said Garrick Brown, vice president of America’s retail research for commercial broker Cushman & Wakefield — more than twice as many as the 4,000 last year. He sees this figure rising to about 13,000 next year.

 

Treasury Department Takes Aim at CFPB's Complaint Database

The U.S. Department of the Treasury on Monday formally recommended that Congress and the White House stop public access to a CFPB database that collects consumer complaints about financial companies, tracks responses, and records whether consumers end up satisfied, Bloomberg News reported yesterday. The Treasury Department said that the information should be available only to government authorities. Molly Meiners, a Treasury Department spokeswoman, pointed to recommendations in the report as being consistent with the administration’s core principle of empowering Americans to make informed choices. She added that the public list effectively placed the government’s imprimatur on unsubstantiated claims. The proposal, if passed by Congress, “could create a bigger incentive for companies to take advantage of people,” said Pamela Foohey, an associate professor at Indiana University Maurer School of Law.

 

Analysis: Suniva's Case Could Upend America’s $29 Billion Solar Industry

Solar panel maker Suniva in 2015 sold a 64 percent stake in itself to a solar company in Hong Kong, Shunfeng International Clean Energy Ltd., for $57.8 million. The money was supposed to fund an aggressive expansion, but it didn’t last long, as Suniva lost $29 million last year and filed for chapter 11 protection on April 17, according to Bloomberg BusinessWeek. Days later, Suniva invoked an obscure law to initiate a government trade investigation that has the power to upend the $29 billion U.S. solar industry. Unlike typical trade complaints, which often hinge on charges that companies or countries are violating specific trade rules, this particular law allows the president to unilaterally impose broad tariffs simply if surging imports are hurting U.S. manufacturers. The law has been around since 1974, but for years companies didn’t bother filing such cases, knowing the president would turn them down. “With Trump, there’s a good reason to think he’d consider it,” says Michael Moore, an economics professor at George Washington University who’s an expert in international trade policy. Suniva is asking for import duties of 40¢ per watt for solar cells, which currently sell for 25¢ to 33¢ a watt. If the company prevails, the price of panels imported into the U.S. could double, potentially crippling demand for solar power.

 

Subprime Mortgage Brokers Are in Demand Again

Brokers willing to learn the how to package risky mortgages are in demand again, the Wall Street Journal reported on Tuesday. Mortgage brokers, who serve as middlemen between lenders and borrowers, used to be a key part of the home-loan process. But some brokers faked loan applications and steered people into debt they couldn’t afford. Financial regulation has severely diminished their ranks since the housing meltdown. And big banks with national sales teams say that they won’t use brokers anymore because they are third-party contractors, making it harder to police loan quality. Now, small and midsize independent lenders want the brokers back. Nonbank lenders that typically cater to riskier borrowers say that they need brokers to fan out across the country and arrange mortgages to people with lower credit scores, or who can’t prove their income through a typical tax return. 

 

Are You Signed Up for Tomorrow's Free abiLIVE Webinar Examining Chapter 12?

Don't miss tomorrow's abiLIVE Webinar, "What Everyone Should Know about Chapter 12," featuring a debtor's attorney, a chapter 12 trustee and a bankruptcy judge discussing the special and surprising aspects of chapter 12. The free webinar will take place from noon-1:15 p.m. ET, and CLE is available in states that offer pre-approval. Click here to register!.

Participate at Next Consumer Commission Meeting on July 15 at NACTT

The ABI Commission on Consumer Bankruptcy welcomes you to participate at its next open meeting on July 15 at the NACTT Annual Meeting in Seattle (Sheraton Seattle Hotel). The meeting will be held from 4:00 to 5:30 p.m. PT and is a field hearing for the Chapter 13 Committee. Major topics for consideration by the Committee include (a) chapter 13 eligibility, (b) homeowner issues, (c) chapter 13 plans, (d) credit reporting, (e) local legal culture and (f) after-acquired property. For more information, go to consumercommission.abi.org.To request a time for a public statement or to submit a written statement, email the Commission at [email protected].

For more information on the Commission, including oral and written statements from the May 6 meeting, please click here.

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