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Senate Judiciary Hearing to Assess Small Business Bankruptcy, Chapter 11 Commission Recommendations

ABI Bankruptcy Brief
ABI Bankruptcy Brief
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March 1, 2018

ABI Bankruptcy Brief

Senate Judiciary Hearing to Assess Small Business Bankruptcy, Chapter 11 Commission Recommendations

The Senate Judiciary Subcommittee on Oversight, Agency Action, Federal Rights and Federal Courts will be holding a hearing titled "Small Business Bankruptcy: Assessing the System" on Wednesday, March 7, at 2:30 p.m. Robert Keach of Bernstein Shur, who is co-chair of the ABI Chapter 11 Reform Commission, will testify on the Commission's Small and Medium-Sized Enterprise (SME) case recommendations. For more information about the hearing, please click here.

To review the Commission's SME recommendations, please click here.

Fed Chief: Student Debt Could Hold Back Economic Growth, Should Be Dischargeable in Bankruptcy

Federal Reserve Chairman Jerome Powell said today that burgeoning levels of student loan debt could slow down economic growth over time, reported. Education debt swelled to nearly $1.38 trillion at the end of 2017, with 11 percent of borrowers 90 days or more delinquent, according to the New York Fed. Policymakers have sought ways to keep the student loan problem from swelling out of control but have struggled to come up with solutions. Powell said he generally supports the idea of a vibrant education loan climate, but added that borrowers need to be informed of the risks they're taking. He also wondered why student debt can't be discharged in bankruptcy. "I'd be at a loss to explain why that should be the case," he said, while acknowledging that the issue is one for Congress to tackle.
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The ABI Consumer Commission's Committee on Case Administration and the Estate is considering the important issue of student loan debt and bankruptcy, and the Commission is reviewing a paper submitted by ABI's Consumer Bankruptcy Committee at its last open meeting.

For more on student loans and bankruptcy, be sure to pick up a copy of the updated and revised Graduating with Debt: Student Loans under the Bankruptcy Code, Second Edition.

Authors Discuss Current State of Consumer Bankruptcy Law, Most Litigated Consumer Issues

ABI Deputy Executive Director Amy Quackenboss talks with David Cox of Cox Law Group (Lynchburg, Va.) and Elizabeth Gunn of the Office of the Virginia Attorney General (Richmond, Va.) about their new publication, Consumer Bankruptcy: Fundamentals of Chapter 7 and Chapter 13 of the U.S. Bankruptcy Code, Fourth Edition. Cox practices bankruptcy law throughout the Western District of Virginia. Gunn works as the bankruptcy specialist in the Virginia Attorney General's Division of Child Support Enforcement and is a member of ABI's inaugural "40 Under 40" class. The new edition is an update on the fundamentals of consumer bankruptcy proceedings under chapters 7 and 13 of the Code. The authors discuss some of today's most litigated questions and address the current state of consumer bankruptcy law. Click here to listen.

To order a copy of ABI's Consumer Bankruptcy: Fundamentals of Chapter 7 and Chapter 13 of the U.S. Bankruptcy Code, Fourth Edition.

Senate Readies Rollback of Bank Rules

The Senate is expected this month to approve the most significant rollback of post-crisis financial rules since Republicans took control of Washington, D.C., last year, the Wall Street Journal reported. The bipartisan legislation, supported by the Trump administration and top Federal Reserve officials, would relax dozens of rules for small to medium-size banks, shaking up the banking sector with policy changes that could encourage deal-making and make it easier for banks to expand. A central piece of the bill could relieve about two dozen regional banks from the stricter rules put in place by the 2010 Dodd-Frank financial law, which sought to prevent another financial crisis with restrictions across the industry. The bill will raise the threshold at which banks face tighter oversight to $250 billion in assets from the current $50 billion - a victory for midsize banks, which have long said they shouldn't be lumped in with the largest banks.
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Legal Scholars Examine Effects of SCOTUS Ruling in Merit Management Group, LP v. FTI Consulting, Inc.

The Supreme Court on Feb. 27 ruled in Merit Management Group, LP v. FTI Consulting, Inc. (16-784) that the only relevant transfer for purposes of the §546(e) safe harbor is the transfer that the trustee seeks to avoid. ABI Editor-at-Large Bill Rochelle talks with Prof. Bruce Markell of Northwestern's Pritzker School of Law and Prof. Ralph Brubaker of the University of Illinois College of Law about their perspectives on the impact of the Supreme Court's ruling. Click here to listen.

U.S. Government Extends Foreclosure Relief in Puerto Rico, Virgin Islands

The Federal Housing Administration today extended through May 18 a foreclosure moratorium for certain homeowners in Puerto Rico and the U.S. Virgin Islands, which were devastated last September by Hurricane Maria, Reuters reported. Homeowners whose mortgages are insured by the FHA will get an additional 60 days of foreclosure relief on top of the previously imposed 180-day moratorium, according to a statement from the U.S. Department of Housing and Urban Development, the FHA's parent agency. FHA insures more than 117,000 mortgages in the U.S. territory of Puerto Rico, or about one-third of all mortgages on the island. Though Puerto Rico is home to 3.4 million U.S. citizens, the number of mortgages is limited by the prevalence of illegal housing, thought to comprise around half the homes on the island. FHA also insures around 600 mortgages in the Virgin Islands. Both territories' economies are struggling to bounce back from the Sept. 20 hurricane.
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The people of Puerto Rico need your help. Thousands are still without regular power service, and many more need to rebuild their homes. Please join the ABI Endowment and the Mariano Rivera foundation for a charity benefit for Puerto Rico on April 4, 2018, at the New York Athletic Club.

CFPB Issues Request for Information on Consumer Complaint Reporting

The Consumer Financial Protection Bureau today issued a Request for Information (RFI) about the Bureau's public reporting of consumer complaints. The Bureau is seeking comments and information from interested parties on the usefulness of complaint reporting and analysis, as well as specific suggestions or best practices for complaint reporting. This is the sixth in a series of RFIs announced as part of Acting Director Mick Mulvaney's call for evidence to ensure the Bureau is fulfilling its proper and appropriate functions to best protect consumers. This RFI will provide an opportunity for the public to submit feedback and suggest ways to improve outcomes for both consumers and covered entities. The next RFI in the series will address the Bureau's rulemaking processes and will be issued next week.
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INSOL International Buenos Aires One-Day Seminar on March 22 Open to ABI Members

ABI members are welcome to attend the INSOL International Buenos Aires One-Day Seminar to be held on March 22 at the Marval O'Farrell Mairal in Buenos Aires. Expert panels will be discussing the latest developments in Argentina, Brazil and the wider Latin American region. The seminar will benefit from simultaneous translation in English and Spanish. Topics include:

- Coordinating cross-border insolvencies: Should Argentina adopt the UNCITRAL Model Law?
- Significant potential changes in the Argentine and Brazilian insolvency laws
- Facilitating reorganization through financing companies in insolvency proceedings
- Lessons learned in cross-border insolvencies
- What claims should be given priority in insolvency proceedings?

Click here for more information and to register.

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New on ABI's Bankruptcy Blog Exchange: Can the Bankruptcy Code and Dodd-Frank Can Work Together?

A recent report from the agency settles a long-running debate about whether bankruptcy should replace Dodd-Frank's "orderly liquidation authority." The financial system needs both, according to a recent blog post.

Join thought leaders from academia and the bench, representatives from U.S. and European governmental agencies and private organizations on April 19 for a symposium to examine the policies, strategies & proposals erected in the 10 years since the Financial Crisis. Click here for more information and to register. 

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

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