The National Foundation for Credit Counseling's (NFCC) recent Financial Literacy Survey revealed that U.S. adults have a varied range of opinions and experiences when it comes to how they view student loan debt, according to an NFCC press release today. By a two-to-one margin, borrowers were more likely to say that their student loan was a good investment than a bad investment. At the same time, however, the survey revealed that more U.S. adults would not recommend student loans as a way to finance a college education compared to those who would recommend doing so. Some felt that if they had realized the amount of student loan debt that they would accumulate, they never would have taken out the loan(s). Read the release.
NFCC will be among the many organizations, experts, policymakers and consumers attending tomorrow's Student Loan Debt Symposium at Georgetown University Law Center to discuss the issues surrounding student loan debt and potential remedies. Among the speakers is Dr. Richard Vedder, a sharp critic of the declining value of an undergraduate degree. Register here and join the conversation tomorrow.
NORTH CAROLINA COULD BE FOURTH STATE TO PASS ASBESTOS TRANSPARENCY LAWS
North Carolina's state Senate is currently sitting on a bill that, if passed, would make the state the fourth in the nation to enact an asbestos bankruptcy trust transparency law, joining Wisconsin, Ohio and Oklahoma, LegalNewsline.com reported today. The North Carolina Commerce Protection Act of 2014 (Senate Bill 648) was introduced by senators Brent Jackson, Wesley Meredith and Jim Davis in April 2013 and currently sits in the state's Senate Judiciary Committee. According to a summary of the bill dated May 20, the bill aims to make changes to the statutes governing commerce within the state, including provisions that would create transparency in asbestos bankruptcy trusts and the amendment of laws relating to product liability actions. Section four of the bill intends to enforce transparency in asbestos trusts by requiring disclosures of all claims seeking a settlement against a debtor's bankruptcy trust. The bill is intended to minimize potentially damaging confidentiality and promote transparency. The bill would require plaintiffs to file a sworn statement with the court within 30 days after filing a claim -- or after the bill becomes effective for claims already filed -- identifying all other claims and potential claims against asbestos bankruptcy trusts. Read more.
The U.S. House of Representatives in November passed legislation (H.R. 982) to amend the Bankruptcy Code to require an asbestos trust to file detailed quarterly reports on claims paid.
MOODY'S: SERVICING FEES EAT UP WHAT'S LEFT AFTER FORECLOSURE
An increasing number of severely delinquent mortgages that were securitized during the boom years are sustaining losses that are greater than the loan's original principal balance, National Mortgage News reported today. In some cases, on loans that have been in foreclosure for three years or longer, losses are wiping out the cash flow that normally would get paid to investors in private-label residential mortgage-backed securities, according to a report from Moody's Investors Service. While a property is almost never worth nothing, servicing fees and advances of principal, interest, taxes and insurance payments by servicers to investors are increasingly exceeding the mortgage's outstanding balance, Moody's analysts have found. Such loss severities of 100 percent or greater will continue to occur, Moody's says, because of the lengthy timelines in judicial states where foreclosures are processed through the courts. Liquidations in which losses exceed 100 percent have been rising since mid-2012. Read more.
DOJ OPENED AT LEAST 15 PROBES INTO BANK PROCESSING ACTIVITIES
The U.S. Department of Justice has opened at least 15 civil and criminal investigations into whether banks and payment-processing firms helped enable fraudulent activity, the Wall Street Journal reported today. More than 850 pages of internal documents on the DOJ's probe of alleged fraud in the financial industry were obtained by the House Oversight and Government Reform Committee. The panel has been conducting an inquiry into the federal probe known as "Operation Choke Point," which is aimed at reducing the ability of fraudulent businesses to operate by going after financial firms -- like banks and payment processors -- that help move their money. The DOJ has also opened criminal investigations into four payment-processing firms, as well as one criminal investigation of a bank "and responsible bank officials." In January, the Justice Department reached a $1.2 million settlement with a small North Carolina bank, Four Oaks Fincorp Inc., over allegations that the bank processed more than $2 billion in transactions for a payment processor that worked with allegedly fraudulent merchants, including short-term lenders that operate from offshore. A federal judge approved the settlement in April. Read more. (Subscription required.)
NEW BANKRUPTCY FILING FEE INCREASES EFFECTIVE JUNE 1
The Judicial Conference of the United States has approved several bankruptcy-related fee increases to take effect starting June 1. Based on the chapter, the cost to file will be:
- Chapter 7: $335
- Chapter 13: $310
- Chapter 9, 11 and 15: $1,717
- Chapter 12: $275
The fee schedule changes are projected to raise about $35 million per year for the courts, based on current case loads. For more information, please click here.
NEW CASE SUMMARY ON VOLO: SCHEIDER, JR. V. DEUTSCHE BANK NATIONAL TRUST CO. (4TH CIR.)
Summarized by Suzanne Trowbridge of Goodwin & Goodwin LLP
The Fourth Circuit Court of Appeals affirmed the decision of the United States District Court for the District of South Carolina granting summary judgment in favor of the defendants. The plaintiffs filed suit in South Carolina state court and the defendants removed to the district court based on federal question jurisdiction. The district court granted summary judgment in favor of the defendants.
There are more than 1,300 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: IMPLICATIONS OF RECENT LIGHTSQUARED RULINGS ON CLAIMS TRADING
A recent blog post examined the implications of the recent rulings in the LightSquared case on the future of claims trading.
Be sure to check the site several times each day; any time a contributing blog posts a new story, a link to the story will appear on the top. If you have a blog that deals with bankruptcy, or know of a good blog that should be part of the Bankruptcy Exchange, please contact the ABI Web team.
ABI Quick Poll
Enforcing pari passu clauses in favor of holdout bondholders by injunction against Argentina will undermine sovereign debt restructurings (NML Capital, Ltd. v. Republic of Argentina).
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