Trump Waives Maritime Law for Puerto Rico, Easing Hurricane Aid Shipments
The Trump administration said today that it would temporarily waive a century-old shipping law for Puerto Rico that officials there said was hindering disaster-relief efforts after Hurricane Maria, the New York Times reported. The law, known as the Jones Act of 1920, requires goods shipped between points in the U.S. to be carried only by American flag vessels. Several members of Congress and Puerto Rico’s Governor on Monday asked the administration to temporarily waive the law, arguing that a waiver was needed to facilitate the delivery of food, medicine, clothing and other supplies to the island, which was devastated by Hurricane Maria. The decision to waive the act was made by Elaine Duke, the acting head of Homeland Security, and comes after Defense Secretary Jim Mattis determined that doing so would be in the interest of national defense, according to a Homeland Security spokesman. The waiver will be in effect for 10 days.
This year’s hurricane season has become one of the most destructive in recent memory. To provide assistance to those affected and direct others in how you can help, ABI encourages you to visit our Hurricane Relief webpage.
Commentary: How the Bankruptcy System Is Failing Black Americans
According to an analysis of consumer bankruptcy filings nationwide, the U.S. Bankruptcy Court for the Western District of Tennessee stood out, both for the stunning number of cases in which debtors were unable to get relief and for the reasons why, according to a ProPublica commentary yesterday. In Memphis, about three-quarters of filings are under chapter 13. As efficiently as cases are opened, they are closed — usually because debtors fail to keep up with payments, according to a ProPublica analysis of court data. In 2015, over 9,000 cases in the district were dismissed — more cases than were filed in 22 other states that year. Less than a third of chapter 13 cases in the district result in a discharge of debts. Scrutiny of Memphis is important, according to the commentary, because the racial differences found there are present across the country. Nationally, the odds of black debtors choosing chapter 13 instead of chapter 7 were more than twice as high as for white debtors with a similar financial profile. And once they chose chapter 13, the study found, the odds of their cases ending in dismissal — with no relief from their debts — were about 50 percent higher. Meanwhile, the $0-down style of chapter 13 bankruptcy practiced in Memphis, long common across the South, is quietly growing in popularity elsewhere. Chicago in particular has seen an explosion of chapter 13 filings in recent years. A recent study found that the “no money down” model is becoming more prevalent, prompting concerns that it is snaring increasing numbers of unsuspecting debtors and ultimately keeping them in debt.
Default Rate on Federal Student Loans Inches Up
Government records show that the number of people who are defaulting on their federal student debt is increasing, the Associated Press reported yesterday. The Education Department says more than 580,000 students who started repaying their debt in fiscal year 2014 defaulted on their loans by the fall of 2016. That puts the default rate at 11.5 percent. The figure was 11.3 percent for the previous year. Seven for-profit schools, two public institutions and one private institution with high default rates are at risk of losing access to federal student aid programs. High default rates are defined as 30 percent or greater over three consecutive years or 40 percent or greater for the latest year.
Toymakers Say 'Widespread Panic’ Following Toys ‘R’ Us Bankruptcy
Within hours of Toys “R” Us’s bankruptcy filing last week, the maker of Max Tow Truck and Animal Babies Nursery sounded a financial alarm of its own: Jakks Pacific, the company said, is expected to swing to a loss this year as a result of the mega-retailer’s bankruptcy, the Washington Post reported today. Toys “R” Us owes $14.06 million to Jakks, which last year posted a profit of $1.2 million, making the California-based toy supplier one of more than 100,000 creditors caught by the toy chain’s bankruptcy in the run-up to the all-important holiday season. In total, Toys “R” Us owes $7.5 billion to a group that includes virtually every major toymaker in the country: Mattel (owed $136 million), Hasbro ($59 million), Spin Master ($33 million), Lego ($32 million), Radio Flyer ($12 million) and Crayola ($2.6 million). As toymakers and suppliers decide what to do next, many say that they are likely to lose millions of dollars as a result of the bankruptcy, sending a ripple of financial troubles throughout the toy industry.
Next Consumer Commission Open Meeting to Take Place Oct. 10 at NCBJ
The ABI Commission on Consumer Bankruptcy will hold a public meeting of the Committee on Case Administration & the Estate during the annual conference for the National Conference of Bankruptcy Judges (NCBJ). The meeting will be October 10, 2017, from 10:45 AM – 1:00 PM PDT in the Paris Las Vegas Hotel, Versailles rooms 1-2. Conference attendees have the opportunity to make a statement with suggested reform of the consumer bankruptcy system. To find out how to participate at the open meeting, please click here.
To access the list of topics under consideration by the Commission’s committees and previous hearing statements, please click here.
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New on ABI’s Bankruptcy Blog Exchange: CFPB Survey Finds 40 Percent of Americans Struggle to Pay Bills
The Consumer Financial Protection Bureau's first "National Financial Well-Being Survey" found that a large slice of consumers experience financial hardship, according to a recent blog post.
To read more on this blog and all others on the ABI Blog Exchange, please click here.
