U.S. MORTGAGE, CREDIT CARD DELINQUENCY RATES DECLINE
TransUnion Corp. reported today that the delinquency rates for mortgages and credit cards declined during the second quarter, and the firm predicts mortgage-delinquency rates will maintain their downward trajectory for the remainder of 2012, according to Dow Jones Newswires. The national mortgage delinquency rate--or the rate of borrowers at least 60 days past due--dropped for the second consecutive quarter, to 5.49 percent from the 5.78 percent mortgage delinquency rate in the first quarter. Between the first and second quarters of 2012, all but five states experienced decreases in their mortgage-delinquency rates, and 76 percent of metropolitan areas saw improvement in their mortgage-delinquency rates during the second quarter. Meanwhile, the national credit card delinquency rate--or the ratio of borrowers at least 90 days past due--dropped to 0.63 percent in the second quarter from 0.73 percent in the previous quarter. The credit card delinquency rate is at its lowest level since reaching 0.6 percent a year earlier. Read more.
COMMENTARY: THE GOVERNMENT SHOULD LOOK TO MASS MORTGAGE REFINANCING
With principal writedown no longer an option, the government needs to find a new way to facilitate mass mortgage refinancings, according to a commentary in today's New York Times by Prof. Joseph E. Stiglitz of Columbia University and Mark Zandi of Moody's Analytics. Refinancing at the current low rates would allow homeowners to significantly reduce their monthly payments, and a mass refinancing program would work like a potent tax cut. Refinancing would also significantly reduce the chance of default for underwater homeowners, according to the commentary. With fewer losses from past loans burdening their balance sheets, lenders could make more new loans, and communities plagued by mass foreclosures might see relief from blight. Read the full commentary.
DURBIN SEES VISA ACCORD THWARTING PUSH TO CAP CREDIT CARD FEES
Senator Richard Durbin (D-Ill.)'s office told retailers that their efforts to have Congress rein in credit card swipe fees would be imperiled if they support a $6.6 billion antitrust settlement with Visa Inc. and MasterCard Inc., Bloomberg News reported yesterday. "This is going to foreclose the prospect of good legislation for the foreseeable future," Dan Swanson, senior judiciary counsel for Durbin, said in a conference call with the Food Marketing Institute. Durbin, the Senate Majority Whip, won the inclusion of limits on debit-card swipe fees, or interchange, in the 2010 Dodd-Frank Act. That trimmed annual revenue for the biggest U.S. banks by about $8 billion and benefited retailers including Wal-Mart Stores Inc. and Target Corp. Credit-card swipe fees are higher and generate about $40 billion a year for lenders such as JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. The Food Marketing Institute, a trade group whose members include Target, Sears Holdings Corp. and Wal-Mart, does not have a position on the settlement. Visa, MasterCard and banks agreed last month to resolve the seven-year-old case, one of the largest class actions in history. The deal, which requires the approval of U.S. District Judge John Gleeson in Brooklyn, N.Y., may be nullified if enough merchants refuse to join the proposed class action. Read more.
MUNICIPAL BOND RULE MIRED IN LEGISLATIVE LIMBO
A provision of the Dodd-Frank Act that would require municipal bond advisers to put the interests of taxpayers first has been bogged down in a rule-making quagmire in Washington, D.C., the New York Times reported today. As part of the wide-ranging regulatory changes that followed the financial crisis of 2008, the Dodd-Frank Act included a provision that would make municipal advisers "fiduciaries," meaning they must put local residents’ interests ahead of their own. Making advisers fiduciaries would be “the first time in the history of the securities laws that issuers of the securities have been protected,” said Robert W. Doty, president of AGFS, a consulting firm in Sacramento. He is a registered municipal adviser and favors the fiduciary mandate. But before that provision can take effect, the law calls for the Securities and Exchange Commission to define "municipal adviser." The SEC proposed a definition 20 months ago, but it was swiftly beaten back by the banking, brokerage and engineering industries, among others. Opponents argued that the SEC was overreaching and that they were already regulated and should not be given a new mandate. Additionally, Rep. Robert J. Dold (R-Ill.) introduced a bill last year that would eliminate the measure. Read more.
ANALYSIS: HARD TIMES SPREAD FOR CITIES
Fiscal woes that have caused high-profile bankruptcies in California are surfacing across the country as municipalities struggle with uneven growth and escalating health and pension costs following the worst recession since the 1930s, the Wall Street Journal reported today. Budget crunches already have prompted Michigan lawmakers to authorize emergency fiscal managers, and led the mayor of Scranton, Pa., to temporarily cut the pay of all city workers to the minimum wage. In a majority of the nation's 19,000 municipalities—urban and rural, big and small—stagnant property tax revenues, diminish aid from states and rising costs are forcing less dramatic but still difficult steps. Moody's Investors Service recently said that while municipal bankruptcies are likely to remain rare, it warned of a "a small but growing trend in fiscally troubled cities unwilling to pay their debt obligations." Read more. (Subscription required.)
ABI MEMBERS WELCOME TO ATTEND ACB'S FREE HALF-DAY "BANKRUPTCY: BACK TO THE FUTURE" PROGRAM IN SEPTEMBER
The American College of Bankruptcy invites you to attend a free half-day program on Sept. 28 in Chicago for a discussion of many of the challenging topics facing current bankruptcy and reorganization professionals. Topics to be addressed include recent decisions of the U.S. Supreme Court and Court of Appeals, important work of the Advisory Committee on Bankruptcy Rules, and developments in the field of bankruptcy ethics. The nation’s leading judges, academics and bankruptcy professionals are among the speakers for the program. While there is no cost to attend, seating is limited, so early reservation is suggested. For more information and to register, please click here.
LATEST CASE SUMMARY ON VOLO: FIRST PREMIER CAPITAL LLC V. REPUBLIC BANK OF CHICAGO (IN RE EQUIPMENT ACQUISITION RESOURCES; 7TH CIR.)
Summarized by Allen Guon of Shaw Gussis Fishman Glantz Wolfson & Towbin LLC
Seventh Circuit Court of Appeals affirmed the district court's ruling, which affirmed the bankruptcy court's ruling, that the granting of the settlement motion was not an abuse of discretion.
There are 600 appellate opinions summarized on Volo typically 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: FIFTH CIRCUIT HOLDS STATE AGENCY PROCEEDINGS EXEMPT FROM AUTOMATIC STAY
The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent post examines the Fifth Circuit’s ruling on June 18 in Halo Wireless, Inc. v. Alenco Communications, Inc., et al., affirming a bankruptcy court order that various state public utility commission proceedings initiated against Halo could proceed despite Halo’s subsequent chapter 11 bankruptcy.
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 The Twombly/Iqbal rule for pleading ‘plausible’ claims has been applied too stringently in dismissing avoidance actions for failure to state a claim.
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