Extreme Weather Is Hitting Americans in the Wallet​​​

Extreme weather is pressuring local budgets, sticking Americans with the bill and putting the $4 trillion market for state and local bonds at the center of the climate-change fight, the Wall Street Journal reported. Clyde, Texas, will likely face increased borrowing costs after the city defaulted on debt last month during a drought. Higher parking fees at the beach in Naples, Fla., are helping repay bonds sold to rebuild the city’s hurricane-damaged pier. Residents of Texas, Louisiana and Oklahoma will spend the next two decades chipping away at the multibillion-dollar cost of maintaining power during a 2021 winter storm. “We’ll be paying off the bond for the four days of electricity for years to come,” said Georgetown, Texas, Mayor Josh Schroeder. The market for municipal bonds has become a testing ground for the increasing demands that heat, water and wind are putting on local communities. Investors fret that volatile, damaging weather patterns in coming years will punish critical infrastructure and imperil the nation’s roads and bridges, sewers and energy grids, coasts and forestlands. Clyde is the latest U.S. city to suffer a climate-related default. In December, a Paradise, Calif., city agency missed payments on bonds issued in better days, before a downed power line in a drought-ravaged forest sparked the huge 2018 campfire. In November, Californians will vote on whether to borrow $10 billion to address issues such as rising sea levels and forest fires. The U.S. Senate Budget Committee held a hearing earlier this year titled “Safeguarding Municipal Bonds from Climate Risk.” Worldwide, climate shifts are expected to lead to tens of trillions of dollars in new debt issuance by 2030, according to a report Wednesday by the Institute of International Finance, a global trade group. Muni bondholders are paying attention. Bond-research firms have been paying up for data pinpointing which communities are most likely to experience climate disaster. So far, bondholders aren’t demanding higher interest rates from communities more vulnerable to climate change, according to a 2022 study. But that could change in the next five to 10 years as private and state insurers and federal aid are stretched thin, according to the study’s author, Breckinridge credit analyst Erika Smull. Read more.

Subchapter V Experiences to Share? ABI Wants to Hear from You!

ABI is continuing its study of Subchapter V, and it needs your help! We are particularly interested in learning more about the real-world impact of Subchapter V. So our question is, do you have a story about a distressed business or creditor who has used or benefited from the subchapter? If so, could that case still happen under the lower debt cap for Subchapter V debtors? Any and all responses are welcome. Submit your story at https://abi.org/subvstories.
 

CFPB Report Highlights Challenges Facing Servicemembers and Veterans with Student Loans​​​

The Consumer Financial Protection Bureau (CFPB) on Tuesday released its annual report on the top financial concerns facing servicemembers, veterans and military families. The report finds that active duty and veteran students are encountering many financial challenges, including difficulties getting help from student loan servicers and transcript withholdings by colleges and universities as a means to collect a debt or disputed fees. The report also identifies problems experienced by the military community with other financial products, such as an increase in reports of scams targeting older veterans. “Servicemembers who have worked hard to get an education while serving our country should not face additional obstacles that cause financial strain or put career opportunities at risk,” said CFPB Director Rohit Chopra. “The CFPB is committed to supporting and protecting the financial well-being of servicemembers, veterans, and their families.” Servicemembers, veterans, and their families have submitted more than 407,000 consumer complaints since the CFPB opened its doors in 2011. In 2023, they submitted nearly 84,600 complaints to the CFPB, a 27 percent increase from 2022 and a 98 percent increase from 2021. The number of complaints filed by servicemembers increased across all major consumer financial products, including credit or consumer reporting, debt collection, credit cards, checking or savings accounts, and mortgages. Click here to read the full report.

Shoppers Projected to Spend a Record $241 Billion Online this Holiday Season​​​

Consumers plan to open their wallets this holiday season, snapping up discounts on electronics, apparel and sporting goods, breaking online sales records in the process, the Washington Post reported. Americans are projected to spend $240.8 billion online from Nov. 1 through the end of the year, 8.4 percent over last year, according to a report released Wednesday by Adobe Analytics. More than half will do their shopping on their phones. The record-breaking figures signal that consumers will power through the most significant shopping season of the year. Savvy spending, along with wage growth and a still-strong job market, are giving shoppers the “confidence and ability to increase their spending,” said John Mercer, head of global research at Coresight Research. Both Coresight and Moody’s project that total retail sales, in person and online, will grow around 3 percent during the last three months of the year, roughly on par with last year. The projections come as consumers continue to be choosy about how they spend in discretionary categories. Retail sales have remained fairly steady, with August numbers increasing by 0.1 percent from July and by 2 percent over last year, while dipping for electronics and appliances, as well as furniture and apparel. Many of those categories should see some uptick during the holidays, according to Adobe, which sees more than half of online sales driven by electronics, apparel, furniture and home goods. And while the past four years have seen consumers trading down in some of these categories, steep discounts this year will persuade value-focused shoppers to flip the switch and trade up, said Taylor Schreiner, a senior director at Adobe Digital Insights. Read more.

Justice Department Pushes Companies to Consider AI Risks​​​

Compliance officers should now add artificial intelligence to the list of things they need to worry about, the Justice Department says, the Wall Street Journal reported. The department this week announced changes to guidance prosecutors use to assess a company’s compliance program when it comes under investigation for bribery, fraud or other criminal offenses. The guidance, known as the DOJ’s Evaluation of Corporate Compliance Programs, is an important document for lawyers and compliance officers. Officials say companies with good compliance programs — along the lines described in the guidelines — are eligible for more lenient treatment if a compliance breakdown occurs. Besides AI, the guidance revisions address how companies should handle whistleblowers, and how they should incorporate data and lessons learned from prior misconduct, within their business and at others. Nicole Argentieri, the head of the Justice Department’s criminal division, announced the changes Monday at a compliance conference in Texas. The changes expand upon the idea that companies should constantly assess risks, learn from compliance slip-ups and adapt their compliance programs as needed. “The government is trying to push for more quality over just ticking the boxes,” said Steve Solow, a former federal prosecutor who advises on compliance. “What they are really focusing on now is compliance performance.” Read more. (Subscription required.)

U.S. Economy Grew at a Solid 3% Rate Last Quarter, Government Says in Final Estimate​​​

The American economy expanded at a healthy 3% annual pace from April through June, boosted by strong consumer spending and business investment, the government said Thursday, leaving its previous estimate unchanged, the Associated Press reported. The Commerce Department reported that the nation’s gross domestic product — the nation’s total output of goods and services — picked up sharply in the second quarter from the tepid 1.6% annual rate in the first three months of the year. Consumer spending, the primary driver of the economy, grew last quarter at a 2.8% pace, down slightly from the 2.9% rate the government had previously estimated. Business investment was also solid: It increased at a vigorous 8.3% annual pace last quarter, led by a 9.8% rise in investment in equipment. The third and final GDP estimate for the April-June quarter included figures showing that inflation continues to ease, to just above the Federal Reserve’s 2% target. The central bank’s favored inflation gauge — the personal consumption expenditures index, or PCE — rose at a 2.5% annual rate last quarter, down from 3.4% in the first quarter of the year. Excluding volatile food and energy prices, so-called core PCE inflation grew at a 2.8% pace, down from 3.7% from January through March. The U.S. economy, the world’s biggest, displayed remarkable resilience in the face of the 11 interest rate hikes the Fed carried out in 2022 and 2023 to fight the worst bout of inflation in four decades. Still, the job market has shown signs of weakness in recent months. From June through August, America’s employers added an average of just 116,000 jobs a month, the lowest three-month average since mid-2020, when the COVID-19 pandemic had paralyzed the economy. The unemployment rate has ticked up from a half-century low 3.4% last year to 4.2%, still relatively low. Read more.

Second Circuit Accepting Applications for E.D.N.Y. Bankruptcy Judgeship​​​

The U.S. Court of Appeals for the Second Circuit invites applications from qualified candidates for a 14-year appointment as U.S. Bankruptcy Judge for the Eastern District of New York. For more information, please click here.​​​​​​

Virtual Option Available for Tomorrow's Bankruptcy 2024: Views from the Bench Program!​​​​​​

Don't miss hearing the views of 20 sitting and retired bankruptcy judges at tomorrow's Bankruptcy 2024: Views from the Bench program. Panels will examine key issues surrounding bankruptcy confirmation, Supreme Court cases, real estate in bankruptcy, ethics and much more. The luncheon will provide a judicial perspective on resolving crypto issues in bankruptcy. Views from the Bench will also feature ABI’s popular “Great Debates” session, during which judges and experts will square off on issues related to bankruptcy examiners. Attendees have the chance to earn up to 6/7.2 hours of CLE/CPE credit and 1 hour of ethics. Register today!

Access All Current ABI Titles Through ABI’s New Digital Book Subscription!​​​

One of the best collections of bankruptcy books is now available as an annual digital subscription! ABI’s bankruptcy library opens the door to a constantly evolving area of the law, and our books are continually being updated by top industry professionals. Auto-renewing annual subscriptions guarantee immediate access to this invaluable resource, which is comprised of fully searchable content that’s always available on any digital device. Convenient pricing plans for individual and institutional subscribers offer immediate and unlimited access to our entire digital library of books — nearly 100 treatises! Plus, you get advanced access to new and revised books as soon as they are published — all included in your annual subscription. Learn more!

Have an Idea for a Topic for an ABI Conference Session? Submit Your Proposal via ABI’s “Call for Abstracts” Page!​​​

ABI has launched an online portal for professionals to submit proposals for educational sessions at future ABI conferences. Submitters can describe their proposed topic, outline the session’s focus and learning goals, suggest speakers, and provide contact information via the portal’s detailed form. The portal can be accessed here.

All submissions will be reviewed by an internal Education Committee, which will contact the submitter to ask questions as needed and to discuss the status of the proposal. Submissions will be reviewed on a rolling basis.

Sign up Today to Receive Rochelle’s Daily Wire by E-mail!
Have you signed up for Rochelle’s Daily Wire in the ABI Newsroom? Receive Bill Rochelle’s exclusive perspectives and analyses of important case decisions via e-mail!

Tap into Rochelle’s Daily Wire via the ABI Newsroom and 'X' (Formerly known as Twitter)!