Supreme Court Upholds Funding Structure for CFPB​​​

The U.S. Supreme Court today upheld the manner in which the Consumer Financial Protection Bureau is funded, NPR.org reported. The opinion was written by Justice Clarence Thomas, who reversed the decision of the Fifth Circuit. Justices Neil Gorsuch and Samuel Alito dissented. Congress created the CFPB after the 2008 financial crash to protect consumers from what were seen as predatory and deceptive practices by financial institutions. Since then, the bureau has established consumer protections for transactions ranging from mortgages to credit cards. Last year, the U.S. Court of Appeals for the Fifth Circuit ruled that the CFPB's structure is unconstitutional because, instead of an annual congressional appropriation, Congress set the agency's funding at a capped amount that comes from banking fees paid to the Federal Reserve System. The government appealed to the Supreme Court because many other agencies are similarly funded, including the Federal Reserve itself; the FDIC, which insures bank deposits; the Office of the Comptroller of the Currency, which charters and regulates all national banks; and potentially even Social Security and Medicare, which are funded by a specific tax. Read more.

Click here to read the opinion.
 

Analysis: As Insurers Around the U.S. Bleed Cash from Climate Shocks, Homeowners Lose​​​

Relatively consistent weather once made Iowa a good bet for insurance companies. But now, as a warming planet makes events like hail and wind storms worse, insurers are fleeing, the New York Times reported. The insurance turmoil caused by climate change — which had been concentrated in Florida, California and Louisiana — is fast becoming a contagion, spreading to states like Iowa, Arkansas, Ohio, Utah and Washington. Even in the Northeast, where homeowners insurance was still generally profitable last year, the trends are worsening. In 2023, insurers lost money on homeowners coverage in 18 states, more than a third of the country. That’s up from 12 states five years ago and eight states in 2013. The result is that insurance companies are raising premiums by as much as 50 percent or more, cutting back on coverage or leaving entire states altogether. Nationally, over the last decade, insurers paid out more in claims than they received in premiums, according to ratings firm Moody’s, and those losses are increasing. The growing tumult is affecting people whose homes have never been damaged and who have dutifully paid their premiums year after year. Cancellation notices have left them scrambling to find coverage to protect what is often their single biggest investment. As a last resort, many are ending up in high-risk insurance pools created by states that are backed by the public and offer less coverage than standard policies. By and large, state regulators lack strategies to restore stability to the market. Read more.

U.S. Weekly Jobless Claims Drop Back After New York School Break Ends​​​

Initial applications for U.S. unemployment benefits fell last week, after seasonal factors caused a significant increase in New York claims in the prior week, Bloomberg News reported. Initial claims decreased by 10,000 to 222,000 in the week ended May 11, according to Labor Department data released Thursday. Claims in New York dropped after surging the previous week while New York City public schools were on spring break. Some workers such as bus drivers are allowed to apply for benefits during school breaks, which tends to make weekly data volatile during and after recess. Continuing claims, a proxy for the number of people receiving unemployment benefits, rose to 1.79 million in the week ended May 4. Read more.

Analysis: Housing Costs Still Push Inflation Higher, but Are Rising at Slowest Annual Rate in Two Years​​​

Housing costs remained elevated in April, serving as the largest contributor to core inflation's rise last month, but there remain signs that prices are starting to moderate, YahooFinance.com reported. The shelter component of the Consumer Price Index, which is mostly made up of rent and homeowners' equivalent rent (OER), rose 0.4% in April, matching March's monthly gain, according to data from the Bureau of Labor Statistics released yesterday. Shelter costs rose 5.5% over the prior year, the slowest annual increase since June 2022 and down from a peak of 8.2% reached in March of last year. Shelter costs accounted for over two-thirds of the annual increase in "core" inflation, which excludes food and energy prices. Shelter and gas prices accounted for 70% of the rise in headline inflation, which includes all categories, according to the BLS. Read more.

Prof. Kevin Kaiser Provides His Take on the Intersection of Private Equity and Restructuring on Latest "Unordinary Course" Podcast​​​

Prof. Kevin Kaiser of the University of Pennsylvania's Wharton School of Business joins host Lee Pacchia of ICR on the latest edition of "Unordinary Course" to take a closer look at the intersection of private equity and restructuring, and the recent spike in private-equity-backed companies filing for chapter 11. Click here to listen.

Three Webinars Next Week to Explore Hot Topics in Subchapter V, Provide Real Estate Outlook and Examine Boy Scouts of America's Chapter 11​​​

Leading experts will be participating in three key webinars next week:

- May 21: The next installment of the NCBJ/ABI "Behind the Bench" webinar series will explore five hot topics within subchapter V. Complimentary registration.

- May 22: ABI's Real Estate Committee will host a commercial real estate economic outlook presentation featuring Martin Lavelle, senior business economist with the Federal Reserve Bank of Chicago, to provide important market intelligence. Lavelle’s research topics include construction and real estate, consumer spending, rural economic development and more. Complimentary registration.

- May 23: The second program in ABI's Strategies and Perspectives webinar series will discuss the Boy Scouts of America chapter 11, a case that demonstrates the complexity and confluence of differing stakeholder positions. Experts will discuss the intricacies of this case, including the goals of the debtor, the large group of plaintiffs and the insurers. Complimentary registration.

Pick Up Your Copy of Driving the Recovery Bus​​​

Make sure to pick up your copy of Driving the Recovery Bus: Augmenting Creditor Recoveries Through Claims Brought by a Litigation Trustee, written by Gordon Z. Novod. The book is not only for litigation trustees, but also for creditors who serve on official committees of unsecured creditors, attorneys and other professionals who frequently represent official committees of unsecured creditors, and others with a general interest in pursuit of causes of action by litigation trustees. Get your copy of Driving the Recovery Bus.

Application and Nomination Period for ABI’s 2024 “40 Under 40” Class Open Through June 30 ​​​

The ABI "40 Under 40" annual program continues to highlight the best up-and-comers in the industry. If you are, or know of, a dynamic insolvency professional who is committed to growth and excellence both professionally and in your community, this is one opportunity not to be missed! Nominations and applications are due June 30. Click here for more information and to submit a nomination or application. 

Get Your Copy of The Purdue Papers to access Amicus Briefs and Commentaries Related to Purdue Pharma Case!​​​

A petition by the U.S. Trustee regarding the case of Purdue Pharma L.P. is currently being considered by the U.S. Supreme Court. Regardless of how the Court rules, the case has already generated a mountain of commentary in the form of amicus briefs, petitions and other related background material. ABI, guided by editor David R. Kuney (who represented one group of amicus filers), has gathered together all of this material in a fully searchable form — more than 3,000 pages worth! This collection will be updated with the final Supreme Court decision — expected later in 2024 — as well as a final commentary by ABI Editor-at-Large Bill Rochelle, who writes Rochelle’s Daily Wire. This collection is an invaluable resource for anyone working in the area of third-party releases, either as a practitioner, an academic or just an interested party. Get your digital copy for only $25!

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.

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