Fewer Banks Are Tightening Lending Standards, Raising Hopes for Easier Loan Access Ahead​​​

Fewer banks tightened lending standards as 2023 came to a close, a hopeful sign for businesses that broader loan access is on the horizon, the Associated Press reported. Lending standards are essentially the measures used by a bank to determine whether a business or person gets a loan. Tighter standards, such as stronger credit and collateral requirements for applicants, tracked the Federal Reserve’s historic rate hikes starting in 2022. Those rate increases have successfully cooled inflation without knocking the economy into recession. Wall Street is now betting the Fed could start lowering rates by the middle of the year, and banks are showing signs of relief. A January survey from the Federal Reserve showed that the share of banks who tightened lending standards for commercial and industrial loans fell to 14.8% in the fourth quarter. That’s down from 33.9% in the third quarter and a significant drop from 50.8% in the second quarter of 2023. The survey showed a similar pattern for consumer loans and credit cards, though at a softer pace. Overall, bank loans to businesses stagnated in 2023 after steadily rising in 2022. Read more.

Crypto Leverage Is Roaring Back, Fueling Latest Bitcoin Surge​​​

After a dry spell of several years, leverage is roaring back into crypto — helping to fuel a new bull run in Bitcoin and a fresh wave of worries, Bloomberg News reported. The largest cryptocurrency jumped as much as 13% to $63,968 on Wednesday, the biggest intraday rise since last March, before paring the increase by more than half. It was the fifth consecutive day of progressively higher prices, spurred in part by optimism over inflows into exchange-traded funds approved last month. Leverage is seeping back into nearly all corners of the market, including NFTs, mining, decentralized finance apps and derivatives trading on mainstream exchanges. Aggregate open interest on Bitcoin derivatives — which can be leveraged up to 100 times — on centralized exchanges has risen nearly 90% since October, the highest level since the beginning of 2022, when the last crypto bull run collapsed, according to CCData. Crypto exchanges Binance, OKX and Bybit have all seen their open interest rise to levels not seen since the peak of the 2021 bull market, per CCData. Read more.

Applications for Jobless Benefits Rise but Remain Historically Low Despite Recent Layoffs​​​

More Americans applied for jobless benefits last week, but layoffs remain historically low even as more high-profile companies have announced job cuts this year, the Associated Press reported. Applications for unemployment benefits rose by 13,000 to 215,000 for the week ending Feb. 24, the Labor Department reported Thursday. Last week’s number was revised up by 1,000 to 202,000. In total, 1.9 million Americans were collecting jobless benefits during the week that ended Feb. 17, up 45,000 from the previous week and the most since November. The four-week average of claims, a less volatile measure, fell by 3,000 to 212,500 from the previous week. The unemployment rate is 3.7% and has been below 4% for 24 straight months, the longest such streak since the 1960s. Though layoffs remain at low levels, there has been an uptick in job cuts recently, mostly across technology and media. Google parent company Alphabet, eBay, TikTok, Snap and Cisco Systems and the Los Angeles Times have all recently announced layoffs. Outside of tech and media, UPS, Macy’s and Levi’s also recently cut jobs. Read more.

CFPB Issues Guidance to Rein in Rigged Comparison-Shopping Results for Credit Cards and Other Financial Products​​​

The Consumer Financial Protection Bureau (CFPB) today issued a circular to law enforcement agencies and regulators explaining how companies operating comparison-shopping tools can break the law when they steer consumers toward certain products or lenders because of kickbacks. Consumers use comparison-shopping tools to evaluate the costs, features and terms of many financial products, including credit cards, loans and bank accounts. However, consumers often encounter manipulated results or digital dark patterns, fueled by behind-the-scenes incentive payments from lenders. The circular explains how these practices may violate federal law and highlights examples of illegal arrangements. “Americans turn to online comparison tools to find the credit card with the lowest interest rates or best rewards,” said CFPB Director Rohit Chopra. “The CFPB is working to ensure that digital advertisements for financial products are not disguised as unbiased and objective advice.” Digital comparison-shopping tools are widely used in many product categories, from retail goods to travel and financial products. The CFPB said that operators of comparison-shopping tools may deceive consumers with user experiences and user interfaces that lead people to believe they are the beneficiaries of competition. However, if consumers are being tricked into paying higher prices or selecting inferior products, the comparison-shopping company and the company paying to play may be the only ones benefiting from the façade of competition. Read more.

New Aid Programs Help Medical Students Graduate with Less Debt​​​

When the Albert Einstein College of Medicine announced earlier this week that it would go tuition-free thanks to a $1 billion donation, it joined a growing movement to sharply reduce the financial barriers that can deter aspiring doctors. Medical schools around the country — and especially in pricey New York City — are using scholarships to try to establish a more diverse population of health care workers and allow them the financial freedom to consider jobs in crucial, but often lower-paying, fields like pediatrics and internal medicine, the Wall Street Journal reported. Some, like the medical school at New York University, are taking the free-tuition-for-all approach. Others, such as the medical school of Columbia University, award scholarships specifically for students who demonstrate financial need. The programs, backed by hundreds of millions of dollars in donations, have led to jumps in applications at several of the schools. School officials say they show promise in attracting more students from underrepresented backgrounds, but critics warn that their reach is limited given how selective most of the participating institutions are and how heavily some weigh standardized tests in admissions. The price tag for a year of medical school can top $100,000 in some places, including living expenses, and most programs run for four years. Even after generous scholarships, the schools say the financial aid doesn’t yet extend far enough. “Our goal is absolutely to go debt-free” for all students, said Katrina Armstrong, dean of Columbia’s Vagelos College of Physicians and Surgeons. (Subscription required.) Read more.

Congratulations to the Winners of the Regional Moot Court Competitions; National Duberstein Competition Coming Up This Weekend in New York!​​​

ABI congratulates the winning teams of each of the regional moot court competitions that were held around the country on Feb. 19 in preparation for the 32nd Annual Duberstein Moot Court Competition, being held March 2-4 in New York City. The results of these regional moot court competitions and their respective winning teams are as follows:

Midwest Regional Moot Court (hosted by ABI and the American College of Bankruptcy)
Winning Team: Northwestern University Pritzker School of Law

Third, Fourth and DC Circuits’ Regional Moot Court (hosted by ABI and the American College of Bankruptcy)
Winning Team: University of Maryland Francis King Carey School of Law

5th Circuit Elliott Cup Moot Court Competition
Winning Team: University of Texas School of Law

ABI Shapero Cup Regional Moot Court
Winning Team: University of Memphis Cecil C. Humphreys School of Law

Eleventh Circuit Cristol Kahn Paskay Cup Moot Court Competition
Winning Team: Florida International University College of Law

The national Duberstein Moot Court Competition will feature 52 student teams, representing law schools from across the country, arguing in at least two preliminary rounds on alternating sides, with 16 teams advancing beyond the preliminary rounds. Bankruptcy practitioners judge the preliminary rounds and briefs, and leading appellate and bankruptcy judges preside over the advanced rounds. The competition concludes on Monday with competitors, judges and top practitioners networking at the Duberstein Bankruptcy Moot Court Gala and Awards Presentation at the New York Marriott Downtown. There is still time to register to attend the Gala and Awards Presentation. 

ABI Diversity Mentoring Program Accepting Applications for New Mentees Through March 5

ABI's Diversity and Inclusion Mentoring Program (June 2024 – June 2025) seeks to build personal and professional relationships while promoting diversity and leadership within ABI. The goal of the Mentoring Program is to expose mentees to the many aspects of the restructuring profession, including becoming involved in ABI and interacting with mentors’ colleagues, peers and networks. Guided by the DWG Mentoring Subcommittee, there will be bi-monthly meetings or programming to address a variety of topics, with resources from ABI and members of the restructuring community, including judges, trustees, attorneys and financial professionals. These structured events will occur between April 2024 – June 2025 and will provide opportunities to interact with other experienced insolvency professionals while providing an educational program and fostering opportunities to discuss important topics in the mentees’ professional development. For more information, including eligibility requirements and how to apply, please click here.

Asset Sale of the Year Award Nominations Deadline Extended to March 18

ABI’s Asset Sales Committee is seeking nominations for its Annual ABI Asset Sale of the Year award. Any bankruptcy sale that closed between January 1 and December 31, 2023, and involved at least one professional who is a member of ABI’s Asset Sales Committee is eligible. The nomination deadline has been extended to March 18; please send your nominations to Matt LoCascio and Leyza Blanco. For more information, please click here.

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, who 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, although please note that abstracts to be considered for the upcoming Annual Spring Meeting, being held April 18-20, 2024, at the Marriott Marquis in Washington, D.C., were due on December 31, 2023. 

Bankruptcy Judgeship Vacancy Announcement for the District of New Jersey

Chief Judge Michael A. Chagares of the U.S. Court of Appeals for the Third Circuit on Monday announced the application process for a bankruptcy judgeship in the District of New Jersey, seated in Trenton. For eligibility and qualifications, please click here to access the full announcement. Applications must be submitted electronically by noon on March 6, 2024.
 

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