Supreme Court Weighs Immunity of Puerto Rico Oversight Board​​​

The Supreme Court grappled yesterday with whether a government board created by Congress to oversee Puerto Rico's debt has the same protections from certain lawsuits that states have, Roll Call reported. And some justices at the oral arguments sounded hesitant about whether the Supreme Court should even decide that in this case, one of several in recent years about legal clashes over the financially troubled territory. This latest case stems from a civil lawsuit from an investigative news outlet that seeks documents held by the Financial Oversight and Management Board for Puerto Rico, which Congress created in response to Puerto Rico’s debt crisis in 2016. The U.S. Court of Appeals for the First Circuit ruled in May that the board could still face suit over a Puerto Rico public records law, while the board contends it should be treated similarly to states and have immunity from such lawsuits. A significant portion of the wide-ranging arguments touched on that issue and the power of Congress in this situation, but Justice Neil M. Gorsuch and others also questioned whether the Supreme Court should settle the question of the territory’s immunity in the case. “We don't have Puerto Rico before us, we have this board that may expire and was a creation of Congress. We don't have the other territories before us, as well,” Gorsuch said. The Puerto Rico board, represented by Mark D. Harris, argued that Congress never intended to allow the board to face a broad range of lawsuits. He urged the justices to find that Congress in the law never made a “clear statement” that the board can be sued, as lawmakers would have to do if the law was about a state entity. Read more. 

Student Loan Repayment Pause Helped Young People ‘Participate in the Recent Housing Boom’​​​

A recently released report found that the ongoing student loan payment pause enacted first during the coronavirus pandemic boosted homeownership rates among young Americans, MarketWatch.com reported. Student loan repayments have been paused since the pandemic first started spreading in March 2020. The report by Jain Family Institute, a New-York based research organization, found that the pause in monthly repayments allowed borrowers to budget more toward buying a home. “Benefiting from the student loan repayment pause, which has eased debt burdens for many, young borrowers were able to participate in the recent housing boom,” the report stated. The authors of the report used anonymized data from Experian Credit Solutions of 1 million debtors’ information for each year. The rate of homeownership of Americans aged between 18 and 35 years of age was 17.8% in 2020. After the payment pause kicked into effect that year, homeownership in this demographic increased to 18.5% in 2021, the report found, and to 18.9% in 2022. Read more. 

Commentary: Clawback to the Future: Avoidance Actions in Crypto Bankruptcies*​​​

When the history books are written, it may be said that the biggest event to shake the crypto world was not the crypto bankruptcies of 2022, but rather the clawback of billions of dollars in crypto value in those bankruptcies, according to a Reuters commentary. Since summer 2022, five major crypto companies have filed bankruptcy: a hedge fund (Three Arrows Capital), two lenders (Celsius and BlockFi), a broker (Voyager) and an exchange (FTX). It is reasonable to next expect a wave of lawsuits seeking to claw back crypto transfers made to customers and investors prior to the bankruptcies, according to the commentary. When that happens, courts will need to synthesize existing law with modern finance, likely creating new law in the process. Read the full commentary.

*The views expressed in this commentary are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI.

The intersection of cryptocurrency and bankruptcy is one of the key issues to be discussed by expert panels at ABI's upcoming Rocky Mountain Bankruptcy Conference Jan. 26-27 in Salt Lake City. Are you registered?

U.S. Inflation Slowed for Sixth Straight Month in December​​​

U.S. inflation eased to 6.5% in December compared with a year earlier, marking the sixth straight monthly deceleration since a mid-2022 peak, the Wall Street Journal reported. The consumer price index, a measurement of what consumers pay for goods and services, rose at its slowest pace since October 2021, the Labor Department said Thursday. December’s annual inflation rate was down from 7.1% in November and well below a 9.1% peak in June. Core CPI, which excludes volatile energy and food prices, climbed 5.7% in December from a year before, easing from a 6% gain in November. Many economists see increases in core CPI as a better signal of future inflation than the overall CPI. Core prices increased at a 3.1% annualized rate in the three months ended in December, the slowest pace in more than a year. (Subscription required.) Read more. 

Foreclosure Filings Rose 115% in the Past Year​​​

Default notices, scheduled auctions and bank repossessions collectively rose in the past year meeting servicer expectations to a degree, but they're still historically low, according to Attom, NationalMortgageNews.com reported. Collectively, these foreclosure filings totaled 324,237 in 2022, up 115% from a year earlier but still 34% below the level seen in 2019, a report from the data-provider shows. Starts, which totaled 248,170 nationally, were up 169% compared to 2021 and down 26% from 2019. Read more. 

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Key Experts on a Special abiLIVE Webinar on Wednesday to Provide an Economic Outlook on Commercial Real Estate

Summit Investment Management LLC, Keen-Summit Capital Partners LLC and ABI's Real Estate Committee are pleased to present this webinar on the economic outlook for commercial real estate, once again featuring real estate economist and futurist Kiernan “KC” Conway. He is the chief economist for the CCIM Institute, principal and co-founder of consulting firm Red Shoe Economics, and a former commercial real estate subject-matter expert for the Atlanta Federal Reserve Bank. Program topics will include a review of key asset classes, the impact of inflation on the real estate economy, lasting changes stemming from remote work, how geopolitics pose risks to the sector, and other timely topics to arm practitioners with important information about the real estate economy. Join Conway and other key experts by registering for FREE!

U.S. Applications for Jobless Benefits Lowest in 15 Weeks​​​

U.S. applications for unemployment benefits fell to their lowest level in 15 weeks as the job market continues to show resilience in the face of attempts by the Federal Reserve to cool the economy, the Associated Press reported. The number of Americans applying for jobless aid for the week ending Jan. 7 fell by 1,000 to 205,000 from 206,000 the week before, the Labor Department said today. Last week’s number was revised up by 2,000 to 206,000. The four-week moving average of claims, which softens some of the week-to-week volatility, fell by 1,750 to 212,500. Last week, the government reported that U.S. employers added a solid 223,000 jobs in December, evidence that the economy remains healthy even as the Fed is rapidly raising interest rates to try to slow economic growth and the pace of hiring. The unemployment rate fell to 3.5%, matching a 53-year low. Read more. 

ABI's "Look Ahead for 2023" Discussions Continue on Wednesday with a Focus on Consumer Issues!

ABI's "Look Ahead for 2023" half-hour programs continue on Wednesday at 5 p.m. ET with experts providing perspectives on key consumer issues for your practice! Register for free! 

With Many Retailers Offering Online Sales, Phony Sites Blend In​​​

Online scams, which have existed for as long as things have been sold on the internet, are adapting to the budget-conscious behaviors of American consumers, the New York Times reported. Shoppers held out for bargains during the holiday season, knowing that stores, needing to get rid of inventory and worried about slowing sales, were more likely to offer them. That dynamic has created a ripe environment for fake sites to dupe unassuming shoppers who are strapped for cash and time by claiming to offer deep discounts on premium brands. “It’s playing on the emotion of the consumer,” said Douglas LaGore, a principal in KPMG’s cybersecurity services division. Many of these fake sites are run by networks of swindlers seeking to target large organizations, Mr. LaGore said. Over the past couple of years, many of these networks have produced a “cyber threat supply chain,” he said, meaning different groups gain specialized skills. One group in the network might identify potential targets, for instance, while another creates the deceptive material. Impostor sites often use the same tactics as retailers, like paid search-optimization tools, mobile apps and advertising strategies to generate traffic, said Rick Farnell, chief executive of Tracer, which uses artificial intelligence to identify potential cases of fraud through text and images. Tracer has taken down as many as 20,000 fake sites in a month for a client, he said. Read more. 

Volunteer Today to Become a Preliminary-Round Judge or Brief-Grader for the Duberstein National Bankruptcy Moot Court Competition!

The Duberstein National Bankruptcy Moot Court Competition, now in its 31st year and widely recognized as one of the nation’s preeminent moot court competitions, will be held in New York on March 4-6, 2023. Fifty-three teams from law schools across the country will compete through written briefing and oral argument. Volunteers are needed for brief-graders and judges for the preliminary rounds of the Competition on Saturday, March 4th, and Sunday, March 5th. To find out more and to volunteer, please click here.

USTP to Resume Debtor Audits in March 2023​​​

Effective March 13, 2023, the USTP will resume its designation of individual chapter 7 and chapter 13 cases for audit. These audits had been suspended in March 2020 due to public health concerns associated with the COVID-19 pandemic. As authorized in section 603(a) of Public Law 109-8, the USTP established procedures for independent audit firms to audit petitions, schedules and other information in consumer bankruptcy cases. Pursuant to 28 U.S.C. § 586(f), the USTP contracts with independent accounting firms to perform audits in cases designated by the USTP. Read more.

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