Biden Administration Steps Up Protection Against Student Loan Forgiveness Scams​​​

The Biden administration is increasing its efforts to fight scams aimed at taking advantage of borrowers applying for its expansive student loan forgiveness plan, senior administration officials announced yesterday, NPR.org reported. The administration's forgiveness program will cancel up to $20,000 in student loan debt for borrowers making less than $125,000 or $250,000 for households. The plan, which is projected to cost $400 billion, could benefit as many as 40 million Americans. Since the relief was announced in August, the administration has released very little concrete information about what the application will look like or when it will be released. That vacuum has created an opportunity for scammers: As NPR reported last month, some borrowers have already encountered student loan relief scams and misinformation in text messages, phone calls and emails, and experts say it's getting worse. In order to hold scammers accountable, the administration plans to increase collaboration between the Department of Education and other federal agencies, including the Federal Trade Commission and the Consumer Financial Protection Bureau. The administration will also share scam complaints with states more frequently, so state attorneys general can act faster to stop scams in their own jurisdictions, and plans to partner with social media influencers on a public awareness campaign. Read more.

In related news, a group in Wisconsin claims President Biden’s plan to cancel up to $20,000 in student loan debt violates federal law by intentionally seeking to narrow the racial wealth gap and help Black borrowers, the Washington Post reported. The allegation is among the claims in a lawsuit filed on Tuesday by conservative legal outfit Wisconsin Institute for Law and Liberty on behalf of the Brown County Taxpayers Association. The complaint largely relies on arguments of executive overreach that have been raised in other legal actions to block Biden’s plan. It stands out, however, by also bringing race into the mix. In promoting the debt-forgiveness plan, the White House has said it could help narrow the racial wealth gap and advance racial equity. But the lawsuit argues that those statements constitute an “improper racial motive” and violate the constitution’s guarantee of equal protection of the laws. The president’s policy would cancel up to $10,000 in federal student loan debt for borrowers who earn less than $125,000 per year, or less than $250,000 for married couples. Those who received Pell Grants, federal aid for lower-income students, could see up to $20,000 forgiven. There are no racial criteria for the loan forgiveness, but because of the disparities in who holds student loan debt, the cancellation policy could have an outsized effect on Black borrowers, who shoulder a disproportionate share of student loan debt and frequently receive Pell Grants because of a lack of financial resources to attend college. ​Read more.

Hurricane Fiona Boosts U.S. Weekly Jobless Claims​​​

The number of Americans filing new claims for unemployment benefits increased by the most in four months last week, but the labor market remains tight even as demand for labor is cooling amid higher interest rates, Reuters reported. Some of the larger-than-expected jump in jobless claims reported by the Labor Department on Thursday was blamed on Hurricane Fiona, with filings surging in Puerto Rico, which was ravaged by the storm in the second half of September. Claims data in the coming weeks will likely be distorted by Hurricane Ian, which cut a swath of destruction across Florida and the Carolinas at the end of September. Initial claims for state unemployment benefits rose 29,000 to a seasonally adjusted 219,000 for the week ended Oct. 1. Last week's increase was the biggest since June. Data for the prior week was revised to show 3,000 fewer applications filed than previously reported. Economists polled by Reuters had forecast 203,000 applications for the latest week. Unadjusted claims increased 13,264 to 167,083 last week. Claims for Puerto Rico jumped 3,917, accounting for about 30% of applications. The U.S. territory normally makes up less than 1% of national claims.
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Retail Real Estate Is Enjoying Its Biggest Revival in Years​​​

Brick-and-mortar store owners are emerging from the pandemic with surprising strength, posting some of their best numbers in years and plotting expansions as more Americans venture out to buy things again, the Wall Street Journal reported. U.S. retail vacancy fell to 6.1% in the second quarter, the lowest level in at least 15 years, while asking rents for U.S. shopping centers in the quarter were 16% higher than five years ago, according to real estate services firm Cushman & Wakefield. More stores opened than closed in the U.S. last year for the first time since 1995, according to an analysis by Morgan Stanley, and some analysts say they expect that trend to continue this year, even with recession fears rising. The retail real estate industry’s turnaround reflects a wrenching, decadeslong adjustment that included hundreds of retailer bankruptcies, widespread vacant storefronts and plummeting demand for enclosed malls. Over the past dozen years, construction of new retail has slowed significantly after many years of overbuilding. Instead, most developers are opting to renovate outdated properties rather than build new ones. Those that do embark on new projects are more cautious, usually securing leases from tenants before breaking ground. More and more companies that started as online-only retailers, like Warby Parker Inc., are also turning to real estate to attract customers and boost growth. The eyeglass retailer opened nine new locations in the second quarter, bringing its total at the time to 178 stores, according to financial filings. (Subscription required.)
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Small Businesses Getting Squeezed Out in Push for Warehouse Space​​​

A warehouse crush across the U.S. is squeezing out smaller companies as big retailers fill industrial storage sites with their growing stockpiles of inventory, the Wall Street Journal reported. Logistics and real estate specialists say many large retailers are demanding extra room to store excess inventories, driving up costs for smaller companies and in some cases driving them out of spaces. Karen Galena, president of First Logistics, which has four warehouses in the Chicago area that provide space for retailers and manufacturers, said bigger customers are willing to pay higher prices for increasingly scarce storage space. “It’s tough for the small guy,” Ms. Galena said, noting that labor and other costs are rising for warehouse operators. Andy Moses, senior vice president of sales and solutions at Penske Logistics, said warehouse operators are also focused on retaining customers with a high turnover of goods because the handling fees bring in higher revenues. The challenges small businesses face finding warehouse space mirrors difficulties many had securing room on container ships earlier in the COVID-19 pandemic, when ocean carriers drove up rates and bumped smaller shippers to make way for larger clients. The nationwide vacancy rate for industrial real estate was 3.2% in the third quarter, down from 3.8% the same quarter a year ago, according to commercial real-estate services firm Cushman & Wakefield. The vacancy rate was over 5% in the third quarter of 2020. (Subscription required.)
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Report: Eviction Expectations in the Post-Pandemic Housing Market​​​

In the initial stages of the pandemic, rent increases slowed relative to their recent trends, but by mid-2021 an increase in the demand for space, a reduced average household size (including more renters seeking their own units), and supply chain pressures began to drive up the prices of all housing at historic rates, according to the New York Fed's Liberty Economics Blog. In August 2022, the CPI-U for rent of primary residences was nearly 7 percent above its August 2021 level and more than 10 percent above the pre-pandemic level. Fortunately, a large majority of renters in a New York Fed 2022 survey — 69.8 percent — report a zero chance of being evicted by February 2023. About 20 percent of respondents report a chance of between 1 and 10 percent, and the remaining 10 percent report a chance of eviction of 10 percent or more. Not surprisingly given the limitations on evictions that were in place during 2021, the shares of respondents who report having ever been evicted themselves or knowing someone who was evicted since 2006 remain very close to their 2019-20 levels, at about 4 percent and 24 percent, respectively.
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Information on How to Help with Hurricane Ian Relief Efforts​​​

ABI's thoughts are with the residents of Florida and other regions who have been affected by the flooding and destruction caused by Hurricane Ian. Read a note by ABI Executive Director Amy Quackenboss about ways to support the victims of Hurricane Ian in whatever way you can.

Don't Miss Tuesday's abiLIVE Webinar with the Second Segment of Experts Taking a Closer Look at the Dutch WHOA and English RP​​​

Following up on Part I, Tuesday's abiLIVE webinar, hosted by ABI, INSOL and the international committee of the Dutch Restructuring Association, will discuss the content of relevant restructuring plans under U.S. chapter 11, the English Scheme processes and the Dutch Scheme, with a focus on (the relevance of) valuation reports. The panelists also will discuss the particularities of the content of the relevant restructuring plans for their respective jurisdictions. Register for FREE.

Notice of Vacancy: U.S. Bankruptcy Judge for the Northern District of New York​​​

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 Northern District of New York in Albany, N.Y. The selection process will be confidential and competitive. Completed application packages must be in the format required by the Second Circuit and received no later than October 14, 2022. Click here for more information.

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