U.S. Has Sent $8.28 Billion in Pandemic Funds to Local Lenders​​​

Roughly $8.28 billion in relief funds have been disbursed to 162 community financial institutions across the country, through the Treasury's Emergency Capital Investment Program, officials said yesterday, the Associated Press reported. Those financial institutions in turn offer loans to micro and small businesses. The funding regime, abbreviated ECIP, is one of several pandemic relief programs meant to support community financial institutions — which provide loans, grants, and other assistance to small and minority-owned businesses that have difficulty getting funding from traditional banks. “There is almost $9 billion on the ground right now” for community banks and lenders, Vice President Kamala Harris said on a call with reporters. Roughly 96 percent of Black-owned businesses are sole proprietorships and single employee companies. They have the hardest time finding funding and are often the first type of businesses impacted during economic downturns. There were a record 5.4 million applications for new businesses filed in 2021, according to the U.S. Census Bureau, surpassing the previous peak in 2020 of 4.4 million. Of that number, a growing share are sole proprietors and businesses without other employees.
​​​​​​
Read more. 

U.S. Jobless Claims Increase Slightly, Still Remain Historically Low​​​

Applications for U.S. unemployment insurance rose for the first time in six weeks but remained historically low, suggesting demand for workers remains healthy despite an increasingly uncertain economic outlook, Bloomberg News reported. Initial unemployment claims increased by 5,000 to 213,000 in the week ended Sept. 17, after a downward revision in the prior week, Labor Department data showed Thursday. The four-week moving average, which smooths out volatility from week to week, fell to 216,750. Continuing claims dropped to 1.38 million in the week ended Sept. 10. Jobless claims have generally been dropping as employers try to fill millions of open positions while retaining the workers they already have. However, hiring is expected to weaken as the Federal Reserve continues to raise interest rates, with employment being a key sacrifice in the central bank’s effort to bring inflation down. Chair Jerome Powell, in a press conference after the Fed raised rates by another 75 basis points on Wednesday, said that there isn’t a “painless way” to restore price stability, and that a softening labor market is one of the prices to pay.
​​​​​​
Read more. 

Virtual Option Still Available to Attend Tomorrow's Views from the Bench Program!​​​

If you can't make it to D.C. tomorrow to attend ABI’s popular Bankruptcy 2022: Views from the Bench program in person, don't miss the opportunity to enjoy the sessions live from the convenience of your home or office by registering for the virtual option! The program features the views of 24 sitting and retired bankruptcy judges. This year’s program will examine challenges related to bankruptcy confirmation, committee formation, ethics and much more. G. Eric Brunstad of Dechert LLP (New Haven, Conn.) will be the featured luncheon speaker during a conversation on recent Supreme Court developments. Click here to register to register for the virtual option today!

How State Regulators Supplanted the Feds in Policing Crypto Markets​​​

Montgomery, Ala., the state capitol where roughly a fifth of the population lacks internet access seems like an unlikely hub for crypto regulation. And Joe Borg, director of the Alabama Securities Commission seems like an unlikely captain of that effort. Yet Borg, along with a handful of other state financial watchdogs, is at the vanguard of policing the trillion-dollar digital asset market, the Washington Post reported. While federal regulators took no action, Borg and his counterparts in Texas, New Jersey, Kentucky and Vermont targeted the operations of two key crypto players at the heart of this summer’s crypto meltdown, Celsius and Voyager, filing cease and desist orders against them months before the self-styled crypto banks declared bankruptcy. The state financial watchdogs also were way ahead of the feds in the summer of 2021 when they issued a cease-and-desist order against BlockFi, another rapidly growing crypto bank, leading to a $100 million, first-of-its-kind settlement for securities law violations. The Securities and Exchange Commission, the federal agency most often thought of as the crypto watchdog, joined talks between the two sides only as they neared a deal, state regulators say. Now, Borg and his fellow state regulators are working to help hundreds of thousands of Celsius and Voyager customers recoup billions of dollars worth of assets from frozen accounts. Again, federal regulators are either largely silent or late to the action. The Federal Reserve and the Federal Deposit Insurance Corporation only wrote Voyager demanding it drop “false and misleading” marketing claims three weeks after it had declared bankruptcy.
​​​​​​
Read more. 

Marry Now, Pay Later: New Services Put Weddings on Installment​​​

Introduced in July 2021, Maroo gives couples the option to pay its network of vendors in installments over a 12-month period, similar to how “buy now, pay later” programs offered by companies including Afterpay and Klarna allow people to incrementally pay for clothing and home goods bought online, the New York Times reported. The average cost of a wedding in 2021 was $28,000, according to a nationwide survey of 15,000 couples conducted by the wedding planning and registry website the Knot. The trade group the Wedding Report, in a separate study that surveyed 1,699 individuals, determined that the average cost of a wedding last year was $27,000. But when it comes to paying for an event, marrying couples have historically had few options beyond covering costs upfront or with conventional loans or credit cards. “There has been no innovation,” said Anja Winikka, Maroo’s chief marketing officer. “You have a lot of cool planning tools, checklists and photos for inspiration, but nothing for the painful process of paying for it.” The personal finance writer Nicole Lapin, who holds an Accredited Investment Fiduciary certification from the Financial Industry Regulatory Authority, or Finra, advises couples to be cautious about the lure of installment plans. Their pay-later aspect can lead users to take on more expenses than they can afford, which is why Ms. Lapin says such plans are best for financially stable people who are able to pay the full cost of a wedding upfront, but would rather keep cash liquid to use or invest in other ways.
​​​​​​
Read more. 

After Years of Low Mortgage Rates, Home Sellers Are Scarce​​​

Homeowners with low mortgage rates are balking at the prospect of selling their homes to borrow at much higher rates for their next homes, a development that could limit the supply of houses for sale for years to come, the Wall Street Journal reported. Housing inventory has risen from record lows earlier this year as more homes sit on the market longer. But the number of newly listed homes in the four weeks ended Sept. 11 fell 19% year-over-year, according to real-estate brokerage Redfin Corp. That is an indication that sellers who don’t need to sell are staying on the sidelines, economists say. Some homeowners will always need to sell due to job relocations, divorces, deaths or other life events. Yet if those who have the option not to move decide to stay put, that could keep the inventory of homes for sale below normal levels and keep home prices elevated, even if demand remains low. The lack of housing inventory is one of the major reasons home prices have remained near record highs, despite seven straight months of declining sales as interest rates have roughly doubled since the start of the year. Millions of Americans locked in historically low borrowing rates in recent years when the Federal Reserve kept short-term interest rates low. As of July 31, nearly nine of every 10 first-lien mortgages had an interest rate below 5% and more than two-thirds had a rate below 4%, according to mortgage-data firm Black Knight Inc. About 83% of those mortgages are 30-year fixed rates, Black Knight said. (Subscription required.)
​​​​​​
Read more. 

NEXT WEEK! Two Upcoming abiLIVE Webinars to Examine Agriculture Business, Provide Outlook on Global Distressed Dealmaking​​​

Be sure to register for two upcoming abiLIVE webinars that will be examining key topics in insolvency:

The "Agriculture Business and Legal Basics" webinar, sponsored by ABI's Real Estate Committee on September 28, will present experts looking at issues in the agricultural industry to prepare attorneys, financial advisors and other professionals for future restructuring assignments in this unique space. Complimentary registration.

The "Global Trends and Outlook in Distressed Dealmaking" webinar, sponsored by ABI's Financial Advisors and Investment Banking Committee on September 30, will feature advisors based in Colombia, London, New York and Singapore sharing their experiences on how distressed deals are closed, along with their insights and predictions on what the deal market will look like going forward, and how rising costs, inflation, interest rates and volatility in the capital markets globally may impact the deal space. Complimentary registration.

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 Twitter!