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May 23, 2005
House to Hold Hearing on Predatory Mortgage Lending This Week
Two House Financial Services subcommittees have scheduled a joint
hearing on Tuesday on legislation to combat predatory mortgage lending
practices, CongressDaily reported. A bill, co-sponsored by
Financial Services Housing Subcommittee Chairman Bob Ney, (R–Ohio)
and Financial Services Capital Markets Subcommittee ranking member Paul
Kanjorski (D–Pa.), would create uniform national standards for
curbing abuses in the subprime mortgage market. The Ney–Kanjorski
measure would pre-empt state predatory lending laws. Supporters of the
legislation have said it would curb industry abuses while ensuring
subprime loans are available to consumers who have less-than-perfect
credit histories. Opponents of the Ney–Kanjorski bill argue it
would replace effective state predatory lending laws with a weak federal
standard. They are backing a competing bill by Reps. Brad Miller
(D–N.C.) and Melvin Watt (D–N.C.) and House Financial
Services ranking member Barney Frank (D–Mass.). The
Watt–Miller–Frank bill would create a national standard
modeled on North Carolina’s anti-predatory lending statute, but it
would allow states to enact stronger predatory lending laws.
Asbestos Markup to Continue This Week
The slow-moving markup of asbestos legislation will continue on
Tuesday, as Senate Judiciary Chairman Arlen Specter (R–Pa.) tries
to complete work on the bill before Congress breaks for the Memorial Day
recess, CongressDaily reported.
As Prices Rise, Homeowners Go Deep in Debt to Buy Real Estate
Five years into a housing boom that has boosted U.S. home values an
average of 50 percent and added an estimated $5.5 trillion to the total
market value of residential real estate, many Americans no longer think
of their home as just a place to live, the Wall Street
Journal reported. Instead, it’s a cash machine that can be
used to rapidly build wealth. To that end, a growing number of people
are tapping into their home equity to invest in more real estate. Read
the full article at www.wsj.com
(subscription required).
Next Stop, Oblivion
An editorial in Barron’s online focuses on United
Airline’s pension default and the future of the private
defined-benefit pension system. Read the article at
href='http://www.wsj.com/'>www.wsj.com (subscription required).
Orange County, Calif., Plans to Refinance Bankruptcy Debt
It has been almost 10½ years since wrong-way interest-rate
bets plunged Orange County, Calif., into the largest municipal
bankruptcy, the online Wall Street Journal reported. Now,
with some of the $1 billion in debt that the county sold in 1995 and
1996 becoming callable—or able to be repurchased from
investors—the county plans to take advantage of current interest
rates to refinance and shorten the maturity of its outstanding debt.
Bankruptcy Overhaul Means Tougher Choices
An article in the online Wall Street Journal examines
the implications of the new bankruptcy law for consumers. Read the
article at www.wsj.com (subscription
required).
Judge in United Case Delays Ruling on Machinists’ Pay
A federal bankruptcy judge said on Friday he would not issue a ruling
until May 31 on United Airlines’ request to impose lower pay and
benefits on its machinists union, a decision aimed at letting the two
sides agree on a long-term contract, the Associated Press reported.
Judge Eugene Wedoff’s statement came after closing
arguments in a week-long trial and removed the immediate threat of a
strike at the carrier. “It gives us time to hopefully resolve
these matters completely, which is what we wanted all along,”
United spokeswoman Jean Medina said.
Trump Hotels Inc. Exits Bankruptcy
Trump Hotels & Casino Resorts Inc. on Friday said it has emerged
from bankruptcy, changing its name to Trump Entertainment Resorts Inc.,
Reuters reported. The company, which entered chapter 11 protection in
November, also said it has issued 40 million shares of new common stock,
after a one-for-1,000 reverse stock split.
America West Deal Could Threaten Rival Airlines
America West Holdings Corp.’s planned takeover of US Airways
Group Inc. bolstered industry shares on Friday, but analysts warned that
rival airlines could suffer long-term as a result of the deal, Reuters
reported. America West, with help from investors putting up about $1.5
billion in new capital, on Thursday unveiled its long-rumored plan to
acquire bankrupt US Airways in a deal that would create the
nation’s sixth-largest airline. While analysts questioned the $600
million in cost cuts and increased revenues the airlines forecast, they
agreed that an estimated $2 billion in cash would make it a formidable
rival.
U.S. Economy to Expand by 3.4 Percent in 2005, Survey Finds
The U.S. economy will slow more this year than previously thought and
inflation will accelerate, a survey of economists showed, Bloomberg News
reported. The U.S. economy may expand by 3.4 percent this year, less
than the 3.6 percent projected in February and down from 4.4 percent in
2004, according to 50 economists surveyed by the National Association
for Business Economics (NABE). The economists trimmed their
second-quarter growth forecast to 3 percent from the 3.7 percent they
projected in the February survey. The economy cooled to a 3.1 percent
growth rate in the first quarter as the trade deficit widened and rising
energy prices helped restrain business and consumer spending, the
newswire reported. Economists surveyed by NABE said rising imports will
cause the slowdown to linger into the second quarter before growth
rebounds to 3.5 percent in the second half.
Diocese Sells 83 Properties to Settle Abuse Claims
More than 80 properties owned by the Catholic Diocese of Tucson were
auctioned off Saturday in hopes of raising $3.2 million toward an
eventual settlement to pay clergy sex abuse claims, the Associated Press
reported. But the sale of the 83 properties in eight Arizona counties,
conducted with bankruptcy court approval, won’t become final until
June 23, and officials won’t know for about 40 days exactly how
much revenue the auction produced.
Air Canada Parent ACE to Spinoff Part of Aeroplan
Air Canada parent ACE Aviation Holdings Inc. said on Friday it will
partially spin off its Aeroplan rewards program into an income fund and
offer units to the public, Reuters reported. The new Aeroplan Income
Fund will hold a 15 percent stake in the Aeroplan rewards program, said
ACE, which announced on Thursday that it was considering the partial
spinoff. Aeroplan will distribute a portion of the proceeds from an
initial public offering to ACE, and will keep the rest to partially fund
a reserve for the plan’s mile redemptions and certain capital
expenditures, the newswire reported.