Commentary: Why Does the Bankruptcy Code Discriminate Against Disabled Veterans?



Although the Bankruptcy Code was enacted to give a “fresh start to the honest but unfortunate debtor” and a single point of contact for creditors (and to keep our economy going), admitting that your debts are out of control is difficult. An op-ed by Prof. Nancy Rapoport and Dr. Mary Langsner today in The Hill asks why Congress would make it harder for disabled veterans who need bankruptcy protection. In 2005, Congress changed the Code to force those with income levels at or above the median in their geographic area into chapter 13 (reorganization), rather than chapter 7 (liquidation). Although there had been abusive chapter 7 filings, these amendments have created unintended consequences, especially for disabled veterans, according to Rapoport and Langsner. Social security benefits are also excluded, but veterans’ military disability benefits are included in calculating their current monthly income. There is a simple fix, according to Rapoport and Langsner: Congress can exclude military disability from being counted toward “current monthly income” for bankruptcy purposes. Sens. Tammy Baldwin (D-Wisc.) and John Cornyn (R-Texas) co-sponsored the Honoring American Veterans in Extreme Need (HAVEN) Act. The HAVEN Act would exclude certain veterans’ benefits (including disability benefits) from the definition of “current monthly income.” Read the op-ed.



For additional perspectives on this remedy, make sure to listen to ABI’s latest podcast.

Analysis: Suspected Cases of Senior Financial Abuse Hits Record



U.S. banks reported a record 24,454 suspected cases of elder financial abuse to the Treasury Department last year, more than double the amount from five years earlier, according to government data, the Wall Street Journal reported. The increase occurred as new federal and state laws are prompting banks to take a more active role in trying to address frauds and scams that target older customers. For their part, banks are beefing up training programs for employees on how to detect, stop and report issues without violating a customer’s privacy. Employees are even learning how to recognize early signs of cognitive decline. The issue of elder financial abuse is likely to grow even more pronounced. An average of 10,000 Americans turn 65 a day, a pace expected to continue through 2030. In that year, one in every five people will be 65 or older, according to the U.S. Census Bureau. The 24,454 suspected cases reported in 2018 is up 12% from 21,839 cases in 2017, the previous record, and more than double the number in 2013, according to Treasury Department data.

Unconventional Mortgages Make a Comeback



Mortgage loans aimed at buyers with unusual circumstances, such as those who can’t provide the standard proofs of income, are growing rapidly even as rising interest rates and higher home prices crimp demand for mortgages, the Wall Street Journal reported. Lenders issued $34 billion of these unconventional mortgages in the first three quarters of 2018, a 24 percent increase from the same period a year earlier, according to Inside Mortgage Finance. While that makes up less than 3 percent of the $1.3 trillion of mortgage originations over that period, the growth is notable because it came as traditional home loans declined. Those traditional originations fell 1.2 percent over the same period and were on track for a second down year in 2018. During the financial crisis, many unconventional loans soured after borrowers misstated their incomes and lenders didn’t ask for documentation, earning them the nickname “liar loans.” Today, industry executives say the new unconventional mortgage, now referred to as “nonqualified” in industry jargon, has changed drastically from its crisis-era predecessor and is far safer. Even so, some regulators, consumer advocates and others worry that the growth in this type of mortgage and rising competition to make such loans could lead to renewed risks for the housing market.

White House Seeks List of Programs that Would Be Hurt if Shutdown Lasts into March



White House acting chief of staff Mick Mulvaney has pressed agency leaders to provide him with a list of the highest-impact programs that will be jeopardized if the shutdown continues into March and April, the Washington Post reported. Mulvaney wants the list no later than Friday, according to sources. The shutdown has already caused the federal government to stop paying 800,000 employees, but the impact is expected to become exponentially broader in the coming weeks. The federal court system is likely to halt major operations after Feb. 1, and the Department of Agriculture does not have funding to pay food stamp benefits in March to roughly 40 million people. Read more.



In related news, the shutdown is hobbling key parts of the financial system as companies ditch plans and scramble to deal with how to operate without the help of regulators, the Washington Post reported. Already, it has slowed the market for initial public offerings, or IPOs. Wall Street was expecting tech giants including Uber, Lyft, Airbnb and Pinterest to conduct IPOs this year, pushing the amount raised in public markets into record territory, but that now seems unlikely. By this time last year, eight companies had already gone public, said Kathleen Smith of Renaissance Capital, a manager of IPO products. “There is a growing backlog of companies waiting for comments from the SEC, but no one at the SEC is there to respond,” she said. “We will have to see how creative companies will be in trying to become public.” Read more.

 

Hospitals Are Asking Their Own Patients to Donate Money



Nonprofit hospitals across the United States are seeking donations from the people who rely on them most: their patients, the New York Times reported. Many hospitals conduct nightly wealth screenings — using software that culls public data such as property records, contributions to political campaigns and other charities — to gauge which patients are most likely to be the source of large donations. Those who seem promising targets for fundraising may receive a visit from a hospital executive in their rooms, as well as extra amenities like a bathrobe or a nicer waiting area for their families. Some hospitals train doctors and nurses to identify patients who have expressed gratitude for their care, then put the patients in touch with staff fundraisers. These various tactics, part of a strategy known as “grateful patient programs,” make some people uncomfortable. “Wealth screenings strike me as unseemly but not illegal or unethical,” said Arthur Caplan, a bioethicist at the New York University School of Medicine. Mark Rothstein, a bioethics professor at the University of Louisville, said, “Getting physicians involved in philanthropy is something fraught with danger.” He added that it could make patients worry that their care might be affected by whether they made a donation. A 2016 survey of 108 hospitals found that 68 had grateful patient programs, according to the Advisory Board, a consulting firm. Read more.



Miss last week's ABI Health Care Distress program? Watch the addresses by former White House Counsel Don McGahn and former Vermont Governor and DNC Chair Howard Dean covered on C-SPAN:



- McGahn



- Dean

 

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