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The U.S. Senate will begin debate next week on a fifth coronavirus-response bill, Senate Majority Leader Mitch McConnell (R-Ky.) said yesterday, as he forecast tough negotiations with Democrats who are seeking broader aid than Republicans, Reuters reported. McConnell added the legislation, which has not yet been unveiled, will likely be more contentious than the previous four coronavirus aid bills. Those pumped more than $3 trillion into the hobbled economy with a combination of business loans, expanded unemployment benefits for workers and direct payments to families. “I do think we’ll get there and do something that needs to be done” before Congress begins an August recess, the Republican senator predicted. But there are also divisions among Republicans — in the White House and in Congress — over the precise direction of the upcoming bill, including whether there should be another round of direct payments to individuals and families. McConnell has talked about a bill costing no more than $1 trillion, while Democrats in the House of Representatives passed a $3 trillion measure in mid-May that McConnell has so far ignored. McConnell wants to focus on liability protections for business, schools and other entities as they reopen their operations even as coronavirus cases surge in many parts of the U.S., including Kentucky.

An analysis shows that one in five U.S. households who rent their homes could face eviction by October as enhanced federal unemployment benefits and eviction moratoriums come to an end this summer, CBSNews.com reported. Already, thousands of eviction cases are pending in a number of states. Between 19 million and 23 million families that rent across the country are at risk of losing their homes by September 30, estimates the COVID-19 Eviction Defense Project, an advocacy group focused on the impact of the coronavirus pandemic on housing. Roughly 20 percent of renters — about 13 million people — told a Census Bureau survey last month they had missed their May rent payment. Cities and states where eviction moratoriums have ended have seen a jump in legal proceedings to eject people from their homes. In Milwaukee, where Wisconsin's moratorium ended on May 26, cases rose 15 percent in the last month, according to the Eviction Lab. About 12,000 eviction cases are pending in Virginia courts, according to the Virginian-Pilot. In North Carolina, about 10,000 eviction cases are in the works, the News & Observer noted. Moratoriums in both those states ended last month. To be sure, landlords need to receive income from rent to cover their own expenses, such as the cost of mortgages, building maintenance and property taxes. That's why advocates are arguing for federal assistance to help renters afford their bills, such as continuing the $600 in weekly unemployment benefits that have been added on to varying state unemployment payouts.

In the spring of 2018, bank regulators trained to spot discriminatory lending detected something alarming at Bank of America. The bank was offering fewer loans to minority homebuyers in Philadelphia than to white people in a way that troubled examiners from the Office of the Comptroller of the Currency, according to two people directly involved in the probe and internal documents reviewed by ProPublica and The Capitol Forum. The officials suspected the second-largest bank in the U.S. was “redlining,” or deliberately turning its back on minority homebuyers, the people said. But after complaints from Bank of America, the OCC’s investigation stalled by September 2018. The OCC, which is part of the U.S. Treasury Department, never sanctioned the bank. Since President Donald Trump took office, the OCC has quietly shelved at least six investigations of discrimination and redlining, according to internal agency documents and eight people familiar with the cases. Flagstar Bank, a leading lender in Michigan, wrongly charged Black homeowners more through a network of mortgage lending affiliates, OCC officials concluded in 2017. That same year, agency examiners found that Colorado Federal Bank, an online lender, was doing the same to female borrowers. Another inquiry by OCC officials concluded that Chicago-based MB Financial, a lender acquired by Fifth Third Bank last year, charged Latinos too much on mortgage loans. Cadence Bank, a lender in several Southern states, was turning away minority borrowers in Houston, according to an OCC investigation. Fulton Bank, a lender based in Pennsylvania, had been discriminating against minorities in parts of Richmond, Virginia, and its home state, regulators concluded.

Even as the coronavirus pandemic battered the economy, forcing tens of millions of workers to file for unemployment and shuttering businesses large and small, a surprising trend emerged: The number of people filing for personal bankruptcy plunged, YahooFinance reported. In April, consumer bankruptcies dropped 47 percent from the same month last year, while May filings were down 43 percent year over year, according to the American Bankruptcy Institute. For the first half of the year, bankruptcies were 24 percent lower than the first six months of last year. Experts pointed to numerous factors for the slowdown. Courts and attorneys’ offices remained closed during state shutdowns. Evictions and foreclosures — often precursors to bankruptcy because people want to save their homes — were put on hold. Generous government support and forgiving creditors also kept many from falling into financial distress. Last, those on the brink of bankruptcy before the pandemic had more pressing issues to deal with. “People’s mental inboxes are full,” Professor Robert Lawless at the University of Illinois College of Law, who specializes in bankruptcy, consumer finance and business law, told Yahoo Money. “There are a lot of things to sort out in their lives — going to see a bankruptcy lawyer has been pushed further down on the to-do list for understandable reasons. I think that was a big part in the early days and weeks of the pandemic.” But the reprieve may be short-lived as the economy sputters, stopping and going as new COVID-19 outbreaks pop up, and as many of the temporary layoffs morph into permanent ones. “As government lifelines to help stabilize the economy begin to expire, bankruptcy provides a shield for households and companies facing intensifying financial distress,” ABI Executive Director Amy Quackenboss said in a statement earlier this week, announcing the half-year bankruptcy statistics. “We anticipate filings to begin increasing as a result.” Lawless’s past research on bankruptcies shows that people take time to choose bankruptcy, typically struggling through financial difficulties between two to five years before filing. Oftentimes, they are finally persuaded after a creditor sues them.

Treasury Secretary Steven Mnuchin said yesterday that the Trump administration is unwilling to extend a boost to unemployment benefits amid the coronavirus pandemic if it allows jobless workers to make more money than they did before losing their jobs, The Hill reported. Mnuchin said that any extension of enhanced unemployment insurance would cap benefits at “no more than 100 percent” of what the recipient made before becoming unemployed. The $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act signed by President Trump in March added $600 to unemployment insurance in every state. The boost, which expires on July 31, was intended to help workers in industries derailed by the pandemic support themselves and continue spending money amid the lockdowns imposed to slow the pandemic. The future of the increased benefit is one of the most contentious issues facing lawmakers as they craft another stimulus package. Economists credit the enhanced unemployment benefits, among other stimulus efforts, with preventing a deeper plunge in economic activity. But many Republicans have expressed regrets about the boost because it pushed unemployment benefits above the average wage in many states.

The Consumer Financial Protection Bureau (CFPB) settled with Timemark, Inc., a company based in Deerfield Beach, Florida, that provides debt-relief services to consumers with federal student-loan debt, and with its owners and officers, Timothy Lenihan, Sr., Mark Nagler, and Casey Gassaway, according to a CFPB press release. The CFPB alleged that the defendants charged illegal advance fees in violation of the Telemarketing Sales Rule (TSR) to consumers who were seeking to renegotiate, settle, reduce, or alter the terms of their loans. If entered by the court, the proposed order memorializing the settlement will permanently ban defendants from providing debt-relief services and impose a judgment totaling approximately $3.8 million in consumer redress and civil money penalties. The CFPB’s complaint, which was filed in federal district court for the Southern District of Florida, alleged that from 2016 through October 2019, the defendants used telemarketing campaigns to convince more than 7,300 consumers to pay up to $699 in fees to file paperwork to reduce or eliminate their monthly payments for their federal student loans, through loan consolidation, forgiveness, or income-driven repayment plans. The U.S. Department of Education, however, offers these options to student loan borrowers for free. Moreover, under the TSR, it is illegal to request or receive any fees for debt-relief services sold through telemarketing before the terms of the debt are altered or settled, and the consumer has made at least one payment pursuant to the new arrangement. The CFPB alleges that the defendants violated the TSR because they requested and received payments from consumers within a few days, or at the latest, within 30 days of their enrollment — before the terms of the debts were altered.

Senate Majority Leader Mitch McConnell (R-Ky.) appeared to open the door yesterday to including some direct payments to Americans in a future coronavirus relief bill, The Hill reported. Asked if funding for individuals like the stimulus checks included in a March package would be in the next piece of legislation, which would be the fifth in response to COVID-19, McConnell said they "could well" be. "I think the people that have been hit the hardest are people who make about $40,000 or less. Many of them work in the hospitality industry. .... That could well be a part of it," McConnell said. Congress included a $1,200 one-time payment for individuals making up to $75,000 per year in the $2.2 trillion March coronavirus stimulus package. The amount a person could receive then decreased until it hit a salary ceiling of $99,000 per year, where the direct payment was phased out altogether. The Trump administration has pushed for a second round of the direct payments to be included in the next coronavirus relief package taken up by Congress. House Democrats passed a nearly $3 trillion bill in May that included a $1,200 check for individuals, similar to the March bill, but that legislation is not expected to be taken up by the GOP-controlled Senate. President Trump said late last month that he supports another round of stimulus checks. But GOP lawmakers have been wary, believing that the payments don't directly stimulate the economy and went to individuals who have not been impacted financially by the spread of the coronavirus. Read more. 

In related news, direct cash payments can improve financial security, boost consumer spending and may speed up the recovery, according to a letter from a group of economists calling on U.S. policymakers to keep providing direct cash payments to Americans until the economy is stronger, Reuters reported. The stimulus payments should be issued automatically, based on certain economic indicators such as the unemployment rate, until there is enough evidence that the economy is recovering, the group of mostly left-leaning economists said in an open letter organized by the Economic Security Project and The Justice Collaborative. “The first round of economic impact payments were a lifeline that helped some get by for a few weeks,” the economists wrote. “Even after businesses start to re-open and jobs begin to come back, there will be significant economic fallout, and demand will continue to lag if people don’t have money to spend.” The stimulus payments issued in April under the $2.3 trillion CARES Act helped lift spending for lower income households faster than higher income households, with much of the cash going to essentials, according to an analysis by Harvard University’s Opportunity Insights. The $600 supplement Congress added to weekly unemployment benefits are set to expire at the end of the month, leaving jobless Americans at risk of facing a cash cliff while jobs are still scarce. Read more.