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Wells Fargo & Co. is pulling back from student lending as the U.S. surge in coronavirus cases threatens to further disrupt higher education and the broader U.S. economy, Bloomberg News reported. The firm, which has been reviewing businesses under new Chief Executive Officer Charlie Scharf, said student loans for the upcoming academic year will be granted only to people who submitted applications before July 1 or to customers who already have an outstanding balance on a prior student loan from the bank. “Wells Fargo has decided to narrow its student-lending focus,” Manuel Venegas, a spokesperson for the bank, said in a statement. The pandemic is disrupting academic programs and undermining the ability of many borrowers to repay as it halts commerce and costs tens of millions of Americans their jobs. Already, more than 40 million student-loan accounts were in deferment as of mid-June, according to Equifax. San Francisco-based Wells Fargo had a $10.6 billion private student-loan book at the end of the first quarter — a portfolio that’s been shrinking in recent years. Private makes up about $130 billion of the $1.7 trillion student-debt pie, according to data provider MeasureOne.

There is a growing recognition across party lines that Congress will need to spend more money, and soon, to continue to prop up the American economy during the coronavirus recession, the New York Times reported. But there is little consensus on what that next aid package will look like and how quickly it will arrive before the end of summer, and there is a sense among Republicans and Democrats that the next bill will spend far less to help people and businesses than the nearly $3 trillion that Congress approved in March in a series of rapid-fire bills. Some economists say that lawmakers are risking further damage to an already fragile recovery by not moving more quickly. The unemployment rate has dropped from its April peak but was still at 11.1 percent in June. Forecasters at the Congressional Budget Office said on Thursday that they expected the economy to shrink by 5.9 percent this year, a contraction that would be more than twice as large as the one the U.S. experienced during the Great Recession in 2009. Federal Reserve officials are worried that a possible “second wave” of the pandemic would further depress economic growth in a way that would be “more severe and protracted” than the current forecast, according to minutes from their most recent meeting published on Wednesday. Real-time indicators of shopping patterns and business openings suggest that a once-brisk economic rebound stalled in June as the virus began spreading more rapidly in Texas, Florida and other states.

A judge ruled on Monday that a group of Westchester County, N.Y. landlords cannot sue in federal court to block Gov. Andrew Cuomo’s temporary moratorium on evictions in response to the COVID-19 pandemic, Law.com reported. U.S. District Chief Judge Colleen McMahon of the Southern District of New York said in a 37-page opinion that federal courts do not have jurisdiction to determine whether Cuomo violated New York state law by enacting his May 7 executive order pausing evictions through Aug. 19. In any event, she said, the order did not constitute a physical or regulatory taking by the government that would give rise to claims under the Fifth Amendment to the U.S. Constitution. The lawsuit, filed in White Plains, sought to undo two provisions of the order, which temporarily blocked landlords from pursuing eviction proceedings and gave renters the option to put their security deposit toward their rent payment.

The Supreme Court ruled yesterday that the president is free to fire the director of the Consumer Financial Protection Bureau without cause, the New York Times reported. The ruling puts to rest a decade of doubt over whether the bureau and its leadership structure, in which the director is appointed by the president to a five-year term and cannot be dismissed without a substantial reason, were constitutional. While the narrow decision validates the agency’s existence, it could also open it to greater politicization, effectively turning its director into something akin to a cabinet member who serves at the pleasure of a president. The vote was 5 to 4, with the court’s five more conservative justices in the majority. Chief Justice John G. Roberts Jr., writing for the majority, said that the Constitution did not allow powerful agency officials to be insulated from some kinds of executive oversight. “The C.F.P.B. director has no boss, peers or voters to report to,” the chief justice wrote. “Yet the director wields vast rule making, enforcement and adjudicatory authority over a significant portion of the U.S. economy. The question before us is whether this arrangement violates the Constitution’s separation of powers.” He said that it did, but he stopped short of stripping the agency of its other powers, which include setting rules, conducting investigations and bringing enforcement actions.

Data from Black Knight showed that the number of homeowners delaying payments increased by a steep 79,000 in the past week, reversing a three-week trend that saw forbearance requests decline, The Hill reported. "Overall, the number of active forbearance plans is up 79K from last week — erasing roughly half of the improvement seen since the peak of May 22 — with rises seen over each of the past five business days," the company said of the latest data. The CARES Act passed by Congress in March allowed homeowners experiencing financial difficulty due to the COVID-19 pandemic to request forbearance for government-backed mortgages for up to 180 days without being subject to penalties and late fees. But interest continues to accrue on the loans, and the full principal still has to be paid back. Black Knights said that the delayed payments amount to more than $1 trillion in unpaid principal and represent 8.8 percent of all mortgages. The total number of loans in forbearance neared 4.7 million.

Banks have pulled back sharply on lending to U.S. consumers during the coronavirus crisis. One reason: They can’t tell who is creditworthy anymore, the Wall Street Journal reported. Millions of Americans are out of work and behind on their debts. But, in many cases, the missed payments aren’t reflected in their credit scores, nor are they uniformly recorded on borrowers’ credit reports. The confusion stems from a provision in the government’s coronavirus stimulus package. The law says lenders that allow borrowers to defer their debt payments can’t report these payments as late to credit-reporting companies. From March 1 through the end of May, Americans deferred debt payments on more than 100 million accounts, according to credit-reporting firm TransUnion, a sign of widespread financial distress. The credit blind spot has further clouded the outlook for lenders. Lenders that are having a tough time spotting risky loan applicants are approving fewer borrowers for credit cards, auto loans and other consumer debt. They are also hunting for new data sets that could indicate who is in financial trouble and how much they need to set aside to cover soured loans. The Federal Reserve last week said that the biggest U.S. banks could be saddled with as much as $700 billion in loan losses in a prolonged downturn. “Without accurate information, their only option is to pull back on credit,” said Michael Abbott, head of banking for North America at consulting firm Accenture PLC.

Millions of Americans face a cash cliff this summer as emergency unemployment benefits instituted by the CARES Act — which lifted U.S. consumer incomes by a record 10.8 percent in April — expire, Reuters reported. The loss of that safety net looms in the weeks ahead, well before a sustained recovery is likely to take hold from the sudden and deep recession brought on by the novel coronavirus. Personal income dropped 4.2 percent in May, data Friday showed. The $600 supplement Congress added to weekly unemployment benefits is due to expire on July 31. Without new support, recipients face a substantial loss of income — particularly devastating for those who worked in hard-hit sectors like hospitality where new jobs are scarce. During high unemployment and a still-raging pandemic, the end of enhanced jobless benefits could drag on consumer spending, set off a wave of missed rent and mortgage payments and translate to a slower recovery, economists said.

Thousands of Virginia residents are now at risk of losing their homes during the pandemic under a new order issued by the state Supreme Court, DCist.com reported. The order, released on Monday by Virginia Chief Justice Donald Lemons, allows courts across the state to resume hearings for evictions on June 29, the day after a temporary stay expires. A second order lets courts immediately resume eviction hearings that aren’t related to nonpayment of rent, such as if a tenant breaches the terms of their lease. Virginia Gov. Ralph Northam (D) had requested a pause on evictions for most of June while the state prepared a new rent relief program to help tenants who have lost income during the pandemic. That program has not yet been implemented. It’s not clear whether Northam will request another pause on evictions while the relief program is underway. Advocates for low-income renters say that the order is both surprising and disappointing, after Virginia’s Supreme Court had approved multiple delays for eviction cases as the public health crisis continues. The advocates say that they’re rushing to find ways to delay evictions for Virginians at immediate risk of homelessness. Some are continuing to encourage local sheriffs to delay issuing writs of eviction in areas with high COVID-19 rates, as well as communicating with landlords’ attorneys to ask whether their clients plan to pursue eviction proceedings during the pandemic.