%1

Visa Inc.’s total U.S. payments volume fell at a much slower pace in May from the previous month, indicating that consumer spending was picking up as the government starts to ease coronavirus-induced lockdowns, Reuters reported. U.S. payments volume in May dropped to 5 percent, compared with an 18 percent fall in April. Quarter-to-date, Visa posted an 11 percent drop in payments volume, the company said in a filing yesterday. Cross-border volumes, excluding intra-Europe transactions, that drive its international transaction revenue, tumbled 45 percent in May, while global processed transactions fell 12 percent. Travel related cross-border volumes declined 78 percent last month while cross-border e-commerce continued to grow strongly and was up 18 percent in May, the company added.

President Trump vetoed a bipartisan resolution on Friday to overturn new regulations that significantly tighten access to federal student loan forgiveness, siding with Education Secretary Betsy DeVos over veterans’ organizations that say her rules will harm veterans bilked by unscrupulous for-profit colleges, the New York Times reported. The veto will allow stringent rules for students seeking loan forgiveness to take effect on July 1. The rules toughen standards established under the Obama administration for student borrowers seeking to prove their colleges defrauded them and to have their federal loans erased. Even if some borrowers can show they were victims of unscrupulous universities, they could be denied relief unless they can prove their earnings have been adversely affected. The resolution “sought to reimpose an Obama-era regulation that defined educational fraud so broadly that it threatened to paralyze the nation’s system of higher education,” Trump said in his veto statement. “The Department of Education’s rule strikes a better balance, protecting students’ rights to recover from schools that defraud them while foreclosing frivolous lawsuits.” It was the president’s eighth veto. Veterans groups said that the rule failed to protect military service members who have long been the targets of predatory tactics by colleges because of their lucrative G.I. benefits.

A class-action lawsuit filed on Friday is accusing the Trump administration of illegally seizing student loan borrowers' tax refunds even after Congress halted government debt collection amid the coronavirus pandemic, The Hill reported. The lawsuit filed in federal court in Washington by the groups Student Defense and Democracy Forward accuses Treasury Secretary Steven Mnuchin and Education Secretary Betsy DeVos of defying Congress's mandate and seizing money that student loan defaulters desperately need. The lawsuit was filed on behalf of Kori Cole, a Colorado woman whose family tax refund of nearly $7,000 was seized in April to go towards her defaulted student loans. The Department of Education can request that the Department of Treasury offset tax refunds for those who owe money on their student loans, and the federal government has agreements with most states that allow them to offset state tax refunds as well. But under the CARES Act signed into law in March, the Treasury Department was forbidden from conducting any involuntary debt collection until September, including seizing any tax refunds. In March, after President Trump declared a national emergency over the pandemic, DeVos ordered a halt to tax refund offsets and for $1.8 billion that had been seized from borrowers to be returned. It's not entirely clear how many student loan borrowers are still having their refunds offset, but the lawsuit cites a statistic on the Treasury Department's website that appears to show that it has collected $18.8 million from about 11,000 tax refunds since April 1.

The U.S., already wrestling with the economic challenges brought on by the COVID-19 pandemic, is on the precipice of a compounding crisis of evictions, as protections and payments extended to millions of people out of work begin to run out, the New York Times reported. The fallout is predicted to be devastating for the nation’s renters, who entered the pandemic with lower incomes, significantly less in savings and housing costs that ate up more of their paychecks. They also were more likely to work in the industries where job losses have been particularly severe. Many have been scraping by thanks to temporary government assistance and emergency orders that put many evictions on hold. But evictions will soon be allowed in about half of the states, according to Emily A. Benfer, a housing expert and associate professor at Columbia Law School who is tracking eviction policies. “I think we will enter into a severe renter crisis and very quickly,” Professor Benfer said. Without a new round of government intervention, she added, “we will have an avalanche of evictions across the country.” In many places, the threat has already begun. The Texas Supreme Court recently ruled that evictions could begin again. In the Oklahoma City area, sheriffs apologetically announced that they planned to start enforcing eviction notices this week. And a handful of states had few statewide protections in place to begin with, leaving residents particularly vulnerable as eviction cases stacked up.

Fraudsters are increasingly using pilfered credit-card numbers and phishing attacks to prey on overwhelmed consumers and banks during the coronavirus pandemic, the Wall Street Journal reported. There has been a big jump in attempted credit- and debit-card fraud since coronavirus shut down the U.S. economy earlier this year, according to Fidelity National Information Services Inc., known as FIS, which assists about 3,200 U.S. banks with fraud monitoring. The dollar volume of attempted fraudulent transactions rose 35 percent in April from a year earlier, FIS said, a trend that appears to be continuing in May. Most of the fraudulent transactions were caught before they hit cardholders’ accounts, FIS said, but the spike in attempts presents another challenge for consumers and their lenders muddling through the worst economic crisis since the Great Depression. Credit-card purchases have fallen over the past two months, and millions of out-of-work borrowers have stopped making their monthly payments. A rise in successful fraud attempts could lead to higher losses for card issuers and, ultimately, higher costs for consumers.

President Trump and top Republican lawmakers are mounting fresh opposition to extending enhanced unemployment benefits to the millions of Americans who are still out of work, even as the administration prepared to release new jobless figures today that illustrate the ongoing devastation wrought by the novel coronavirus, the Washington Post reported. The reluctance by the White House and top GOP leaders drew sharp rebukes from congressional Democrats, who argue that the coronavirus outbreak threatens to further ravage the U.S. workforce unless the government authorizes additional aid. Their clash could intensify in the next six weeks, as policymakers stare down a July deadline while the country’s labor market is expected to only worsen. More than 36 million Americans already have sought unemployment benefits over eight weeks, the Labor Department reported in its most recent update, with many more expected to join their ranks in the agency’s imminent report. At issue is the enhanced unemployment aid that Congress approved in late March, which includes an extra $600 in weekly payments to out-of-work Americans. On Tuesday, President Trump articulated his reluctance to extend those benefits during a closed-door lunch with Senate Republicans, many of whom share his concern that the expanded federal payments deter people from returning to work. The enhanced benefits expire in July. Top congressional Republicans signaled support for paring back these benefits during a meeting on Tuesday attended by Vice President Pence, Treasury Secretary Steven Mnuchin, Senate Majority Leader Mitch McConnell (R-Ky.) and House Minority Leader Kevin McCarthy (R-Calif.). Party leaders also agreed to delay another round of coronavirus aid for three to four weeks.

Millions of people are behind on their credit-card and auto-loan payments, the latest sign of the coronavirus pandemic’s financial devastation, the Wall Street Journal reported. Lenders in April had nearly 15 million credit cards in “financial hardship” programs, such as deferral programs that let borrowers temporarily stop making payments, according to estimates by credit-reporting firm TransUnion. That accounts for about 3 percent of the credit-card accounts the company tracks, TransUnion said yesterday. Nearly three million auto loans were in these hardship programs, accounting for about 3.5 percent of those tracked. The numbers have surged from a year ago, when 0.03 percent of credit cards and about 0.5 percent of auto loans were in financial-hardship programs. The spike in unemployment caused by the coronavirus has strained people’s ability to make their monthly debt payments. To make matters worse, Americans were tapping credit cards and auto loans at record levels even before the pandemic to deal with rising costs and stagnant incomes.

Santander Consumer USA Inc. has reached a $550 million deal with nearly three dozen states to settle charges of predatory auto lending to low-income and subprime borrowers, the Wall Street Journal reported. The settlement, announced yesterday, resolves charges that one of the largest subprime auto lenders in the U.S. made loans borrowers couldn’t afford to repay. The states also claim that Santander failed to monitor dealers that falsified borrowers’ incomes and other information when submitting loan applications. “Over the last several years, we have strengthened our risk management across the board — improving our policies and procedures to identify and prevent dealer misconduct, and tightening standards to ensure affordability,” Santander said in a written statement. Thirty-three states and the District of Columbia accused Santander of extending loans that were too big relative to borrowers’ incomes, charging excessive fees and failing to monitor dealership loan-approval practices. The settlement includes $65 million of restitution for consumers. It also involves some $433 million in loan forgiveness, including for customers who have had cars repossessed but still owe money to Santander. The lender also agreed to waive balances for customers who have very low credit scores and who had stopped paying their loans as of the end of last year.

Consumer Financial Protection Bureau Director Kathy Kraninger said that she is pressing ahead with a revised payday lending rule despite criticism from Senate Democrats who accused the CFPB’s political appointees of interfering with the rule-making process, according to a letter obtained by Morning Consult from Sen. Sherrod Brown’s (D-Ohio) office. “Upon my determination, the Bureau will issue a final rule on the basis of the record before the agency,” Kraninger wrote in the letter, dated Monday. “And upon that basis, I will defend the agency’s action.” The letter answers one dated May 4 sent by Brown, the Senate Banking Committee’s ranking member, Sen. Elizabeth Warren (D-Mass.) and other Senate Democrats that asked the CFPB to stop work on revamping an Obama-era payday lending rule that would unwind a provision that requires lenders to determine if borrowers have the ability to repay a loan. The agency had expected to revise the rule by the end of April, but it hasn’t yet been issued. The rule-making process drew fresh scrutiny from the Democratic senators after The New York Times reported April 29 that a career economist at the agency had alleged in a memo that political appointees at the agency had manipulated the agency’s research to support the revamp of the 2017 payday lending rule. The memo also said Trump administration appointees had pressured staff economists to alter their findings to underplay harm to consumers if the payday rule was changed.