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U.S. households’ debt-to-income and debt-to-asset ratios in the first quarter fell to their lowest levels since the early 2000s, the Wall Street Journal reported today. A prolonged period of low rates have made that debt easier to bear: The Federal Reserve this week reported that households’ overall debt-service ratio — the share of after-tax income going toward debt payments — are near historic lows. But Americans face financial obligations beyond debt payments, such as rents and auto leases, and these are taking a bigger bite out of pay. Indeed, the Fed report shows the share of income going toward non-debt financial obligations is sitting near its highest level since the 1980s. It is a development that particularly for households at lower income levels may be crimping spending. Commerce Department figures show the homeownership rate fell to its lowest levels in over a half-century in the years since the financial crisis, and it doesn’t look likely to recover anytime soon. That has tightened the supply of rental units, pushing rents up 18 percent over the past five years, according to the Labor Department, even as inflation away from housing has been nearly nonexistent.

An Orlando businessman, Ishrat Rehmetullah, is citing the Fifth Amendment against self-incrimination while arguing in federal bankruptcy court that he shouldn’t have to disclose all of his assets, the Orlando Sentinel reported yesterday. Rehmetullah and his wife, Shama, filed a personal bankruptcy in 2014, citing almost $800,000 in debts, which included a $572,000 foreclosure on his home in Dr. Phillips. The debts were discharged and the case was closed. But the case was reopened in 2015 when some creditors alleged that Rehmetullah had attempted to flee the country, and had failed to report a collection of gold coins, diamonds and real estate he owns in Karachi, Pakistan; those allegations were detailed in a filing by a court-appointed trustee assigned to the case, Richard Webber. Webber recently sought a judge’s order requiring Rehmetullah to report additional assets. Instead of complying, or denying the allegations, Rehmetullah’s attorney filed a response saying that reporting additional assets could violate his client’s Fifth Amendment rights.

The government’s consumer watchdog is adding its voice to a growing chorus of warnings about problems with a federal program that permits people who take public service jobs to have their student loans forgiven after a decade, the New York Times reported today. Confusing rules, bureaucratic tripwires and outright errors are hindering thousands of people as they try to take advantage of the program, according to a report released yesterday by the Consumer Financial Protection Bureau. These are people who teach, serve in the military or work for a nonprofit organization, for example. The volume of complaints is especially alarming because the program has not yet reached its first milestone: forgiving debts. Created in 2007, the program requires borrowers to do 10 years of service before any federal student loan debt is eliminated. The first wave of qualifying borrowers can submit applications in October. But hundreds of complaints in the last year indicate many applicants are encountering obstacles, the agency said. Read more. 

In related news, Federal Reserve chairwoman Janet Yellen weighed in on one of the more contentious financial policy debates in Congress in a private conversation, a lawmaker said yesterday, and suggested that Congress should change the way that the Consumer Financial Protection Bureau is funded, the Washington Examiner reported today. Currently, the consumer agency is funded by Yellen's agency, which earns income through its portfolio of government bonds. Republicans critical of the agency's mission have argued that the arrangement prevents them from exercising authority over the bureau by controlling its spending. However, Rep. Blaine Luetkemeyer (R-Mo.) said yesterday that Yellen had questioned that arrangement during a recent conversation with him over breakfast. Read more. 

The Consumer Financial Protection Bureau (CFPB) is asking the public to comment on some proposed changes to its rules for prepaid cards, The Hill reported today. Under the proposed changes, a consumer would have to register their prepaid card in order to dispute unauthorized charges and take advantage of the full slate of consumer protections provided by the rules. The bureau is also trying to make it easier for consumers to link traditional credit cards to digital wallets that can hold funds. Under the CFPB’s proposal, neither the linked traditional credit card nor the digital wallet would be subject to requirements for “hybrid prepaid-credit cards” — those that allow consumers to borrow funds — such as the required 30-day waiting period to link the account to the wallet.

A yearlong investigation by USA TODAY found that port trucking companies in southern California have spent the past decade forcing drivers to finance their own trucks by taking on debt they could not afford. Companies then used that debt as leverage to extract forced labor and trap drivers in jobs that left them destitute. If a driver quit, the company seized his truck and kept everything he had paid towards owning it. If drivers missed payments, or if they got sick or became too exhausted to go on, their companies fired them and kept everything. Since 2010, at least 1,150 port truck drivers have filed claims in civil court or with the California Department of Industrial Relations’ enforcement arm, known as the labor commission. Judges have sided with drivers in more than 97 percent of the cases heard, ruling time after time that port truckers in California can’t legally be classified as independent contractors. Instead, they are employees who, by law, must be paid minimum wage and can’t be charged for the equipment they use at work.

Wells Fargo faces new accusations that it tried to capitalize financially on its customers without their permission — this time by allegedly modifying mortgage terms for people who had filed for bankruptcy protection, USA Today reported today. With the smoke still lingering from the firestorm that erupted from the bank's opening of fake consumer accounts, Wells was hit with multiple lawsuits alleging that the bank surreptitiously extended loan lengths, potentially costing some homeowners tens of thousands of dollars. The bank pulled off a "virtual hijacking" with the alleged scam by implementing "illegal stealth modifications" in at least 100 cases across the country, plaintiffs attorneys said in court papers filed on June 7 in the U.S. Bankruptcy Court for the Western District of North Carolina, where they are hoping to assemble a class-action group. Wells Fargo spokesman Tom Goyda said the bank "strongly denies the claims" because the company clearly identified "modification offers" in letters to customers, their attorneys and the respective bankruptcy courts.