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A federal appellate court announced Thursday that it would review a decision finding that the structure of the Consumer Financial Protection Bureau is unconstitutional, temporarily undoing an earlier decision that said the president is allowed to fire the agency's director at will, the <em>Washington Examiner</em> reported yesterday. The U.S. Court of Appeals for District of Columbia Circuit said that the full court would rehear the case, <em>PHH Corporation, et al v. CFPB</em>, which has major implications for the future of consumer financial regulation under the administration of President Trump. In October, a three-judge panel had ruled that the bureau's single-director set-up was unconstitutional. The bureau's current director, Richard Cordray, is an Obama appointee who has advanced regulations opposed by Republicans. GOP members of Congress have called on Trump to fire and replace Cordray, as Trump could do at will if the previous ruling holds up. Oral hearings before the full court are set for May 24.

CoreLogic released data yesterday showing that the number of foreclosures completed in December fell 40 percent from a year earlier, NationalMortgageNews.com reported. There were a total of 21,000 completed foreclosures in December, down from 36,000 the year before, according to CoreLogic. The national foreclosure inventory was 329,000 in December, representing a 30 percent drop from 467,000 homes in 2015. Overall, 0.8 percent of all homes with a mortgage were in foreclosure in December, down from 1.2 percent the previous year. The number of mortgages in serious delinquency, which CoreLogic defines as 90 days or more past due including loans in foreclosure or REO, fell by 19.4 percent year over year to 1 million mortgages, which equates to 2.6 percent of all mortgaged properties. This is the lowest number of homes in serious delinquency since August 2007, but some parts of the country were experiencing more defaults than others. "While the decline in serious delinquency has been geographically broad, some oil-producing markets have shown the effects of low oil prices on the housing market," Frank Nothaft, chief economist for CoreLogic, said in a news release. "Serious delinquency rates rose in Louisiana, Wyoming and North Dakota, reflecting the weakness in oil production."

The experience of being crushed by student debt is no longer limited to the young as new federal data shows that millions of Americans who are retired or nearing retirement face this burden, according to a New York Times editorial yesterday. Americans age 60 and older are the fastest-growing age group of student loan debtors. Older debtors are more likely to default on the federal loans and when that occurs, as happens with nearly 40 percent of such borrowers who are 65 and over, the government can seize a portion of their Social Security payments — even if it pushes them into poverty. About 20,000 Americans over the age of 50 in 2015 had their Social Security checks cut below the poverty line because of student loans, with poverty-level benefits falling even further for 50,000 others, according to a recent report by the Government Accountability Office. A report issued last month by the Consumer Financial Protection Bureau shows that the number of Americans aged 60 and older with student loan debt has grown fourfold over the last decade, to 2.8 million in 2015 from about 700,000 in 2005. The average amount owed by these borrowers has nearly doubled, to $23,500. Read the full editorial. 

Now available in the ABI Bookstore: Pick up your copy of the updated and revised Graduating with Debt: Student Loans under the Bankruptcy Code, Second Edition! 

Defense attorneys say that a new strategy is emerging by lenders and plaintiffs lawyers: sue to foreclose on government-guaranteed home loans under various defaults, then fast-track these suits by filing motions for orders to show cause, the Law.com reported on Friday. These motions shift the burden of proof to the borrower, requiring them to appear in court and explain why a judge shouldn’t grant final judgment against them. “All of a sudden, we saw a spate of foreclosures where the mortgage companies alleged the seniors no longer lived in the home,” said Gladys Gerson, supervising attorney for Coast to Coast Legal Aid of South Florida’s senior unit. “This has been happening around the state.” About a dozen similar cases reached Gerson and other attorneys at Coast to Coast, who have helped a growing number of low-income seniors fight and win dismissals despite aggressive lender litigation.

A judge ruled that a Georgia woman didn’t have “any legal duty” to pay for her daughter’s college tuition bill before declaring bankruptcy, deepening the fracture between judges on whether financially struggling parents can help their children pay for college, the Wall Street Journal Bankruptcy Law Blog reported yesterday. In a Jan. 31 opinion, Judge Edward Coleman III ruled that Skidmore College could keep $57,836 in tuition that Leslie Kyrin Dunston paid, but he disagreed with the upstate New York school’s lawyers that parents who are on the verge of bankruptcy should be able to pay a child’s tuition bill. While Dunston “may have felt a moral obligation to pay” for her daughter’s education at Skidmore College, she didn’t benefit economically from those payments, he said in his opinion filed to U.S. Bankruptcy Court in Savannah, Ga. The finding makes Judge Coleman the latest judge to weigh in on the fairness of what are called tuition-clawback lawsuits, which are growing in number as the cost of college rises. Read more. (Subscription required.) 

Now available in the ABI Bookstore: Pick up your copy of the updated and revised Graduating with Debt: Student Loans under the Bankruptcy Code, Second Edition! 

American consumer credit climbed less than forecast in December, closing out the smallest annual increase in household borrowing since 2013, Bloomberg News reported yesterday. The $14.2 billion advance last month followed a revised $25.2 billion jump in the prior month, Federal Reserve figures showed Tuesday. For all of 2016, borrowing increased 6.4 percent. While consumer debt was restrained in December by a smaller advance in credit-card balances, revolving debt last year increased by the most since 2007. Non-revolving credit, which includes loans for cars and education, continued to climb on a monthly basis although it cooled in 2016. Revolving debt, which includes credit cards, rose by $2.4 billion following an $11.8 billion increase, the Fed’s report showed. Non-revolving debt, such as that for college tuition and the purchase of vehicles and mobile homes, climbed $11.8 billion after a $13.4 billion increase.

A federal judge has discharged rapper 50 Cent's bankruptcy case after he paid more than $22 million, the Associated Press reported yesterday. Bankruptcy Judge Ann Nevins approved the discharge Thursday in Hartford, Connecticut. The rapper who burst onto the music scene in 2003 with his debut album, "Get Rich or Die Tryin," filed for chapter 11 reorganization in 2015, citing debts of $36 million and assets of less than $20 million. Nevins approved a plan in July calling for 50 Cent, whose real name is Curtis Jackson III, to pay back about $23 million. Jackson's lawyers said yesterday that he paid off the five-year plan early with $8.7 million of his own money and $13.65 million he received in a recent settlement of a legal malpractice lawsuit against other attorneys.

Financial regulators have ordered Mastercard and UniRush to pay $13 million in payments and fines for leaving tens of thousands of customers unable to access their own money through prepaid cards, The Hill reported yesterday. The Consumer Financial Protection Bureau (CFPB) action is in response to a breakdown of the companies’ RushCard system. The reloadable prepaid debit card is advertised as a way for consumers to get their paychecks and other direct deposits on their card “up to two days sooner.” But the CFPB said the system went down in October 2015 when Mastercard switched its processing platform, a move the companies spent 13 months preparing for. As a result, the bureau said that customers were left without access to the funds stored on their cards for days and, in some cases, weeks. Deposits for more than 45,000 customers were delayed and transactions were declined because Mastercard failed to provide UniRush with accurate information about account balances. The companies have been ordered to pay customers $10 million in restitution and another $3 million in civil penalties.