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The Federal Trade Commission is investigating whether Visa Inc. and Mastercard Inc.’s security tokens restrict debit-card routing competition on online payments, the Wall Street Journal reported. The FTC for the past few years has already been probing whether Visa and Mastercard block merchants from routing payments over other debit-card networks. The networks acknowledged an FTC probe in regulatory filings in recent years. In recent months, the FTC expanded its focus to routing challenges that stem from the networks’ security tokens, the people familiar with the matter said. It couldn’t be determined if the investigation is a new probe or part of the previous one. Visa and Mastercard are by far the two biggest card networks in the U.S., building and maintaining the plumbing that allows Americans to use credit and debit cards at stores and online. Their lion’s share of that market has drawn increasing scrutiny from regulators and fueled tension with merchants, which pay fees set by the networks when a customer pays via card. A Justice Department investigation on whether Visa has unlawfully maintained a dominant market share in debit cards is ongoing. Federal law requires that merchants have the ability to choose from at least two unaffiliated debit-card networks to route transactions. That is supposed to give merchants the option to send debit-card payments over the network that sets lower fees.

The Attorney General’s Office is asking a federal judge to overturn a bankruptcy court ruling that some legal experts say could harm New Hampshire homeowners who fall into debt, the New Hampshire Union Leader reported. New Hampshire state law establishes a “homestead right,” stating: “Every person is entitled to $120,000 worth of his or her homestead, or of his or her interest therein, as a homestead.” Bankruptcy attorneys say that protection typically has been doubled for married couples, to $240,000. However, in June, the chief judge in U.S. Bankruptcy Court, Bruce Harwood, ruled that the husband of a Merrimack woman seeking bankruptcy protection was not entitled to a homestead exemption because he is not on the deed to the family’s home. The bankruptcy trustee had objected to the homeowner’s claim of a second homestead exemption for her husband, and Harwood agreed. “Because the Debtor’s spouse is not an owner of the property, he is not entitled to claim an exemption,” he wrote in his opinion. “The couple is not allowed to ‘double-dip’ and claim $240,000 as exempt,” he wrote. Nashua attorney Leonard Deming, who represents the homeowner, has appealed that decision to the U.S. District Court in Concord.

Housing costs shifted into overdrive last month and risk becoming an enduring source of U.S. inflation, Bloomberg News reported. Rent of shelter and owners’ equivalent rent each accelerated 0.8% in September from the prior month, the most since 1990. according to Labor Department data released Thursday. Both measures posted record 6.7% advances on an annual basis. That contributed to the biggest year-over-year increase in overall shelter costs, which also includes hotel stays and tenants’ and household insurance, since 1982. Housing makes up about a third of the overall basket of consumer prices, which rose last month by more than forecast. It comprises an even larger share of the so-called core CPI, which also exceeded estimates. The report cited shelter, along with food and medical care, as being among the largest of “many contributors” to the broad advance in September.

President Joe Biden on Tuesday signed a bill allowing couples who combined their student loans when they were married to separate the debt, opening up the possibility for some of these borrowers to have part of their debt forgiven, USA Today reported. In 2006, Congress eliminated a program that allowed married couples to merge their student debt into a joint loan in exchange for a lower interest rate and single payment. Through the program, couples became legally responsible for each other’s debt. But the terms of the joint loans prevented borrowers from severing their debts — even in cases of domestic violence, economic abuse, or divorce — and excluded them from access to debt relief, such as Biden’s student loan forgiveness plan, Public Service Loan Forgiveness or payment programs that lower monthly payments based on income. The act allows borrowers to split their loans based on the initial amount each owed into two separate federal direct loans that will have the same interest rates as the joint consolidation loan. Borrowers must apply through the Education Department, which requires both parties to approve the separation. But those who show evidence that they have experienced domestic violence, economic abuse, or have an unresponsive partner, are able to apply themselves.In June, the Senate unanimously approved the Joint Consolidation Loan Separation Act with bipartisan support. The House passed the bill in September with a 232-193 vote — with 14 Republicans voting in favor. The bill was introduced by Sen. Mark R. Warner (D-Va.) and Rep. David E. Price (D-N.C.).

U.S. households predicted last month a sharp pullback in spending plans over the next year, in a report that also found moderating expectations for near-term inflation, the Federal Reserve Bank of New York said yesterday, Reuters reported. The bank said that its September Survey of Consumer Expectations survey found that respondents projected their spending will rise by 6% over the next year, a sharp drop from the 7.8% rise predicted in the August survey. The bank noted that decline in spending expectations was the biggest since the survey began in 2013. On the inflation front, households said they were expecting a moderation in near-term price pressure but an increase in price pressures over the longer-run horizon. The survey found that the public sees inflation at 5.4% a year from now, down from 5.7% in August. The September reading was the lowest in a year, the bank said. Three years from now, however, inflation was seen at 2.9%, up from August’s 2.8% reading, while five-year-ahead expected inflation stood at 2.2%, up from the 2% projection seen in the August survey.

A small-business advocacy group has filed a new lawsuit seeking to block the Biden administration’s efforts to forgive student loan debt for tens of millions of Americans — the latest legal challenge to the program, the Associated Press reported. The suit, filed Monday by the Job Creators Network Foundation, argues the Biden administration violated federal procedures by failing to seek public input on the program. It’s one of a handful of lawsuits that have been filed by conservative business groups, attorneys and Republican lawmakers in recent weeks as the Biden administration tries to push forward with its plan to cancel billions in debt before November’s midterm elections. Elaine Parker, president of Job Creators Network Foundation, slammed the program as executive overreach and complained that it does nothing to address the root cause of rising debt: the “outrageous increase in college tuition that outpaces inflation every single year.” The new lawsuit is one of a growing number of legal challenges trying to halt the proposal laid out by President Joe Biden in late August to cancel up to $20,000 in debt for certain borrowers. Six Republican-led states filed suit late last month, accusing the Biden administration of overstepping its executive powers, as did the Pacific Legal Foundation, a Sacramento, California, legal advocacy group. Their lawsuit, filed in federal court in Indiana, calls the plan an illegal overreach that would increase state tax burdens for some Americans who get their debt forgiven. Meanwhile, a federal judge in Wisconsin last week dismissed a lawsuit from a local taxpayers group, the Brown County Taxpayers Association, that sought to block the program, ruling that the group didn’t have standing to bring the lawsuit.

House Judiciary Committee Chairman Jerrold Nadler (D-N.Y.) and Rep. David N. Cicilline (D-R.I.), Chair of the Subcommittee on Antitrust, Commercial, and Administrative Law, last week introduced a bill that would give Americans overwhelmed by student loan debt the option of obtaining meaningful bankruptcy relief, according to a press release. The "Student Borrower Bankruptcy Relief Act of 2022" proposes to eliminate the section of the Bankruptcy Code that makes private and federal student loans nondischargeable, allowing these loans to be treated like nearly all other forms of consumer debt. "This legislation updates the federal bankruptcy code to ensure student loan debt is treated like almost every other form of consumer debt that can be discharged during bankruptcy,” said Chairman Nadler. Prospects for consideration in the House are favorable, but overall passage would be challenging given the narrow Democratic majority in the Senate and short amount of time left in the congressional session. Read the full press release.

For the latest legislative developments on bankruptcy and debt, be sure to visit the “Legislative News” section in the ABI Newsroom.