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U.S. households reported their highest level of financial well-being since tracking began almost a decade ago and the gains were felt across all racial and ethnic groups, a Federal Reserve report released yesterday showed. The U.S. central bank's annual "Survey of Household Economics and Decisionmaking" also showed workers enjoying the benefits of working from home even as the recovery from the coronavirus pandemic continued, with little fervor to return to the office and general bullishness about the labor market. The report provides "valuable insight into Americans' financial conditions during the late fall of 2021," Fed Governor Michelle Bowman said in a statement. The report is based on responses from 11,000 adults in October and November of 2021, before a surge in COVID-19 cases due to the Omicron variant briefly dented economic growth but is in line with data revealing Americans in general have seen an improvement in their finances over the past two years. That is tied to a combination of pandemic-era direct cash payments and enhanced unemployment benefits that cushioned the economic blow of the pandemic on Americans in 2020 and part of 2021, rising asset prices, as well as a tight jobs market which is fueling strong wage gains. Fed officials added that the sharp rise in children attending in-person schools and the temporarily enhanced child tax credit passed earlier in 2021 also likely contributed. Some 78% of adults said they were living comfortably or doing "okay" financially, up from 75% in 2020 and the highest level since the survey began in 2013.

President Biden in the coming weeks is expected to decide whether to put forward a student-loan forgiveness plan aimed in part at motivating young voters to cast ballots in November’s elections, the Wall Street Journal reported. At the University of North Carolina, and in neighborhoods across the surrounding Research Triangle area, there are signs that whatever approach he takes could leave swaths of voters dissatisfied. Students and recent graduates with heavy debt loads worry that Mr. Biden’s plan will be too weak, after the president and his advisers signaled they are considering relief that could be far less than the $50,000-per-borrower sought by prominent Democrats. At the same time, voters who tightened their belts to pay off their loans or didn’t go to college say it would be unfair to make taxpayers subsidize school debt for Americans whose education can boost their earning power. A moratorium on student-loan payments that started at the onset of the COVID-19 pandemic is set to expire at the end of August just as the thick of the campaign season gets under way. Read more. (Subscription required.) 

The Congressional Black Caucus is requesting a meeting with President Joe Biden to press the case that cancelling student-loan debt is a racial equality issue, Bloomberg News reported. “This is a crisis created through policy decisions, and we have a responsibility to address it head-on,” Black Caucus Chair Joyce Beatty said in a statement Friday. “Canceling student loan debt is one of the most impactful ways to address ongoing economic and racial inequities plaguing our nation.” The caucus is the latest group of Democratic lawmakers seeking to put pressure on the president to use his executive authority to forgive at least some student loan debt ahead of the midterm elections. Progressive lawmakers, including Senator Elizabeth Warren and Representative Ayanna Pressley, have pushed Biden to cancel at least $50,000 in student loan debt per person. That figure is also supported by Majority Leader Chuck Schumer and Senator Raphael Warnock. Read more. 

Gov. Ron DeSantis (R) has vetoed legislation that would increases the maximum value of a motor vehicle that may be exempted from bankruptcy cases from $1,000 to $5,000, FloridaPolitics.com reported. The measure (CS/HB 265), sponsored by the House Civil Justice & Property Rights Subcommittee and Democratic Rep. Mike Gottlieb, cleared both the House and Senate chambers in unanimous votes. The legislation would have raised the exemption value of a debtor’s interest in a motor vehicle from $1,000 to $5,000 in bankruptcy cases. In his transmittal letter announcing his veto of the bill, DeSantis stated that the increased exemption amount should apply to processes outside of bankruptcy, too, in an effort to not incentivize bankruptcy. “Although it may be time to consider increasing the outdated exemption amount, this increase should apply to all persons who can claim Florida exemptions, whether in or out of bankruptcy, so that people are not incentivized to file for bankruptcy, which has long-lasting, negative consequences for a person’s credit history,” DeSantis wrote in the transmittal letter. Currently in Florida, a debtor has a constitutional right to exempt his or her homestead from creditors’ claims as long as the property is used as a primary residence, according to the bill analysis. If a debtor does not have a homestead, state law permits the debtor to exempt $4,000 of personal property in a bankruptcy proceeding. However, additional state exemptions include wages earned as a head of household, the cash surrender value of life insurance policies and annuity contracts, pension funds and exempt retirement accounts, and up to $1,000 of the debtor’s interest in a motor vehicle, which legislators sought to increase to $5,000.

More than a third of Americans reported difficulties to pay bills in the latest US Census Bureau household survey, showing how much of a toll the surge in consumer prices has taken on budgets, Bloomberg News reported. The share of respondents saying it has been somewhat or very difficult to pay for usual household expenses is now near its 2020 peak, at the worst of the COVID-19 pandemic. In cities including Los Angeles and Miami, more than 4 in 10 households reported having financial stress, according the household pulse survey for the April 27-May 9 period. The Census Bureau created the weekly survey at the onset of the pandemic to collect real-time data on how people’s lives have been impacted by Covid.

Americans with homes that are repeatedly flooded by extreme weather events could soon have the federal government buy their houses under a new bill introduced Thursday by Rep. Sean Casten (D-Ill.), The Hill reported. The bill would allow the National Flood Insurance Program (NFIP), the federal flood insurer of last resort, to buy houses and zones deemed indefensible in lieu of continually paying to repair them. “You’re not obligating people to move, but you’re saying like, you know … if you want to avail yourself with the NFIP program, we’re going to structure it toward a buyout rather than rebuilding,” Casten said. Casten, who worked on the bill with Rep. Earl Blumenauer (D-Ore.), says it aims to solve two problems: one serious, the other potentially catastrophic. More immediately, there’s looming the risk of bankruptcy of the NFIP, which is straining under the weight of ever more frequent and severe flood events. Congress paid $16 billion to bail the program out in 2018, and Congress proposed another $20 billion in 2021. That problem is only growing. Flood damage could rise more than 25 percent by 2050, putting an additional $8 billion at risk. And 14.6 million homes are at “substantial” risk of flooding, according to data from nonprofit First Street. Large investors like Blackstone and Bank of America and reinsurers like Swiss Re carry out their own quiet retreat from endangered lowland and coastal properties, while selling off those properties to less savvy investors — and counting on the NFIP to serve as a free backstop, Casten added. That creates the potential for a domino cascade of bankruptcies analogous to the Savings and Loan Crisis of the 1980s, which saw community banks and pension funds wiped out across the country. “You’re not seeing the Blackstones come in and buy,” Casten said. Flood-prone properties are instead getting spun off to groups like “you know, the local Cleveland, Ohio, firefighters pension fund.”

Consumers with low credit scores are falling behind on payments for car loans, personal loans and credit cards, a sign that the healthiest consumer lending environment on record in the U.S. is coming to an end, the Wall Street Journal reported. The share of subprime credit cards and personal loans that are at least 60 days late is rising faster than normal, according to credit-reporting firm Equifax Inc. In March, those delinquencies rose month over month for the eighth time in a row, nearing their prepandemic levels. Delinquencies on subprime car loans and leases hit an all-time high in February, based on Equifax’s tracking that goes back to 2007. Many people, including those with less-than-perfect credit, paid off debts and built up savings during the pandemic, a surprising outcome considering that lenders at first thought borrowers would default en masse when COVID-19 hit. The government’s response, including stimulus payments and child tax credits, boosted many families’ financial health. But now many of those benefits have run out. Subprime borrowers, who sometimes have lower incomes or less savings, are being hit hard. Inflation, running near its highest point in four decades, is also forcing many households to choose between paying for essentials and paying their monthly loans.