%1

Lawmakers say they are close to an agreement to provide billions in new coronavirus relief, set to be tied to a massive government funding bill, The Hill reported. Congress is expected to include at least $15 billion in response to the Biden administration's request for new funding for COVID-19 vaccines, treatments and testing. Getting a deal on the funds would remove a significant hurdle for passing a government funding bill by Friday night, when lawmakers have to pass legislation or spark a shutdown. Sen. Roy Blunt (R-Mo.), who has been involved in drafting the bill, said that they were drafting it to include $15 billion. But that number isn’t locked in, with leadership debating adding more money. Sen. John Thune (S.D.), the No. 2 Senate Republican, appeared skeptical that it would balloon to $22.5 billion, noting that it wasn’t currently “trending” in that direction. “I don’t think the number is going to get that high, but then it could,” he said. Republicans had balked last week over the administration’s request for $22.5 billion, which Democrats had wanted to be emergency spending, meaning it wouldn’t have to be paid for. But lawmakers and two leadership aides told The Hill on Monday that they had reached an agreement for the coronavirus funding to be paid for. Thune pointed to unspent state and local government funds that were included in previous coronavirus relief measures as a source for much of the new money in the omnibus bill.

The House Financial Services Committee will hold a hearing today titled "The Inflation Equation: Corporate Profiteering, Supply Chain Bottlenecks, and COVID-19." To view the witness list and access a link to the live webcast of the hearing, please click here.

U.S. consumer borrowing rose in January at the slowest pace in a year as households paid down credit-card balances that swelled during the holiday-shopping season, Bloomberg News reported. Total credit increased $6.8 billion from the prior month after a revised $22.4 billion gain in December, Federal Reserve figures showed Monday. On an annualized basis, borrowing rose 1.9%. Revolving credit outstanding, which includes credit cards, fell $218.7 million, the first decline since April. Two months earlier, revolving credit jumped a record $21 billion. Non-revolving credit, which includes auto and school loans, rose $7.1 billion.

Unpaid medical bills became a bigger concern during the pandemic, and now, a federal consumer agency is considering whether those debts should be banned from consumer credit reports, the New York Times reported. Rohit Chopra, director of the Consumer Financial Protection Bureau, discussed the agency’s plans this week after pointing out new research by the bureau on medical debt and its effect on Americans. The report found that 20 percent of American households say they have medical debt. It also estimated that more than half (58 percent) of the debt that appears on credit reports as being in collection stems from medical bills, a proportion that Mr. Chopra deemed “extraordinary.” “Having a medical debt collection mark on a credit record can make it harder to get credit, rent or buy a home or find a job,” Mr. Chopra said. “Families are pushed into bankruptcy by medical debts that they cannot pay.” Black and Hispanic people, as well as low-income and younger adults, have higher rates of medical debt than the overall population, the report noted. As a result, the agency will be “scrutinizing” the three major credit reporting bureaus — Equifax, Experian and TransUnion — and their handling of medical debt to make sure it is accurately reported in consumer files, Mr. Chopra said.

Americans with student loans are about to get a stark wake-up call on their borrowings as government relief programs phase out, according to a blog post by the Federal Reserve Bank of St. Louis, Bloomberg News reported. While federal stimulus programs have kept many low-to-moderate income households afloat during the pandemic, most student-loan payments are scheduled to resume after May 1. That will usher in a transition period of consumer-debt relief in which defaults are poised to rise, the regional Fed bank said. “Serious delinquency rates for student debt could snap back from historic lows to their previous highs in which 10% or more of the debt was past due,” Lowell Ricketts, a data scientist for the Institute for Economic Equity at the St. Louis Fed, said in the post. Most borrowers have been financially stronger during the pandemic thanks to government-relief programs, the New York Fed said in a separate report Tuesday. Median credit scores were higher for all income groups as of the third quarter of 2021 compared with before the pandemic, it said in its report, based on data derived from Equifax. Bankruptcies also declined substantially. However, student-loan default rates remain more than three times higher among borrowers in low- and moderate-income areas than their wealthier counterparts. Low-wage workers lost jobs at five times the rate of middle-wage workers in 2020, while high-wage employment increased, the report said.

The Consumer Financial Protection Bureau (CFPB) yesterday released a report highlighting the complicated and burdensome nature of the medical billing system in the U.S., according to a CFPB press release. The report reveals that the U.S. healthcare system is supported by a billing, payments, collections, and credit reporting infrastructure where mistakes are common, and where patients often have difficulty getting these errors corrected or resolved. “When it comes to medical bills, Americans are often caught in a doom loop between their medical provider and insurance company,” said CFPB Director Rohit Chopra. “Our credit reporting system is too often used as a tool to coerce and extort patients into paying medical bills they may not even owe.” The CFPB's report details how medical bills are often incurred through unexpected and emergency events, are subject to opaque pricing, and involve complicated insurance or charity care coverage and pricing rules. In emergency situations, patients might not even sign a billing agreement until after receiving treatment. In other instances, patients, including those with chronic illnesses or who are injured or ill, may desperately feel that the need for medical care forces them into accepting any costs for treatment. he report describes challenges and sources of confusion when a person’s medical bills go into collection or are placed on a credit report. Bills may be sent to collectors by doctors, hospitals, parent companies, or groups representing a service provider, so there may be multiple charges for the same visit. The total billed amount can quickly become unrecognizable, and the time and effort needed to parse legitimate charges from inaccurate ones can become unmanageable. Click here to read the report.

The Consumer Financial Protection Bureau (CFPB) is moving to thwart illegal repossessions in the heated auto market. A compliance bulletin issued today reveals conduct observed during CFPB examinations and enforcement actions, including the illegal seizure of cars, sloppy record keeping, unreliable balance statements, and ransom for personal property, according to a CFPB press release. “With today’s high car prices, auto lenders and investors might be tempted to seize vehicles for resale in the hot used car market,” said CFPB Director Rohit Chopra. “No American ever wants to wake up to see their car stolen. Auto loan servicers need to ensure that every repossession is lawful.” In recent months, there has been extremely strong demand for used automobiles. Due to the global chip shortage, the average list price for new and used automobiles has spiked. The CFPB is concerned that these market conditions might create incentives for risky auto repossession practices, since repossessed automobiles can command higher prices when resold. The CFPB also expects that both the total amount of debt and the average loan size will continue to increase. Even when inventory shortages abate, larger car loans will put pressure on household budgets for much of the next decade.

U.S. consumer spending increased more than expected in January, offering the economy a strong boost at the start of the first quarter, but price pressures continued to mount, with annual inflation surging at rates last experienced four decades ago, Reuters reported. Growth prospects were further brightened by other data on Friday showing solid demand by businesses for equipment last month. The reports from the Commerce Department suggested underlying strength in the economy that could sustain the expansion as the Federal Reserve starts raising interest rates to quell inflation, and provide a shield against the fallout from Russia's invasion of Ukraine. The first rate hike from the U.S. central bank is expected next month. Economists are anticipating as many as seven rate increases this year. Morgan Stanley boosted its first-quarter GDP growth estimate to a 5.4% annualized rate from a 3.8% pace. The economy grew at a 7.0% rate in the fourth quarter.