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As an eviction crisis has seemed increasingly likely this summer, everyone in the housing market has made the same plea to Congress: Send money — lots of it — that would keep renters in their homes and landlords afloat, according to a New York Times commentary. City officials have called for such rent relief. So have landlord associations, tenant advocates, legal aid lawyers, housing researchers, public health experts and economists. Now millions of renters have been covered by a national eviction moratorium, an unprecedented order by the Centers for Disease Control and Prevention to help control the coronavirus pandemic. But there is still no money, according to the commentary. Congress has yet to adopt a new aid package that includes broad rent relief. It hasn’t passed any other cash assistance lately either. Expanded unemployment benefits, worth $600 a week, expired at the end of July, along with a more limited eviction moratorium. There have been no new stimulus checks. And additional unemployment benefits created by executive action by President Trump have not yet reached many workers. That means that while the new order has halted most evictions through the end of the year, there remains no mechanism to cover what those tenants cannot pay — or to control the cascading consequences when rent dries up, according to the commentary. Tenants will still be on the hook for all this unpaid rent when the moratorium expires Dec. 31. And landlords in the meantime may find it increasingly hard to make repairs and cover the mortgage. For this reason, even advocates cheering the moratorium call it a half measure. And landlord groups warn it could destabilize the housing market even more.

An appeals court has sided with borrowers who sought to discharge private student loans after filing for bankruptcy, a win for consumers trying to cancel their shares of roughly $50 billion in private educational debt, WSJ Pro Bankruptcy reported. Monday’s ruling by the U.S. Court of Appeals for the Tenth Circuit centers on a couple, Byron and Laura McDaniel, who sought chapter 13 bankruptcy relief in Denver for debts including about $200,000 of student loans owed to private lender Navient Solutions LLC. Unlike other types of personal debt, most types of student loans are nearly impossible to discharge even in bankruptcy, including government-backed loans. But the appellate court said the type of private loan issued by Navient — which didn’t meet the Tax Code’s definition of a qualified student loan — doesn’t enjoy the same protections against cancellation. The McDaniels’ debts can be discharged without the borrowers showing “undue hardship,” the high bar that must be cleared before bankruptcy courts will forgive most types of student loans, according to the ruling. The ruling rejected Navient’s claim that the McDaniels’ roughly $200,000 in student loans constituted “an obligation to repay funds received as an educational benefit,” a designation that would have protected the debt from being wiped out in bankruptcy. Pamela Foohey, a professor at Indiana University’s Maurer School of Law, said the decision represents one way that courts “can chip away at the lore that all student loans are effectively not dischargeable.” The ruling applies to borrowers of private student loans that aren’t deemed “qualified” under Internal Revenue Service regulations. To be qualified, student loans must be issued to borrowers who attend certain accredited schools, must not exceed the cost of attendance and cannot be for students taking less than six credits a semester.

Relying on a public health law intended to prevent the spread of an illness, the Trump administration said yesterday that it is implementing a national four-month moratorium on residential evictions, USA Today reported. The moratorium, announced by the Centers for Disease Control and Prevention, was the latest measure by the administration to get a handle on the economic fallout from the coronavirus pandemic absent an agreement with Congress on a more far reaching package that would have the force of law. To stop evictions, health officials are relying on the 1944 Public Health Service Act, which gives the administration broad quarantine powers. The moratorium, which will run through Dec. 31, applies to individuals earning less than $99,000 a year and who are unable to make rent or housing payments. The move drew a mixed reaction from housing experts: praise that it would potentially keep tens of millions of Americans in their homes but concern that it only moves back a deadline, potentially setting people up for evictions next year because they would continue to accrue back payments during the pause in evictions. It’s also not clear how the move affects landlords, who must continue to make their own payments. Read more. 

In related news, California’s legislature passed a bill late on Monday granting renters who are financially affected by the COVID-19 pandemic a reprieve from evictions, which were set to resume today when prior relief expires, the Wall Street Journal reported. The bill passed with supermajorities in both houses of the Democratic-controlled legislature in the final hours of its two-year legislative session and addresses what advocates had said was a looming wave of evictions. Democratic Gov. Gavin Newsom, who crafted the compromise with legislative leaders, tenant advocates and landlord groups last week, immediately signed the bill into law. It takes effect immediately. Backers say it will help keep California’s 17 million renters housed as the state’s economy remains largely closed during the pandemic. The measure would forestall until Feb. 1 evictions for tenants who declare that they have lost income due to the impact of COVID-19 on the economy. All back rent owed by the tenant from March 1 through Aug. 31 of this year would be converted to consumer debt and couldn’t be used as grounds for eviction. To receive continued protection, a tenant would have to pay at least 25 percent of their cumulative rent between Sep. 1 and Jan. 31. The remaining balance would also become consumer debt, which landlords could pursue in small-claims court starting March 1 of next year. Even the bill’s strongest supporters said it was only a stopgap that leaves tenants treading water financially unless and until the federal government provides additional stimulus funds to keep families and landlords afloat. Read more. (Subscription required.) 

Treasury Secretary Steven Mnuchin said yesterday that the Trump administration and Senate Republicans have been in regular contact over possible coronavirus relief measures and the Senate’s top Republican will “hopefully” unveil a new bill next week,  Reuters reported. Asked about the collapse of talks with Democrats over aid legislation, Mnuchin said that he and White House Chief of Staff Mark Meadows have been speaking regularly with Senate Republican leader Mitch McConnell. “Hopefully Mitch will enter new legislation next week,” Mnuchin said. No negotiations on another round of coronavirus aid have taken place since early August, when talks collapsed as Congressional Democrats and the Republican Trump administration could not bridge a gap of more than $1 trillion between their proposed relief packages for small businesses, state and local governments, school districts and health care providers. Trump has since signed an executive order extending expired supplemental unemployment benefits and deferring some payroll taxes, but details on implementation have been uncertain. Mnuchin is due to testify today before the Democrat-controlled House Select Subcommittee on the Coronavirus Crisis on the administration’s economic response. Republicans who control the U.S. Senate have discussed proceeding with their own legislation that would be narrower than the House’s $3 trillion plan approved in May, but thus far have not introduced any new proposals. Some Republicans oppose new aid out of concern for a massive and growing budget deficit predicted to approach $4 trillion this year. 

COVID-19’s economic impacts, from job losses to business closures and relief measures, have disproportionately affected Black Americans as much as the virus itself. And if history is any guide, even the lifeline of bankruptcy may be ill-equipped to give most pandemic-ravaged Black debtors a fresh start, according to a Bloomberg Law analysis. Dozens of academic studies over more than three decades have concluded that Black debtors file for bankruptcy disproportionately more than other racial groups, yet get less permanent relief. A 2017 analysis — co-authored by now-U.S. Rep. Katie Porter (D-Calif.) — found Black filers half as likely as other groups to permanently eliminate their debts, no matter which type of personal bankruptcy case they filed. Now, pandemic-fueled disparate impacts threaten to make relief even more difficult. Although personal filings haven’t spiked, and in fact have dropped since the pandemic began, attorneys expect the reprieve to last only as long as government help. The Black jobless rate was stuck at 14.6 percent in July, despite declining for all other groups and dropping to 10.2 percent overall. Studies have found that the majority of Black Americans seeking personal bankruptcy have chosen to restructure their debts under chapter 13, rather liquidate under chapter 7, even though the latter is used more than twice as often overall. “When you look at the national figures, there’s no question that something is going on,” said John Rao, an attorney at the National Consumer Law Center. “African Americans who have fewer assets and lower income are filing chapter 13s at a higher rate than whites, and that doesn’t make sense.” The Final Report of the American Bankruptcy Institute’s Commission on Consumer Bankruptcy, which devoted a chapter to racial justice in bankruptcy, recommended that Congress authorize collection of race and ethnicity information as part of the petition process.

The Federal Emergency Management Agency said that 40 states are now signed up to provide their residents with an extra $300 or $400 in unemployment, the New York Times reported. The benefit was originally envisioned by President Trump as an extra $400 to unemployed workers, with the federal government providing $300 and the states providing $100. But states balked at the additional cost, and now the states’ standard unemployment benefit is counted as their contribution. Workers who are not eligible for at least $100 in unemployment will not receive the additional benefit. So far, only three states, Kentucky, Montana and West Virginia, have decided to supply the extra $100. Vermont’s plan to bring the total payment to $400 is awaiting approval from the state’s legislature. South Dakota’s governor has said the state will not apply. That leaves nine other states that have either not applied or have not been approved: Delaware, Illinois, Kansas, Nebraska, New Jersey, Nevada, North Dakota, Wisconsin and South Carolina. Delaware, Illinois, New Jersey, Nevada, North Dakota, South Carolina and Wisconsin say they have applied or will apply. Kansas says that it has applied and intends to supply the extra $100 to bring the total payment to $400. Most states won’t be able to start paying the benefit until mid-September or even October. And the payments are expected to last only four or five weeks.

A new survey released today by Gallup and West Health found that nearly half of Americans in the COVID-19 era fear a health-related incident could drive them into bankruptcy, UPI.com reported. Gallup and West Health said 50 percent of respondents said they're concerned about medical bankruptcy -- a 5 percent increase from early this year, before the pandemic. That concern rose 12 points among U.S. adults between 18 and 29 and non-White Americans. The study found that 15 percent of respondents said at least one person in their home currently has medical debt that will not be repaid in the next 12 months. "Those in households earning less than $40,000 per year are more than four times as likely as those in households earning $100,000 or more to be carrying long-term medical debt (28% vs. 6%, respectively)," Gallup added.

COVID-19 patients' care is supposed to be covered under a program President Trump announced this spring as the coronavirus pandemic was taking hold, the New York Times reported. “This should alleviate any concern uninsured Americans may have about seeking the coronavirus treatment,” Trump said in April about the program, which is supposed to cover testing and treatment for uninsured people with COVID-19, using money from the federal coronavirus relief package passed by Congress. The program has drawn little attention since, but a review of payments made through it, as well as interviews with hospital executives, patients and health policy researchers who have examined the payments, suggest the quickly concocted plan has not lived up to its promise. It has caused confusion at participating hospitals, which in some cases have mistakenly billed patients who should be covered by it. Few patients seem to know the program exists, so they don’t question the charges. And some hospitals and other medical providers have chosen not to participate in the program, which bars them from seeking any payment from patients whose bills they submit to it. Large numbers of patients have also been disqualified because COVID-19 has to be the primary diagnosis for a case to be covered (unless the patient is pregnant). Since hospitalized Covid patients often have other serious medical conditions, many have other primary diagnoses. At Jackson Health in Miami, for example, only 60 percent of uninsured COVID-19 patients had decisively met the requirements to have their charges covered under the program as of late July, a spokeswoman said.