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New Jersey's House members are urging the Biden administration and congressional leaders to include repeal of the cap on the state and local tax (SALT) deduction in the next coronavirus relief bill, The Hill reported. "Relief from the unfair and destructive SALT cap offers the precise breed of action our constituents, states, and localities will benefit from immediately," the lawmakers wrote in letters yesterday to Treasury Secretary Janet Yellen and to House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Charles Schumer (D-N.Y.). Every House member from New Jersey signed the letters, including the delegation's two Republican members: Reps. Chris Smith and Jeff Van Drew. Rep. Josh Gottheimer (D-N.J.) highlighted the letters at an event in the state yesterday. Former President Trump's 2017 tax-cut law created a $10,000 cap on the SALT deduction. Most GOP lawmakers support the cap and have highlighted studies showing that repealing it would primarily benefit high-income households. But politicians in high-tax states such as New Jersey, New York and California have been highly critical of the SALT deduction cap, arguing that it hurts their residents as well as their states' ability to provide robust services to residents.

The Small Business Administration’s third round of Paycheck Protection Program coronavirus relief lending has steadily grown to top 400,000 loans worth about $35 billion in its first two weeks as a persistent economic crisis means small businesses are still seeking help, the Washington Post reported. The government’s new phased approach to distributing the $284 billion in recently allocated PPP funds means it’s unlikely that the money will run out as it did in April. This time, the SBA gave a head start to smaller banks and those likely to serve low-income and minority communities. And it added a new set of automated compliance checks to prevent fraud and abuse of public funds, something that has created new safeguards but also led more applications to be rejected. Acting SBA administrator Tami Perriello said the agency wants to move faster while also carrying out necessary checks. When implementing the third round of funding, Congress put new limits on who could receive PPP loans, even as it approved hundreds of billions of dollars of new funding for the program. The first week of loan funding starting Jan. 11 was open only to “Community Financial Institutions,” which are typically better at lending to businesses in low-income areas. It was not until Jan. 19 that larger banks were allowed to participate. The rollout has not been without hiccups. In a letter Monday, the American Bankers Association pointed out several apparent glitches that the organization said “are preventing the program from fully supporting small businesses in need.”

Century-old department store chain Belk Inc. said that it would file for bankruptcy with a deal in hand with its lenders and private-equity owner Sycamore Partners to cut $450 million in debt through a fast-track chapter 11 filing, WSJ Pro Bankruptcy reported. Sycamore, Belk’s owner since 2015, and lenders including KKR & Co. and Blackstone Group Inc. have committed to invest $225 million to recapitalize the company under restructuring terms that would shrink its $2.6 billion balance sheet. Belk said it planned to complete the prepackaged bankruptcy by the end of February and allow Sycamore to retain its majority stake. “As the ongoing effects of the pandemic have continued, we’ve been assessing potential options to protect our future,” Belk CEO Lisa Harper said Tuesday. “We’re confident that this agreement puts us on the right long-term path toward significantly reducing our debt…to continue investing in our business, including further enhancements and additions to Belk’s omnichannel capabilities.” The deal reflects Sycamore’s commitment to bricks-and-mortar retailers even after a wave of bankruptcy filings hit the sector last year following the temporary shutdown of most nonessential shopping amid the coronavirus pandemic. With nearly 300 stores mostly in the Southeast, Belk generated $3.8 billion in revenue in the 12 months ended November, according to Moody’s Investors Service. Belk has been slowing down payments to suppliers to conserve cash, according to a person familiar with the matter. Under the bankruptcy plan, Belk suppliers will continue to receive payment in the ordinary course for all goods and services, allowing the company to continue normal operations, the company said.

The U.S. division of French beauty products maker L’Occitane International SA has filed for bankruptcy, behind on $15 million in rent and seeking to shed lease obligations after the COVID-19 pandemic cut into sales, WSJ Pro Bankruptcy reported. The U.S. unit L’Occitane Inc., which operates 166 boutiques in 36 states and Puerto Rico, filed a chapter 11 petition Tuesday in the U.S. Bankruptcy Court in Trenton, N.J., for the purpose of relieving itself of what it called increasingly untenable lease obligations. Like other retailers, L’Occitane has been hurt by the pandemic, which has made consumers less willing to shop in person, according to a declaration filed in bankruptcy court by Yann Tanini, regional managing director for L’Occitane. The company filed court papers seeking to reject 29 “burdensome” lease agreements and exit from those locations, where it said its rent obligations “no longer reflect the market.” L’Occitane joins the ranks of a growing number of retailers, from huge department-store chains such as J.C. Penney Co. to boutiques like Sur La Table Inc., to have filed for chapter 11 during the pandemic. Even before the onset of COVID-19, L’Occitane experienced a decline in sales at its bricks-and-mortar stores, while revenue from e-commerce increased, but the pandemic intensified the trend. The pandemic has forced L’Occitane to “more aggressively address the rapidly widening gulf between its brick-and-mortar retail revenue and its substantial lease obligations, which no longer reflect the market,” Mr. Tanini said. L’Occitane tried to renegotiate lease terms with its landlords in hopes of completing an out-of-court restructuring. Landlords were reluctant to offer concessions sufficient for the company to remain viable, according to Mr. Tanini.

Cici’s Holdings Inc., which operates and franchises the Cici’s Pizza buffet chain, and affiliated companies have filed for chapter 11 bankruptcy protection which involves the company’s sale to real estate company D & G Investors LLC, National Restaurant News reported. In Jan. 25 filings in the United States Bankruptcy Court for the Northern District of Texas, Cici’s said the company owned 12 Cicis Pizza locations and franchised approximately 306 others to 128 franchisees. It said the chain’s wide variety of pizza, pasta and salad bar offerings made it a popular venue for large family and other gatherings. “Moreover, CiCi’s asset-light business model, which is grounded in its franchise model and distribution system, historically enabled CiCi’s to generate significant free cash flow with low capital expenditure requirements,” it said. It added that in its 2019 fiscal year, it generated $14.2 million in adjusted EBITDA on revenue of around $177.3 million. As a result of the pandemic, however, accompanied by related government occupancy restrictions and a decrease in consumer demand, the company’s revenue declined to $76.3 million resulting in an adjusted EBITDA loss of $2.7 million. As of Dec. 11, 2020, Cici’s Holdings had a total debt of $81.64 million. At the time of the bankruptcy filing, a total of 214 restaurants had closed, of which 67 had closed permanently, including 6 company-owned locations.

The Consumer Financial Protection Bureau, the watchdog created after the 2008 financial meltdown and largely muzzled in the Trump era, is poised to start barking again. The agency will focus first on enforcing legal protections for distressed renters, student borrowers and others facing growing debt that its previous leadership has been lax about imposing during the pandemic, the Washington Post reported. But the CFPB — which President Biden has tapped 38-year-old Rohit Chopra to lead — is also likely to take an unprecedentedly tough line against industry giants it finds engaging in abusive practices, former agency officials advising the Biden team say. “It’s a matter of ramping back up,” said Richard Cordray, the CFPB’s first director, who stepped down in late 2017. The agency under Trump was “picking at odds and ends. They ramped down, and it’s a matter of changing direction.” That will mark a dramatic turn. Just last year, consumer complaints to the agency rose by 60 percent over 2019, agency data show, setting a new record as the economic crisis wiped out millions of jobs and pushed lower-income Americans to the brink. Yet the relief the agency secured for consumers topped out at less than $700 million, a fraction of the $5.6 billion it collected in 2015, its high watermark. Kathy Kraninger, a Trump appointee who resigned as director of the agency last week at President Biden’s request, signaled the outcome at the start of the pandemic. She said in late March financial companies would not face penalties for violating consumer protections in the Cares Act if they made “good-faith” efforts to comply.

Shares of videogame retailer GameStop Corp surged another 130% on Wednesday in pre-market trading as amateur investors continued to pile into the stock that has skyrocketed nearly 700% over the past two weeks, Reuters reported. The share spikes in GameStop and others including BlackBerry Ltd, headphone maker Koss Corp and Nokia Oyj, have sent short-sellers scrambling to cover losing bets, while raising questions about potential regulatory clampdowns. The top securities regulator in Massachusetts thinks trading in GameStop stock, which has jumped to $148 a share from $19.95 since Jan. 12, suggests there is something “systemically wrong” with the options trading surrounding the stock, Barron’s reported on Tuesday. GameStop, BlackBerry and Nokia were among the most heavily traded U.S. stocks before the bell, with analysts putting the moves partly down to herds of amateur investors chasing tips from Reddit discussion threads or the private Facebook group “Robin Hood’s Stock Market Watchlist”. “These are not normal times and while the (Reddit) r/wallstreetbets thing is fascinating to watch, I can’t help but think that this is unlikely to end well for someone,” Deutsche Bank strategist Jim Reid said. Trading in GameStop stock was halted for volatility nine times on Monday and five times on Tuesday. Short sellers in GameStop are down $5 billion on a mark-to-market, net-of-financing basis in 2021, which included $876 million of losses early Tuesday, according to analytics firm S3 Partners.

New York’s apartment investors are suddenly waist-deep in distress. By December, they were behind on $395 million of debt backed by mortgage bonds, almost 150 times the level a year earlier, according to Trepp data on commercial mortgage-backed securities, Bloomberg News reported. Tenants in rent-stabilized units owe at least $1 billion in rent and wealthier ones are fleeing the city, leaving behind vacancies and pushing newly-built luxury towers into foreclosure. For years, as crime dwindled and rent climbed in New York, investors gobbled up apartment buildings. But with the city’s economy and culture crushed by COVID-19, mounting job losses have derailed the gentrification boom and put financial pressure on landlords. “The people who specialize in mortgage workouts are the busiest people in New York real estate,” said Barry Hersh, a clinical associate professor of real estate at New York University. The developers who are in the most trouble pushed hard into Harlem and the Brooklyn hipster hubs of Crown Heights, Flatbush and Bushwick, squeezing out working-class residents by building new expensive units. Now, they’re grappling with eviction bans and new tenant protections as rent falls across New York.

President Joe Biden said he’s open to negotiate on his $1.9 trillion COVID-19 relief proposal, and is hopeful to bring Republicans behind it, though didn’t rule out pursuing a Democrat-only route, Bloomberg News reported. “I’m open to negotiate,” Biden said at a news conference on Monday. Still, he said “time is of the essence and I must tell you I’m reluctant to cherry pick and take out one or two items here.” Biden said that it would be up to lawmakers as to whether to use a budget-rule procedure in the Senate to forgo Republicans and proceed just with Democratic support. He also said that it won’t be clear if there’s a basis for agreement until the final stage of talks, which he anticipated in a “couple” of weeks. Senate Majority Leader Chuck Schumer (D-N.Y.) said yesterday that he aims to secure passage of the next round of COVID-19 relief by mid-March, just when jobless benefits from the last package will be running out. “We’ll try to get that passed in the next month, month and a half,” Schumer said with regard to pandemic aid on Monday, speaking on a call with New York City mass-transit advocates. A bipartisan group of senators, along with the Republican and Democratic leaders of a moderate group of House representatives, on Sunday questioned the White House on the basis for Biden’s $1.9 trillion stimulus proposal. Brian Deese, head of Biden’s National Economic Council, was pressed on the justification for the price tag of the plan, which would be the second-largest emergency spending package on record. GOP Senator Susan Collins of Maine said she’d suggest to the bipartisan group that it look at pulling together its own, more targeted, proposal.