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Senate Republicans are proposing to beef up a “skinny” coronavirus relief package by more than 100 pages, including an enhanced deduction for charitable giving, $20 billion for farmers and ranchers and money for child care and stockpiling medical supplies, Roll Call reported. A vote on the package, which isn’t expected to advance over Democratic opposition, could come on Thursday, according to Senate Majority Leader Mitch McConnell. The Kentucky Republican said yesterday before introducing the revised bill that it would be “targeted” to the “very most urgent” needs facing Americans dealing with the continued pandemic fallout. "Senators will not be voting on whether this targeted package satisfies every one of their legislative hopes and dreams," McConnell said in floor remarks later on Tuesday. "We vote on whether to make laws, whether to forge a compromise, whether to do a lot of good for the country and keep arguing over the remaining differences later." McConnell also yesterday filed a motion to end debate on the underlying legislative vehicle, a measure which has already become law separately. Using a "shell" that has already passed both chambers enables the Senate to skip a procedural step and vote on cloture Thursday. An official price tag wasn’t available, but the new measure appears to contain more than $500 billion in assistance, which while larger than an earlier draft circulated last month would still be substantially shy of the $1 trillion July rollout that landed with a thud among Senate Republicans. Read more. 

In related news, a fresh U.S. Senate Republican coronavirus spending package introduced yesterday does not include new government assistance for U.S. airlines or airports, a text of the proposal showed, as the sector races to save jobs before October, Reuters reported. More than 35,000 workers at two of the largest U.S. carriers alone — American Airlines and United Airlines — are set to lose their jobs once an initial $25 billion in payroll support from the government expires this month. That has fueled a furious push by unions for a six-month extension of the aid, with flight attendants and other aviation workers planning to march outside the U.S. Capitol today. Last month a group of Senate Republicans backed extending $25 billion in payroll assistance for airlines, an idea Democrats also support. That proposal was excluded from the latest Senate measure, which was reviewed by Reuters and is expected to be voted on Thursday, but it is an opening salvo for talks that are expected to intensify once the U.S. House returns from recess next week. The Senate proposal also excludes $10 billion in assistance for airports that was part of an earlier Senate bill. Read more. 

Maine bankruptcy filings were down 50 percent in August from a year earlier and have been down nearly every month since the pandemic began, but experts expect that trend to reverse in the near future, the Portland Press Herald reported. A combination of government financial support, banks’ willingness to defer loan and interest payments, and a moratorium on evictions and foreclosures have kept most consumers and businesses afloat and out of insolvency. But as aid runs out, courts reopen and banks call in loans, bankruptcy experts forecast more people and companies will seek relief from insurmountable debt in the months ahead. “Now that the money has been cut off, you are going to see things become more difficult for people,” said James Molleur, who has bankruptcy law offices in southern Maine. “People do not tend to file for bankruptcy when things are getting worse; they file when they hit bottom. I don’t think we’re there yet.” Maine consumer bankruptcies year to date were down 14 percent in July from 2019, according to the American Bankruptcy Institute. The per capita rate of bankruptcies in Maine was the third-lowest in the country, according to institute statistics. Nationwide, bankruptcy filings are down 25 percent compared with a year ago. The number of businesses filing for chapter 11 bankruptcy has ticked upward this year, aided by changes to federal law that make it easier for small employers to restructure to resolve debt, said Jeremy Fischer, an attorney with Drummond Woodsum in Portland. Maine lenders’ willingness to work with borrowers to defer or modify loan payments is a major reason few consumers and businesses entered bankruptcy proceedings so far this year, Fischer said. But that leniency will not last forever. “Lenders are responsible to their owners just like every other business,” he said. “At some point, you can’t defer payments on most of your loans or the bank will have trouble.” Maine’s relative success at curbing widespread virus outbreaks means businesses did not have to shut down again after being allowed to reopen this spring and early summer. But operating outdoors will become more challenging as late autumn and winter set in, putting extra stress on struggling small businesses, said Andrew Helman, co-chairman of the bankruptcy practice at Murray Plumb and Murray in Portland. If another federal economic stimulus package doesn’t emerge, Helman foresees more business closures and a cascade effect of lost rent payments and property values. “As government assistance dries up and commercial activity fails to return to the normal baseline before COVID-19, we will start to see impacts,” he said.

JPMorgan Chase & Co. says that it’s probing the role of some employees who may have enabled misuse of Covid-relief funds in what it calls potentially illegal activities, Bloomberg News reported. The New York-based bank said that it has seen “instances of customers misusing Paycheck Protection Program Loans, unemployment benefits and other government programs” and that some “employees have fallen short, too,” according to a memo to staff yesterday from the bank’s senior leaders. The firm said that the conduct doesn’t meet its principles “and may even be illegal.” “We are doing all we can to identify those instances and cooperating with law enforcement where appropriate,” according to the memo. The bank asked workers to report any conduct that violates its policies. JPMorgan’s investigation could be another sign that misconduct around the slew of coronavirus relief programs went beyond the scattered individual borrowers who have been charged with fraud. A congressional report last week raised red flags on more than $1 billion of loans in the Small Business Administration’s PPP program. JPMorgan was the biggest lender in that effort, which offered a lifeline to businesses reeling from shutdowns tied to the pandemic but has caused headaches for banks. The $669 billion program was the centerpiece of the federal coronavirus relief package enacted in March and allowed small businesses to apply for a loans of as much as $10 million each. 

The Senate Banking Committee will hold a hearing today at 10 a.m. ET titled "The Status of the Federal Reserve Emergency Lending Facilities." Scheduled witnesses include Hal Scott, the president of the Committee on Capital Markets Regulation, Jeffrey D. DeBoer, president and CEO of The Real Estate Roundtable and Hon. William Spriggs Professor Of Economics, Chief Economist Howard University, AFL-CIO. Click here to view the prepared testimony and view a live webcast of the hearing. 

It has been a prolonged period of retail carnage: Storied names declaring bankruptcy, mass-market brands closing thousands of stores, tens of thousands of shop employees furloughed or laid off, garment workers in dire straits. For Jamie Salter and David Simon, however, it has been a time of great opportunity, the New York Times reported. Salter is the founder and chief executive of the Authentic Brands Group, a company known for buying the intellectual property of famous brands at discount prices and then striking licensing deals with other companies that want to stick those well-known names on their products. Simon is the chief executive of the Simon Property Group, the largest mall operator in the U.S. with more than 100 properties including Twin Cities Premium Outlets in Eagan, Albertville Premium Outlets in Albertville, Southdale Center in Edina and Miller Hill Mall in Duluth. Together, they are reshaping the American retail landscape. Last week, they closed a deal to buy the bankrupt Brooks Brothers, the 202-year-old American fashion brand and retailer, for $325 million. Last month, they acquired Lucky Brand denim, and in February, they bought Forever 21. Together, the acquisitions will bring the global revenue generated by the company’s brands — a sprawling mix that includes Sports Illustrated and rights tied to Marilyn Monroe’s likeness — to $15 billion annually. And Salter is hunting for more. Many of the acquisitions are being made through a joint venture with Simon called SPARC, for Simon Properties Authentic Retail Concepts. Its roots go back to 2016, but it was created in its present form in January as a vehicle that turned out to be almost perfectly positioned to take advantage of the current state of the industry.

U.S. consumer borrowing rose in July for a second month, reflecting an increase in non-revolving credit such as auto loans as the economy reopened more broadly and spending picked up, Bloomberg News reported. Total credit advanced $12.2 billion from the prior month after an upwardly revised $11.4 billion June gain, Federal Reserve figures showed yesterday. The median estimate in a Bloomberg survey of economists called for a $13 billion increase. The bounce back in consumer borrowing is in line with recent increases in retail sales, particularly purchases of motor vehicles. Still, consumer sentiment remains weak, and the expiration of the additional $600 of unemployment benefits could impact spending and borrowing in the coming months. Revolving, or credit-card debt, declined $293 million, marking the fifth straight decline. Non-revolving debt, which also includes school loans, rose $12.5 billion. Lending by the federal government, which is mainly for student loans, rose just $1.8 billion before seasonal adjustment. Total consumer credit for the month expanded an annualized 3.6 percent after growing 3.3 percent in June. The Fed’s report doesn’t track debt secured by real estate, such as home mortgages.

Las Vegas Monorail Co., a transit system financed with municipal debt that serves some of the city’s marquee hotels, filed for bankruptcy for the second time in just over a decade after the coronavirus pandemic shut down service, WSJ Pro Bankruptcy reported. The nonprofit transit system is proposing a quick bankruptcy sale to the Las Vegas Convention and Visitors Authority for about $24 million, a fraction of the roughly $650 million cost of construction, according to papers filed on Monday in the U.S. Bankruptcy Court in Las Vegas. The bulk of the purchase price — roughly $22 million — would cover the monorail’s debt, held entirely by municipal-bond investor Preston Hollow Capital LLC. The monorail, which opened in 2004, filed for bankruptcy for the first time in 2010 after ridership fell short of expectations. The previous bankruptcy wiped out most of the project’s debt, over $600 million in tax-exempt bonds sold in 2000.

Climate change poses a “slow motion” systemic threat to the stability of the U.S. financial system requiring urgent action from financial regulators, including the Federal Reserve and the Securities Exchange Commission, Reuters reported. That is one of the findings of a landmark report commissioned by the U.S. Commodity Futures Trading Commission and put together by a panel convened about 10 months ago by Rostin Behnam, one of two Democrats on the five-member CFTC. The panel’s 35 members, including representatives of Goldman Sachs Group Inc., BP Plc, the Dairy Farmers of America, and The Nature Conservancy among others, approved the report yesterday. “The physical impacts of climate change are already affecting the United States, and ... the transition to net-zero emissions may also impact many segments of the economy,” the 196-page report said. “Both physical and transition risks could give rise to systemic and sub-systemic financial shocks, potentially causing unprecedented disruption in the proper functioning of financial markets and institutions.” A sudden shift in perceptions of the risks from frequent wildfires and intense hurricanes could bring a sudden drop in asset prices, for instance, that cascades through a community and spill more broadly into markets, the report said. And because the COVID-19 pandemic has depleted household wealth, government budgets and business balance sheets, the economy is more vulnerable than before, it added, “increasing the probability of an overall shock with systemic implications.”

U.S. passenger airline traffic continues to rebound over historic lows after the coronavirus pandemic, but is still down sharply over 2019 levels, Reuters reported. The U.S. Transportation Department said yesterday that airlines carried 21.4 million passengers in July, up from 16.5 million in June, but still down 73 percent over July 2019 levels. On Friday, the Transportation Security Administration screened 968,673 people at airport checkpoints, the highest daily number since March 16 but still down more than 60 percent over 2019 levels.