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Top Democrats announced yesterday that they had reached agreement on an expansive $3.5 trillion budget blueprint, including plans to pour money into addressing climate change and expanding Medicare among an array of other Democratic priorities, that they plan to advance alongside a bipartisan infrastructure deal, the New York Times reported. Combined with nearly $600 billion in new spending on physical infrastructure contained in the bipartisan plan, which omits many of Democrats’ highest ambitions, the measure is intended to deliver on President Biden’s $4 trillion economic proposal. The budget blueprint, expected to be dominated by spending, tax increases and programs that Republicans oppose, would pave the way for a Democrats-only bill that leaders plan to push through Congress using a process known as reconciliation, which shields it from a filibuster. To push the package — and the reconciliation bill that follows — through the evenly divided Senate, Democrats will have to hold together every member of their party and the independents aligned with them over what promises to be unified Republican opposition. It was not clear if all 50 lawmakers in the Democratic caucus, which includes centrists unafraid to break with their party like Senator Joe Manchin III of West Virginia and Senator Kyrsten Sinema of Arizona, had signed off the blueprint. The package is considerably smaller than the $6 trillion some progressives had proposed but larger than some moderates had envisioned.

Rep. Zoe Lofgren (D-Calif.) and Rep. Ken Buck (R-Colo.) yesterday introduced H.R. 4193, the "Bankruptcy Venue Reform Act of 2021," to require that chapter 11 bankruptcy proceedings take place where the principal place of business or principal assets of the corporation are located, according to a press release. The bill's aim is to ensure that the employees, small businesses, and local communities that are most impacted by a chapter 11 bankruptcy are able to fully and fairly participate in proceedings, according to Lofgren and Buck. “Justice is best served when corporate bankruptcies are adjudicated locally, with convenient court access for employees, retirees, and local creditors and a judge who knows the affected community,” said Rep. Lofgren. "Our bill will require corporations filing chapter 11 bankruptcy to go through those proceedings in the forum they are primarily located rather than running off to a court across the country," said Rep. Buck. "This will eliminate companies’ ability to tilt the scale of justice and ensure the case is heard in a court familiar with all the affected stakeholders.” The Bankruptcy Venue Reform Act of 2021 bill text is linked here.

Relief programs created during the COVID-19 pandemic provided many Americans with pauses on their largest debts, particularly mortgages and student loans. Other people came to agreements with auto loan and credit card lenders about payment. This relief helped many people survive, freeing up money to pay for necessities. But forbearance does not equal forgiveness, according to a commentary in The Hill written by Profs. Pamela Foohey of the Benjamin N. Cardozo School of Law, Dalié Jiménez of the University of California, Irvine School of Law and Christopher K. Odinet of the University of Iowa College of Law. People will have to face the debt obligations that come with mortgages, auto loans, credit cards and student loans. Yet in the interim, people have faced persistent unemployment and depleted what little savings they may have had. Many will likely be unable to resume all of their regular debt payments. And people who did not need forbearance during the pandemic may find themselves in danger of defaulting on their debts, according to the commentary. The pandemic disproportionately harmed communities of color, particularly Black women. Given these households’ pre-existing wealth disparities, Black Americans and other minorities are likely to bear the brunt of the economic fallout of the pandemic, according to the commentary. Part of this fallout will be a need to ask their lenders for loan modifications. The professors are calling on the Consumer Financial Protection Bureau (CFPB) to use its authority to prevent what we term modification failures. This is when a borrower’s ability to repay is intentionally, negligently, or merely inattentively not taken into account during loan modification discussions. The CFPB has the authority to identify abusive acts or practices by a wide-range of financial institutions, including issuers and servicers of certain auto loans, credit cards and other installment or revolving loans. It can issue a compliance and enforcement bulletin directing loan servicers to make a reasonable determination that a borrower has the ability to make all required, scheduled payments in connection with any modification. Read more.

*The views expressed in this commentary are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI.

Congress yesterday overturned a set of regulations enacted in the final days of the Trump administration that effectively allowed payday lenders to avoid state laws capping interest rates, the Associated Press reported. The House voted 218-208 to overturn the Office of the Comptroller of the Currency’s payday lending regulations, with one Republican voting with Democrats. Yesterday's vote to overturn the OCC’s “true lender rules” marked the first time Democrats in Congress successfully overturned regulations using the Congressional Review Act. The act was enacted in the mid 1990s and gives Congress the authority to overrule federal agency rules and regulations with a simple majority vote in the House and Senate. Its powers are limited to a certain period after an agency finalizes its regulations, usually around 60 legislative days. The Senate had voted to overturn the OCC rules on May 11, in a vote of 52-47. The bill now goes to President Joe Biden, who is expected to sign it.

A bipartisan senators’ group working on a $1 trillion infrastructure compromise more than doubled in size to 21 members on Wednesday, a key threshold that gives momentum to their effort as President Joe Biden returns from overseas at a pivotal time for his big legislative priority, the Associated Press reported. Biden told reporters he had yet to see the emerging proposal from the group but remained hopeful a bipartisan agreement could be reached, despite weeks of on-again, off-again talks over his more robust $1.7 billion American Jobs Plan. “I’m still hoping we can put together the two bookends here,” Biden said as he prepared to depart Geneva after attending a summit of European leaders. The administration dispatched top White House advisers for back-to-back meetings on Capitol Hill while the president was away. Biden and his Democratic allies in Congress are proceeding on a two-track strategy — seeking a bipartisan bill while preparing to go it alone if Republicans try to block the investments with a filibuster in the Senate. The administration officials huddled late Wednesday in the Capitol basement with the Democratic senators in the bipartisan group, grinding through details of the proposal. On Tuesday, the White House team shored up restless House Democrats eager for momentum on a shared domestic priority with the president.

A bipartisan senators’ group working on a $1 trillion infrastructure compromise more than doubled in size to 21 members on Wednesday, a key threshold that gives momentum to their effort as President Joe Biden returns from overseas at a pivotal time for his big legislative priority, the Associated Press reported. Biden told reporters he had yet to see the emerging proposal from the group but remained hopeful a bipartisan agreement could be reached, despite weeks of on-again, off-again talks over his more robust $1.7 billion American Jobs Plan. “I’m still hoping we can put together the two bookends here,” Biden said as he prepared to depart Geneva after attending a summit of European leaders. The administration dispatched top White House advisers for back-to-back meetings on Capitol Hill while the president was away. Biden and his Democratic allies in Congress are proceeding on a two-track strategy — seeking a bipartisan bill while preparing to go it alone if Republicans try to block the investments with a filibuster in the Senate. The administration officials huddled late Wednesday in the Capitol basement with the Democratic senators in the bipartisan group, grinding through details of the proposal. On Tuesday, the White House team shored up restless House Democrats eager for momentum on a shared domestic priority with the president.

Lawsuits brought by white business owners challenging a policy that prioritized applicants for pandemic relief grants on the basis of gender and race have thrown the federal government’s Restaurant Revitalization Fund into turmoil, the New York Times reported. Tens of thousands of applicants who expected an easier path through the $28.6 billion aid program are now stuck in limbo, and nearly 3,000 restaurant owners whose grants were approved have been told they can’t be paid. The money is running out fast: The program has distributed $27.5 billion to about 100,000 applicants, an agency official said on Monday. When Congress created the Restaurant Revitalization Fund in March, lawmakers ordered the Small Business Administration, which runs the program, to include a 21-day exclusivity period. During that time, only applications from women, military veterans and “socially and economically disadvantaged” individuals — defined by the agency as those from certain racial and cultural groups who also had limited financial means — would be approved. Others could file their applications, but had to wait to have their requests reviewed. The fund began taking applications on May 3 and was soon overwhelmed. More than 362,000 businesses applied, seeking $75 billion — nearly three times what Congress had allocated. Little, if any, money would have been left for applicants outside the priority groups. Some restaurant owners sued, claiming that the priority period was discriminatory. Several judges agreed, prompting the agency to alter its approach. In court filings on Friday, the agency said it had — in late May, in response to the legal actions — stopped payment on priority applications. The 2,965 people whose approvals were revoked will be paid only “once it completes processing all previously filed non-priority applications, and only then if the R.R.F. is not first exhausted,” the agency said. Other applicants who expected to be part of the priority queue — tens of thousands of them, according to industry groups — are stalled, waiting to hear if they’ll be approved. About 72,000 of the applicants who have already been paid were covered by the priority process, Patrick Kelley, the head of the agency’s Capital Access office, said on Monday. They received $18 billion of the $27.5 billion that has been handed out.