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CFPB CITES PROBLEMS WITH CREDIT CARDS, MORTGAGES AND CREDIT REPORTS



The Consumer Financial Protection Bureau (CFPB) reported yesterday that it is finding problems with credit cards, credit bureau reporting and mortgages, CongressDaily reported today. Specifically, the CFPB said that it found that credit card holders under the age of 21 were raising their credit limits without the consent of their co-applicants, inaccurate information reported to credit bureaus was causing consumers to be charged too much or denied credit, and clear mortgage disclosures with proper rates and timely information regarding payments was not being provided to homeowners. The bureau said that the findings have prompted a compliance review and sparked fines totaling $435 million in refunds to 5.7 million consumers. Click here to read the CFPB's fall summary report.

COMMENTARY: AFTER BAILOUT, LARGE BANKS ALLOWED TO DOMINATE THE MORTGAGE BUSINESS



The broken mortgage market is the unintended consequence of the banking bailout and the regulatory response in the aftermath of the financial crisis, according to a commentary in the New York Times yesterday. In the third quarter, both Wells Fargo and JPMorgan Chase reported that they earned robust profits from the mortgage business. It would be foolish to blame Wells Fargo and JPMorgan for this situation, according to the commentary, but the government allowing takeovers without forcing weak competitors to get healthy quickly leads to an oligopoly. Instead, the two companies’ main competitors, Citigroup and Bank of America, are pulling out. Read the full commentary.

OBAMA SUGGESTS "SECRETARY OF BUSINESS" IN A SECOND TERM



President Barack Obama signaled that if he wins a second term, he would appoint a Secretary of Business to oversee newly consolidated government agencies, including the Small Business Administration, the Wall Street Journal reported on Tuesday. "We should have one Secretary of Business, instead of nine different departments that are dealing with things like giving loans to SBA or helping companies with exports," Obama said on Monday. Read more. (Subscription required.)

COMMENTARY: "TOO BIG TO FAIL" REMAINS VERY REAL



While it is tempting to think that very large financial institutions are no longer too big to fail thanks to the Dodd-Frank Act and regulation, this idea is completely at odds with the facts, according to an op-ed by Prof. Simon Johnson of the M.I.T. Sloan School of Management in Monday's New York Times. In a high-profile paper prepared recently at the behest of the Securities Industry and Financial Markets Association, the lobbying group for the securities industry, Federal Financial Analytics Inc., argues that "too big to fail" has effectively been ended. In theory, “too big to fail” should have been removed by the recent reforms or eliminated by the passage of time. But as a practical matter — looking at what investors really believe — “too big to fail” is still with us, according to Johnson. This implicit government guarantee lowers the funding costs for very large financial institutions because investors are convinced that debt issued by these firms is less risky than, for example, debt issued by small and medium-size banks. In effect, the government is providing a form of insurance that encourages financial institutions to become even bigger — and thus even more likely to be protected by some combination of the Federal Reserve, the Treasury and other agencies. This is an unfair, nontransparent government subsidy that encourages excessive risk-taking, according to Johnson, and creates a very large potential downside for the nonfinancial side of our economy. Read the full op-ed.

HURRICANE SANDY ESTIMATED TO COST INSURERS UP TO $20 BILLION



Hurricane Sandy may cost the insurance industry up to $20 billion, which would put this week's devastating storm second only to 2005's Hurricane Katrina for insured losses, according to a new damage estimate, the Wall Street Journal reported today. Disaster-modeling firm Eqecat Inc. said insured losses likely range from $10 billion to $20 billion and said that the total cost of the storm, including damage that was not insured by private companies, would be between $30 billion and $50 billion. In addition, the closure of major roads, tunnels and the New York City subway system are likely to drive claims higher, the firm said. Read more. (Subscription required.)

TRANSCRIPT OF CHAPTER 11 COMMISSION’S 10/17 HEARING NOW AVAILABLE



A full transcript of ABI's Chapter 11 Reform Commission’s hearing on 10/17 at the LSTA Conference in New York is now available. The transcript can be downloaded by clicking here.

The next public hearing will be Saturday from noon-2 p.m. ET at the 24th Annual TMA Annual Conference in Boston. For future Commission hearings, please click here.

MEMBERS ENCOURAGED TO WEIGH IN ON REAPPOINTMENT OF BANKRUPTCY JUDGE JUDITH WIZMUR



The current 14-year term of office for Judith H. Wizmur, U.S. Bankruptcy Judge for the District of New Jersey at Camden, is due to expire on Sept. 4, 2013. The U.S. Court of Appeals for the Third Circuit is considering the reappointment of the judge to a new 14-year term of office. Members of the bar and the public are invited to submit comments for consideration by the Court of Appeals regarding the reappointment of Bankruptcy Judge Wizmur. All comments should be directed to one of the following addresses: by e-mail at Wizmur_Reappointment@ca3.uscourts.gov or by mail to the Office of the Circuit
Executive, 22409 U.S. Courthouse, 601 Market St., Philadelphia, PA 19106-1790.
Comments must be received no later than noon on Monday, December 3, 2012.

ABI IN-DEPTH

LATEST CASE SUMMARY ON VOLO: SHAFFER V. U.S. DEPARTMENT OF EDUCATION (IN RE SHAFFER; 8TH CIR.)



Summarized by William Joanis of JoanisLaw

The Eighth Circuit ruled that the debtor met the burden of proving by preponderance of evidence that educational loans were discharged on basis of undue hardship. The court employed a "totality of circumstances" test (i.e., past, present and future resources, reasonableness of living expenses, and other relevant facts, etc.). While the court noted that each loan needed to be evaluated separately, this issue was not properly raised on appeal.

There are nearly 700 appellate opinions summarized on Volo, and summaries typically appear within 24 hours of the ruling. Click here regularly to view the latest case summaries on ABI’s Volo website.

NEW ON ABI’S BANKRUPTCY BLOG EXCHANGE: RECAP OF DISCUSSIONS AT THE NCBJ ANNUAL CONFERENCE



The Bankruptcy Blog Exchange is a free ABI service that tracks 35 bankruptcy-related blogs. A recent blog post highlights some of the topic discussions from the panels at last week's NCBJ annual meeting.

Be sure to check the site several times each day; any time a contributing blog posts a new story, a link to the story will appear on the top. If you have a blog that deals with bankruptcy, or know of a good blog that should be part of the Bankruptcy Exchange, please contact the ABI Web team.

ABI Quick Poll

Despite the "free and clear" language of Sect. 363(f), purchasers of assets in 363 sales may still be liable for injuries to unidentifiable future claimants. (In re Grumman Olson Indus, SDNY).

Click here to vote on this week's Quick Poll. Click here to view the results of previous Quick Polls.

HAVE YOU TUNED IN TO BLOOMBERG LAW'S VIDEO PODCASTS?



Bloomberg Law's video podcasts feature top experts speaking about current bankruptcy topics. The podcasts are available via Bloomberg Law's YouTube channel so that you can access the programs from your computer or device of your choice! Click here to view the Bloomberg Law video podcasts.

INSOL INTERNATIONAL



INSOL International is a worldwide federation of national associations for accountants and lawyers who specialize in turnaround and insolvency. There are currently 37 member associations worldwide with more than 9,000 professionals participating as members of INSOL International. As a member association of INSOL, ABI's members receive a discounted subscription rate. See ABI's enrollment page for details.

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November

- U.S./Mexico Restructuring Symposium

     November 7, 2012 | Mexico City, Mexico

- Professional Development Program

     November 9, 2012 | New York, N.Y.

- Detroit Consumer Bankruptcy Conference

     November 12, 2012 | Detroit, Mich.

- Winter Leadership Conference

     November 29 - December 1, 2012 | Tucson, Ariz.

December

- Forty-Hour Bankruptcy Mediation Training

     December 4-8, 2012 | New York, N.Y.

2013

January

- Western Consumer Bankruptcy Conference

     January 21, 2013 | Las Vegas, Nev.

- Rocky Mountain Bankruptcy Conference

     January 24-25, 2013 | Denver, Colo.

February

- Caribbean Insolvency Symposium

     February 7-9, 2013 | Miami, Fla.

- Kansas City Advanced Consumer Bankruptcy Practice Institute

     February 17-19, 2013 | Kansas City, Mo.

- VALCON 2013

     February 20-22, 2013 | Las Vegas, Nev.