Unemployment Claims Fall to Coronavirus Pandemic Low of 576,000

Unemployment Claims Fall to Coronavirus Pandemic Low of 576,000

April 15, 2021

ABI Bankruptcy Brief

Unemployment Claims Fall to Coronavirus Pandemic Low of 576,000

The Labor Department said today that the number of Americans filing first-time jobless claims last week fell to the lowest level since the onset of the COVID-19 pandemic, FoxBusiness.com reported. Data released Thursday showed that 576,000 Americans filed for first-time unemployment benefits in the week ended April 10, down from an upwardly revised 769,000 the week prior. Analysts surveyed by Refinitiv were expecting 700,000 filings. Continuing claims for the week ended April 3, meanwhile, ticked up to 3.731 million from 3.727 million the prior week. That number was above the 3.7 million that was expected.​​​

Retail Sales Surge Nearly 10 Percent in March, Spurred by Stimulus

Retail sales in March surged 9.8 percent as $1,400 stimulus checks were issued, the weather improved and vaccination rates increased, The Hill reported. The figure was well above the 6.1 percent economists expected, and was a return to form after major storms in February led to a 3 percent drop. That figure was revised upward to 2.7 percent. The $619.1 billion in sales was a whopping 27.7 percent higher than last March, when the pandemic hit in earnest and lockdowns took hold across the country.​​​

Texas Tells Judges They Can Ignore Federal Eviction Ban

Texas has stopped enforcing a federal eviction ban, a move that is accelerating some tenants’ displacement and puts the state on a potential collision course with the U.S. government, the Wall Street Journal reported. Local courts throughout Texas have postponed thousands of eviction cases since September for tenants who declare they have missed rent payments due to financial hardship. The postponements were in compliance with a national moratorium on evictions during the pandemic, a policy that has been extended until June 30. But last month, the Texas Supreme Court let its guidelines for enforcing the ban expire. A state advisory body for Texas eviction courts then said that without that guidance, local judges are no longer bound to uphold the national ban. Several other state court systems, including those in Florida and Ohio, haven’t issued formal guidelines for how the federal moratorium should be applied, leaving the decision-making up to individual judges or local municipalities. That has led to some eviction rulings against tenants in some of those states, according to tenant advocates and housing lawyers. In Texas, the recent reinterpretation of the federal ban could open the door to widespread evictions, lawyers and advocates say. In the state’s Collin County, Judge Michael Missildine is now approving evictions in his courtroom and handing the orders off to the local constable’s office for enforcement. “They’re starting to do them on a very regular basis,” he said. The state’s new interpretation of the federal policy has confused many landlords, and not all are ready to act on it. Some Texas judges, including Judge Missildine, are letting evictions move ahead while reminding building owners that they might be violating federal law by proceeding if their tenants declare themselves protected under the moratorium. Other judges have continued to apply the federal eviction ban in their courts despite the lack of state guidance, Texas housing attorneys said. (Subscription required.)​​​

Treasury Announces COVID-19 Relief Oversight Office

The Treasury Department yesterday announced an office to oversee COVID-19 relief programs approved in multiple bills since last year that totaled trillions of dollars, The Hill reported. “A new, cohesive model for recovery program implementation at Treasury will help get relief distributed quickly and into the hands of those who need it most,” said Deputy Secretary Wally Adeyemo. “Already we are getting individual payments out the door faster and in greater volume than ever before. We hope to continue this improved delivery, while also supporting outreach between Treasury and important stakeholders across the country," he added. The Office of Recovery Programs will be led by Chief Recovery Officer Jacob Leibenluft, currently counselor to Treasury Secretary Janet Yellen and an alumnus of the Obama White House and the left-leaning Center for American Progress think tank. Huge sums of cash have already been disbursed in the form of stimulus payments, but unemployment benefits, tax credits and other forms of COVID-19 relief remain to be spent from the bevy of pandemic legislation. That includes $420 billion from the American Rescue Plan, the $1.9 trillion package President Biden signed into law last month.​​​

U.S. Housing Market Is Nearly 4 Million Homes Short of Buyer Demand

The U.S. housing market is 3.8 million single-family homes short of what is needed to meet the country’s demand, according to a new analysis by mortgage-finance company Freddie Mac, the Wall Street Journal reported. The estimate represents a 52% rise in the nation’s home shortage compared with 2018, the first time Freddie Mac quantified the shortfall. The figures underscore the severity of the housing deficit, which is a major factor fueling the current red-hot housing market. The shortage is especially acute for entry-level homes, which makes it more expensive for first-time home buyers to enter the market, said Sam Khater, chief economist at Freddie Mac. “We should have almost four million more housing units if we had kept up with demand the last few years,” Mr. Khater said. “This is what you get when you underbuild for 10 years.” Freddie Mac reached its shortage figure by assessing the amount of single-family home building needed to match demand from household formation, second-home purchases and replacements of damaged or aging U.S. homes, and comparing that with the pace of construction. (Subscription required.)​​​

IRS Commissioner Says U.S. Is Losing $1 Trillion Annually to Tax Cheats

The U.S. is losing approximately $1 trillion in unpaid taxes every year, Charles Rettig, the Internal Revenue Service commissioner, estimated on Tuesday, arguing that the agency lacks the resources to catch tax cheats, the New York Times reported. The so-called tax gap has surged in the last decade. The last official estimate from the I.R.S. was that an average of $441 billion per year went unpaid from 2011 to 2013. Most of the unpaid taxes are the result of evasion by the wealthy and large corporations, Mr. Rettig said. “We do get outgunned,” Mr. Rettig said during a Senate Finance Committee hearing on the upcoming tax season. Senate Finance Committee Chair Ron Wyden (D-Ore.) called the $1 trillion tax gap a “jaw-dropping figure.” Rettig attributed the growing tax gap to the rise of the $2 trillion cryptocurrency sector, which remains lightly regulated and has been an avenue for tax avoidance. He also pointed to foreign-source income and the abuse of pass-through provisions in the Tax Code by companies. The size of the IRS’s enforcement division has declined sharply in recent years, Mr. Rettig said, with its ranks falling by 17,000 over the last decade. The spending proposal that the Biden administration released last week asked for a 10.4 percent increase above current funding levels for the tax-collection agency, to $13.2 billion. The additional money would go toward increased oversight of tax returns of high-income individuals and companies and to improve customer service at the IRS.​​​

Don’t Miss Next Week’s Live Sessions at ASM; Replays of Previous Sessions Available on the Virtual Platform

ABI's Annual Spring Meeting continues next week with key sessions, an engaging keynote by journalist and author Michele Norris, and many networking opportunities, including the inauguration presentation and networking event for incoming ABI President Robert Reynolds. Sessions next week include:

• Do You Speak Consumer?
• Litigating Director and Officer Claims in Bankruptcy
• What Do I Do with This 1099 Form from the IRS? Cancellation of Debt Income: A Ticking Time Bomb?
• Insolvencies of Cannabis-Producers and Their Cross-Border Implications
• Liquidity Crisis! Dealing with the Cash-Starved Chapter 11 Debtor Prior to and Through Chapter 11
• When Mediation Gets Messy: Ethical Dilemmas
• Circuit and District Splits on Important Commercial Issues with Bill Rochelle
• Great Debates
• Be Careful What You Ask for: Risks and Benefits of Involuntary Bankruptcy Filings
• Evidence and Trial Skills in Bankruptcy
• The Continued Impact of COVID-19 on the Distressed Real Estate Market
• Nightmarish Consumer Issues
• Top Ten Bankruptcy Ethics Traps and How to Avoid Them
• Veterans and Active-Duty Service Members Volunteer Panel

If you missed any of the hard-hitting sessions such as the "State of the Industry" or "The Small Business Reorganization Act: How It's Going So Far," replays are available through the innovative virtual platform. Access the replays for 30 days! Are you registered?

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New on ABI’s Bankruptcy Blog Exchange: House Bill Aims to Encourage More De Novo Banks

Rep. Andy Barr (R-Ky.) has introduced legislation aimed at making it easier for new community banks to open in areas that are underserved by the banking system, according to a recent blog post.

To read more on this blog and all others on the ABI Blog Exchange, please click here.

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