Author Archives: BEBdata

AVS Confidence Stalling

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According to the 2019 Global Automotive Consumer Study conducted by Deloitte, consumer interest in self-driving vehicles lags the pace of investment in advanced vehicle technology.  In this study, they examine consumer interest in advanced automotive technologies, including autonomous vehicles, and compare and contrast automotive consumer trends in markets worldwide.

In the United States, 50 percent of survey respondents do not believe Autonomous Vehicles – AVs will be safe—nearly the same as last year’s 47 percent but drastically different from 2017, when 74 percent voiced safety concerns. Consumer confidence in AV safety also plateaued in China, Japan, South Korea, India, and Germany.

Monetizing Car Data

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A massive amount of data is being generated as privately owned vehicles continue to use sensors and become increasingly connected to each other and to an external infrastructure. Yet while gathering such data is now routine, actually identifying insights that can be monetized is still in its infancy. McKinsey Automotive & Assembly published an interesting report called  Monetizing car data.  They analyze consumer perspectives on the prospect of accessing car-generated data, and identify the value and requirements of possible car data-enabled use cases. They predict that the global revenue pool from car data monetization could be as high as $750 billion by 2030. Check it out here.

Canadian Consumer BK on the Rise

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The number of bankruptcies in Canada is on the rise.

According to the Ottawa-based Office of the Superintendent of Bankruptcy (OSB), the number of consumers seeking debt relief jumped 5.1% to 11,320 in November from a year earlier. October and November combined saw 22,961 consumer insolvency filings, the most for those two months since 2011.

The increase in bankruptcy filings is being blamed on higher interest rates that are leading to rising borrowing costs for Canadian households. The Bank of Canada has lifted its key lending rate five times since mid-2017. Policy makers, who meet this week to determine their next move on rates, are closely monitoring the impact of higher borrowing costs on the economy and Canadian consumers.

On a year-over-year basis, bankruptcy filings during October and November were up in every province except Prince Edward Island, which was unchanged, according to the OSB. Alberta was the hardest hit, with the number of insolvencies rising 16% from autumn 2017. About 66% of Ontario bankruptcy filings in November were made by consumers, which is the highest share on record.

CFPB Rolls Back Pay Day Loan Protection

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The Consumer Financial Protection Bureau proposed rolling back the key provision of a lending rule designed to protect people taking short-term, high-interest loans, also known as payday loans.

Under the proposal (PDF), which amends the 2017 Payday Lending Rule, lenders would not have to confirm that their borrowers have the means to repay some types of loans. Eliminating the “ability to pay” requirement would affect loans with a term of 45 days or less. It also would target single-payment vehicle title loans, in which borrowers put up their cars or trucks for collateral, and longer-term, balloon-payment loans.

Payday loans typically have annual interest rates between 300 and 400 percent. Payday lenders who offer these loans often operate in low-income communities.

As currently written, the Payday Lending Rule requires lenders to view borrowers’ pay stubs, check with employers, or otherwise confirm borrowers’ ability to pay back their loans.

Proponents of the change say the looser rule will ensure that those borrowers have more credit options. Opponents say the change puts borrowers at greater financial risk than they faced before borrowing.

The new rule’s implementation will also be postponed (PDF) to November 2020, from its earlier start date of August 2019.

Student Loans & Bankruptcy

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Did you know that one of the most googled student loan questions is; “Can you discharge your student loans in bankruptcy?”

In 2005, Congress passed, and President George W. Bush signed, the Bankruptcy Abuse Prevention and Consumer Protection Act, which exempted federal and private students loans from discharge.

Prior to 1976, you could discharge your student loans in bankruptcy.

Then, student loans were dischargeable if they had been in repayment for five years. Subsequently, that period was extended to seven years. In 1998, Congress removed dischargeablility except if a debtor could show that paying back the student loans would create an undue hardship. In 2005, Congress extended this protection to private student loans.

In order to have a student loan discharged through bankruptcy, an Adversary Proceeding (a lawsuit within bankruptcy court) must be filed, where a debtor claims that paying the student loan would create an undue hardship for the debtor.

Government Shut Down & BK Courts

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On December 22, 2018, the federal funding for certain agencies lapsed, and the United States government entered into a partial shutdown. The U.S. Department of Justice (DOJ), including the United States Trustee Program (USTP), was one of the agencies that shut down. United States Trustees (“UST”) representing the USTP appear and litigate in a multitude of bankruptcy proceedings. USTs also actively participate in out-of-court settlement discussions, plan negotiations, and the like. Pursuant to the partial shutdown, regular operations at the USTP ended, with only “excepted employees” continuing work on limited matters.

USTP excepted employees comprise a total of 35 percent of its employees. Excepted employees work without pay during the shutdown but will receive back pay after the government reopens. Remaining USTP employees who are not excepted are furloughed and will only receive compensation if Congress passes a bill allowing for it.

The contingency plan sets forth changes in the duties of DOJ employees. The contingency plan directs that civil litigation be halted except where the safety of human life or protection of property are at stake. Much of the civil litigation in which the USTP is a party does not involve such issues. The contingency plan further notes that DOJ attorneys should request stays in civil cases and reduce civil litigation staffing only to that necessary to protect human life and property. Several UST and DOJ attorneys involved in bankruptcy litigation have filed motions seeking stays of proceedings and extension of deadlines until the government reopens.

As the USTP continues to operate with its skeletal staff, certain bankruptcy processes will likely encounter delays. Although federal courts have rearranged funds to remain operational through January 18, should the shutdown extend beyond that date, bankruptcy matters such as plan confirmations and other court hearings will encounter similar delays.

Proceedings involving Chapter 7 and 13 trustees, including out-of-court discussions or negotiations, are unlikely to be delayed as these parties receive payments outside of government assistance.