Synagogues and churches held prayer services for students as the Consumer Financial Protection Bureau fined Discover Bank $18.5 million for illegal student lending practices. The bank must repay students $16 million, pay a $2.5 million civil penalty and reform its lending practices. The Bureau accused Discover of overstating the minimum amount due in billing statements, misrepresenting students' total interest payments and engaging in illegal debt collection practices. The penalty is the first of its kind by the Bureau against a student loan company.

"This fine sends a strong message to companies that take advantage of students," said Eric LeCompte, executive director of the religious anti-poverty coalition Jubilee USA Network, which advocates for responsible student lending policies. "Predatory lending traps students in debt."

This past weekend, 64 faith communities from 26 states prayed and acted for fair student lending policies as part of Jubilee USA's national interfaith "Jubilee for Students" prayer event. In 2012 and 2013, the event pushed congressional legislation to stop federal student loan interest rate increases.

"Unfair lending practices put our young people at risk," said Rabbi Barnett Brickner of Temple Israel in Alameda, Calif. "It's important we protect our students and ensure they can graduate college without mountains of debt."

As a part of religious services, communities collected students' stories as part of a national campaign to highlight predatory lending practices.

Pope Francis called for an international bankruptcy process in a news conference as he left Latin America on Monday. According to the Associated Press, when asked about the Greek debt crisis, Francis stated, "if a company can declare bankruptcy, why can't a country do so and we go to the aid of others?" Francis offered further comments noting that too many countries are struggling with high debts and he suggested a United Nations bankruptcy proposal could be the solution.‎

“Pope Francis knows that heavy debt loads cause poverty and inequality,” said Eric LeCompte, who consulted the Vatican on its position. LeCompte is the head of the religious development organization Jubilee USA Network. “The Pope's statement is a logical extension of the Catholic Church's strong support of debt relief for struggling countries."

Last year, LeCompte led a delegation of global Jubilee organizations to advise Vatican Secretary of State Cardinal Pietro Parolin on the need for a bankruptcy process to address inequality. The Catholic Church is a founder of Jubilee USA and supports its efforts to win debt relief for struggling countries.

In September of 2014, the United Nations General Assembly voted 124-11 to develop the bankruptcy process that Pope Francis referenced. LeCompte addressed the UN earlier this year on the creation of the process. This Fall, the United Nations is set to review progress on the proposal. Because International Monetary Fund (IMF) studies point to debt as a cause of inequality, the IMF is exploring aspects of a bankruptcy process based on an April 2013 paper. In addition to the debt crisis in Greece, nearly 50 countries‎ face worrying levels of debt distress according to World Bank statistics.

At a United Nations development summit, world leaders, the International Monetary Fund and development organizations recommend the elimination of a type of hedge fund that preys on countries in financial crisis. So called “vulture funds” are featured in a global agreement to be signed this week at the Financing for Development Conference.

“These predatory funds undermine development and can destabilize a country’s economy,” said Eric LeCompte, Executive Director of the religious development organization Jubilee USA Network. “From Zambia to Peru, they target, litigate and collect aid monies that should be building schools and hospitals.”

When countries face economic hardship, "vulture funds" buy a country's debt cheaply and then sue for full repayment. After Zambia received international debt relief in 2006, a hedge fund called Donegal International sued Zambia to collect $55 million on a $15 million debt the fund purchased for $3.3 million on the secondary market. NML Capital sued Argentina over debt holdings and refused to participate in Argentina's debt restructuring. The Argentina case put a broader spotlight on this type of litigation.

“World leaders are saying enough is enough,” stated LeCompte who is attending the summit and participated in agreement negotiations. “The final agreement recommends changing contracts to prevent the behavior or legislating the funds out of existence.”

On July 1st, Belgium was the latest country to pass a law restricting this behavior. Three of the ten paragraphs in the United Nations agreement that focus on debt, state concern or recommend ways to stop these hedge funds. Two additional paragraphs promote aspects of global bankruptcy and responsible lending and borrowing which further deter this behavior.

European negotiators agreed unanimously to a new financing deal with Greece. The deal includes up to $96 billion in new loans to Greece in exchange for economic reforms, including austerity measures. Greece can reschedule its debt under the deal but cannot receive debt relief. Greece's parliament and Eurozone parliaments must approve the deal.

Eric LeCompte, executive director of the religious development organization Jubilee USA, issues the following statement:

"It's too early to tell if this deal will work, but I'm skeptical. It's important that they can extend debt payments into the future, but no debt relief and more austerity is a recipe for more of the same for Greece.

"The International Monetary Fund is right that Greece needs debt relief to end this crisis. Without debt relief, it's hard to believe Greece can grow its economy. ‎

"The Greek people voted clearly against austerity because they've seen its impact first hand.

"In the long run, we need an international bankruptcy process to avoid more and more crises like this one‎."

Jubilee USA Network is an alliance of more than 75 US organizations and 400 faith communities working with 50 Jubilee global partners. Jubilee's mission is to build an economy that serves, protects and promotes the participation of the most vulnerable. Jubilee USA has won critical global financial reforms and more than $130 billion in debt relief to benefit the world's poorest people. www.jubileeusa.org

###

Greek voters rejected a financing plan that would have provided funds for the debt-ridden country in exchange for austerity measures such as pension cuts. Sixty-one percent voted against the plan while 38.7% voted yes.

"Austerity programs over the last five years pushed a third of the Greek population under the poverty line," said Eric LeCompte, executive director of the religious development organization Jubilee USA. "The Greek people voted in large numbers for debt relief."

Greece and its lenders will now need further negotiations to reach a financing agreement. European leaders meet this week to discuss next steps. Greece owes $300 billion in total debt. It missed a 1.5 billion euro payment to the International Monetary Fund (IMF) on June 30. Approximately 7 billion euros in payments are due in July. The IMF stated in a report this week that any new agreement between Greece and its lenders should include debt relief.

"Greece is the most heavily indebted country in Europe," LeCompte noted. "I agree with the International Monetary Fund that Greece needs serious debt relief and needs to extend other debt payments into the future."

Greece implemented austerity measures as part of emergency financing agreements with the European Union, the IMF and the European Central Bank in 2010 and 2012. The new financing plan Greek voters rejected included pension cuts and other austerity provisions.

"Austerity in exchange for financing doesn't work. It's like treating an injured person with beatings," LeCompte stated. "Unless we establish a global bankruptcy process for countries, we'll continue to see more situations like Greece around the world."

Read the IMF's paper, Greece: Preliminary Draft Debt Sustainability Analysis.

Puerto Rico's public utility company, the Puerto Rico Electric Power Authority (PREPA), reached a deal Wednesday with investors to extend debt negotiations. PREPA will pay $416 million immediately and then will have until September 15 to reach a long-term deal. PREPA owes a total of $9 billion in debt. Puerto Rican Governor Alejandro Garcia Padilla announced this week that the island cannot pay its $72 billion debt burden and asked to extend payment terms.

"Without access to US bankruptcy law or emergency financing, Puerto Rico has few options," said Eric LeCompte, executive director of the religious development organization Jubilee USA Network. ‎It's good news that Puerto Rico won't default in the short term, but we need a long term solution."

Meanwhile, Senator Charles Schumer (D-NY) announced Tuesday he will introduce a bill to allow PREPA to access US Chapter 9 bankruptcy protection. Puerto Rico's representative in the US House introduced a similar bill (HR 870) in February. Puerto Rico is currently unable to access bankruptcy protection because it is a territory and not a US state.

"Congress should immediately extend bankruptcy protection to Puerto Rico. The island should have the same protections as any US city or state," LeCompte stated. "Bankruptcy law protects both investors and debtors from crises just like this."

Read more about HR 870.

Read more about Puerto Rico's debt situation.

This week's Nepal donor conference pledged $4.4 billion in aid to Nepal, short of the $6.6 billion Nepal requested for earthquake recovery. About half of the total financing is loans and half is grants. Nepal did not receive any pledges of debt relief while world leaders gathered in Kathmandu. The International Monetary Fund (IMF) said Thursday Nepal will not qualify for its new emergency debt relief trust fund.

"The initial aid pledges are helpful and we can close the $2 billion gap quickly with debt relief," said Eric LeCompte, Executive Director of the religious development organization Jubilee USA Network. "One of the quickest ways that the World Bank, Asian Development Bank and governments can deliver rebuilding grants is by canceling debt."

Nepal spends $600,000 a day paying its debt, or more than $35 million since the first April earthquake.‎

The World Bank and the Asian Development Bank pledged a combined $1.1 billion in new concessional loans and grants. Nepal already owes the World Bank and Asian Development Bank approximately $3 billion.

Although the World Bank has not announced plans for a debt relief fund, the IMF created the Catastrophe Containment and Relief Trust in the wake of the Ebola crisis and cancelled $100 million of West Africa's debt. IMF spokesperson Gerry Rice said Thursday Nepal met the first requirement for relief but that the earthquake did not cause enough total economic damage. Rice did not reference whether or not damage to Nepal's "productive capacity" pulled another trigger for the fund to release about $23 million in debt relief.

International Monetary Fund (IMF) spokesperson Gerry Rice announced Nepal will not receive debt relief from a special IMF trust fund that helps poor countries when they face natural disasters. The IMF's Catastrophe Containment and Relief Trust cancelled nearly $100 million in debt owed by Ebola-impacted West African nations. Jubilee USA Network, a religious development organization, advocated for the trust fund and debt relief for West Africa and Nepal. A powerful earthquake struck Nepal April 25, killing more than 8,600 people and destroying over 500,000 homes.

"This is troubling news," said Eric LeCompte, a United Nations debt expert and executive director of Jubilee USA Network. "Given the devastation in Nepal, it's hard to believe that the criteria was not met."

Nepal is one of 38 low-income countries eligible for relief from the new fund. To qualify for that relief after a natural disaster, an eligible country must meet certain criteria. The disaster must impact at least one-third of the country's population and either destroy 25% of the nation's productive capacity or cause damage equal to the size of the country's economy. According to Rice, Nepal met the first condition but the earthquake did not cause enough total economic damage. Nepal's earthquake and its aftershocks caused $5-10 billion in damage, about one-third of the country's total economy. However, Rice did not comment on whether or not Nepal's productive capacity met the the threshold to trigger debt relief under the trust.

"This fund was created for situations just like this and debt relief in Nepal could make a significant difference," said LeCompte.‎ "Beyond the IMF, the World Bank and Asian Development Bank who hold about $3 billion of Nepal's debt have unfortunately not announced any debt relief plans yet."