When your bank gets the fire insurance money
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I'm David Brancaccio in Los Angeles. First, we'll know in just over seven hours how America's central bankers plan to proceed given tariffs potentially slowing the economy and raising prices at the same time. The expectation is for the Fed to leave interest rates unchanged for now. China today lowered its interest rates in response to the trade war. Here's Marketplace's China correspondent Jennifer Pak in Shanghai.

The announcement comes hours after American and Chinese officials have agreed to meet this weekend for trade talks. China's central bank wants to inject some confidence in the Chinese economy beforehand. It will trim several interest rates to make it cheaper to borrow money and lower the amount of cash banks must hold in reserves by half a percent. For more information, visit www.fema.gov.

But banks are not low on funds to lend. There just isn't enough demand for borrowing from households or businesses. And these measures, similar to the ones last fall, say analysts, will have a modest impact. Businesses and consumers are still cautious about China's property slump and the U.S.-China tensions. In Shanghai, I'm Jennifer Pak for Marketplace.

Amid tougher U.S. border policies, new data point to fewer international students coming to the U.S. for higher education. For instance, the Association of International Educators, NAFSA, finds a 13 percent dip in enrollments in postgraduate programs for the next academic year. Marketplace's Elizabeth Troval has that.

Visa issues and other government policies are the top reason NAFSA CEO Fanta Ah says they're seeing a decline in international enrollment. The uncertainty that international students currently in the U.S. have experienced have had a ripple effect on prospective students and how they're looking to the U.S. International students are seeing a decline in international enrollment.

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If there were more severe actions and more chaos in the immigration landscape, I think that could have a real effect. She says these students bring dollars, innovation and talent to the U.S. I'm Elizabeth Troval for Marketplace.

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The two big Los Angeles area wildfires in January destroyed more than 11,000 single and multifamily homes. For those with insurance and a mortgage on the property came what was probably a new piece of personal finance information. If the insurance company writes a check after a fire, the check comes with two names on it, the property owners and the banks. Turns out the

The mortgage lender gets to hold the money until the property owner can show they've reached various stages of rebuilding. It's in the fine print of your mortgage document. What, you didn't see it?

And here's the other surprise. The insurance payout money could be hundreds of thousands of dollars or more, pays little if any interest, even if it sits for months or years on hold. A member of the California Assembly, whose district includes one of the centers of the fire, Altadena, is pushing a bill to get insurance money held in escrow to homeowners. I spoke to Assemblyman John Harabedian, a Democrat. Good morning.

Thank you for having me. So we should explain. I mean, who knew? If you're lucky enough to have fire insurance and you're lucky enough to have gotten the insurance company to send some of the money, what happens if the homeowner has a mortgage, owes money to the lender on the property? That check comes to you, but it also comes to somebody else. That's exactly right, David. If you have a mortgage on your property and you experienced a complete loss, the

The post-loss insurance payment actually goes to the mortgage lender, and the mortgage lender will hold on to it, sometimes for a very long extended period of time. What my bill, AB 493, does is actually make sure that any interest that is earned off of that post-loss

insurance payment actually goes to the holder of the policy and isn't kept by the banks. Yeah, if it's a low interest rate, it might not be that much money. But if I can get a CD, a certificate of deposit for 4% if I shop around, 4% on $500,000 that maybe the mortgage company is holding for you is $20,000 after just a year. And you might just be starting your rebuild in a year.

That's right. And as anyone in this position knows full well, there are a lot of needs financially, and most people are underwater. They don't have the bank account to pay for everything. They were underinsured. And so anything that we can do to protect the financial rights of these homeowners and of these victims is really critical. Some people...

maybe saying, how could it be? I don't get interest. But if you look deep in the wording of when you sign the mortgage, there's typically a clause that says this. Your bill would change this. Are you getting traction on that thing? We're getting a lot of support. I think a lot of people are surprised and confused as to why historically this interest wouldn't go to the homeowner who lost their home. And the governor's office has been extremely supportive. And I'm very confident once it gets to his desk, he will sign it and we will change this.

I was talking to an Altadena homeowner who was on fire about this issue of not getting interest, and he pointed me to a law that changed in the state of Colorado. In fact, it was just signed into law last May.

that would do what you're trying to do here in California. So there is precedent. There is precedent. And California usually is a leader on smart policy. Unfortunately, in this instance, we're behind. Really, this is about protecting those in one of the most vulnerable positions that they're ever being in their lives. And it's really trying to lift them up and make sure that they have as much relief and as much help from all different directions as possible.

John Harabedian, a California assemblyman, a Democrat who represents the district devastated by the Eaton fire. Assemblyman, thank you very much. David, thank you. We're also mindful that many people haven't gotten their insurance payouts yet or may have had no insurance at all.

My house in Altadena burned up in that fire. We're fine, but I've been sharing what I'm learning on, for instance, Instagram. Go to Marketplace APM to see our updated video. My colleague Kai Risdahl and his team also has an ongoing series on businesses rebuilding after the fires, which now streams from Marketplace Online. In Los Angeles, I'm David Brancaccio, Marketplace Morning Report. From APM, American Public Media.

Hannah Sanborn was a single mom with newborn twins struggling to find affordable childcare. Her best friend Briar Rossi was burned out at work and looking for a way out.

So they came up with a plan. I was like, look, your leave's coming up like two weeks. Like, I'll put in my two weeks. Wow. And like, we'll just start it. We'll just do it. I was just like, let's do it. We're getting you out of this situation. We're getting me out of this situation. You tell me how much your rate is and I will pay it every week.

I'm Rima Grace, and this week on This Is Uncomfortable, how Hannah and Briar went from colleagues to best friends to lifelines. Listen to This Is Uncomfortable wherever you get your podcasts.