Law and regulation

Freddie Mac, which along with Fannie Mae has forced home lenders to buy back tens of billions of dollars of flawed mortgages, said the companies are loosening rules that made banks more cautious about extending credit.

The Senate Banking Committee will renew its markup of legislation to overhaul the housing finance system on Thursday, after abruptly postponing the deliberations late last month.

Between Operation Choke Point and anti-laundering regulations, financial institutions are going to new lengths to avoid anything even remotely associated with illegality — raising questions of fairness, slippery slopes and self-preservation.

Lenders and loan officers are increasingly using social media to scout for customers, raising a host of compliance concerns, from preventing unauthorized use of brands to monitoring employee communications.

Though Vice Chairman Thomas Hoenig and board member Jeremiah Norton must defer to Chairman Martin Gruenberg on setting the Federal Deposit Insurance Corp.'s agenda, the two directors have still found ways to affect policy, particularly on new capital rules for the biggest banks.

Mutual funds pose no threat to the stability of the financial system. Yet regulators appear determined to designate them as systemically important financial institutions-a move that could hurt millions of Americans who depend on the funds as retirement savings vehicles.

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The Senate Banking Committee is said to be moving toward a vote on major housing finance reform legislation next week, but the effort is likely to attract no more than 13 votes, falling short of what would be needed to advance the bill to the Senate floor this year.

On Wednesday, the Federal Financial Institutions Examination Council announced plans for cybersecurity risk assessments of banks during a webinar.

The Federal Reserve announced on Friday that it will conduct a new round of testing of its Term Deposit Facility, in an effort to help banks become familiar with how it works.

A recap of the informed opinions (and the discussions they generated) on BankThink this week.

Six Democrats whose support is crucial to a U.S. Senate plan to replace government-owned mortgage firms Fannie Mae and Freddie Mac have decided they won't support the proposal without major revisions, dimming its chances of becoming law this year.

The Federal Reserve is seeking input on a measure that would bar U.S. banks from acquisitions that push their share of all financial-company liabilities above a 10% threshold.

Federal Reserve Board Gov. Daniel Tarullo endorsed dropping Basel II's internal ratings-based approach to risk-weighted capital requirements and specifically carving out exemptions for community banks from certain rules.

The House Financial Services Committee grilled Treasury Secretary Jack Lew on a wide range of issues Thursday, raising concerns about regulatory oversight of the mortgage servicing industry and transparency at the Financial Stability Oversight Council.

SunTrust Banks (STI) is refusing to participate in a self-regulatory organization's inquiry into its online advertising practices, prompting the group to refer the Atlanta bank to the Consumer Financial Protection Bureau.

Top judges are jumping into the massive regulatory overhaul of the way that banks and third parties sue borrowers over unpaid bills. New York has proposed comprehensive reforms, while Maryland has modified its controversial "rocket dockets."

The government-sponsored enterprises remain profitable, but executives are raising fresh concerns about their ability to withstand a recession because of restrictions on raising capital.

Federal Reserve Board Chair Janet Yellen said Thursday that she has asked the White House to appoint a community banker to the central bank's board.

Bankers have complained that the federal government's crackdown on their relationships with payday lenders and other merchants has gone too far, but Justice officials said in a blog post that banks that abet fraudsters' use of the payment system should be punished.