Banking/Financial Institutions

Mortgage applications decreased for the fourth straight week behind a drop in refinancing despite continued record-low loan rates. 

The seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, dropped 0.8 percent for the week ended Sept. 24, the lowest level in about two months, the Mortgage Bankers Association said Wednesday.

Refinancing dropped off 1.6 percent, a seven-week low, the fourth consecutive weekly decrease, as the housing market tries to regain its footing. 

Stocks have rallied dramatically in September as Republicans look increasingly like they will retake control of the House.

The group will make the delivery before the next fiscal commission hearing in response to Simpson's comments on Social Security.

The Obama administration on Friday said it will delay a controversial rule designed to prevent students at for-profit colleges from defaulting on their federal loans.

The Department of Education had initially set a Nov. 1 deadline for finalizing its so-called "gainful employment" rule — which would hinge eligibility for federal financial aid on the debt-to-earnings ratio of recent graduates. Instead, the agency will push the timeline to "early 2011" — a response to the tens-of-thousands of public comments the proposal attracted.

The effective date of the provision remains unchanged: July of 2012.

"We want to be as thoughtful as possible as we move forward," DOE Secretary Arne Duncan said in a statement.

"We're taking additional time to analyze all the feedback we've received to help us strike the right balance between holding these programs accountable to protect students and taxpayers from abuse and making sure we keep whole those programs that are doing a good job." 

The decision will come as welcome news to scores of Capitol Hill lawmakers, who had registered their opposition to the gainful employment proposal in letters to Duncan earlier this month. 

Even some lawmakers fully behind of the controversial rule said they're supportive of the delayed finalization. Sen. Tom Harkin (D-Iowa), chairman of the Senate education panel, said he's "encouraged" by the agency's "commitment to the implementation of a strong gainful employment regulation." 

Proposed last July, the gainful employment rule would require for-profit programs to demonstrate that graduates' annual loan payments don't exceed 8 percent of their starting salaries. The idea is to ensure that professional students can make enough money in their fields to pay back the debt they accrue during training — an issue of importance to taxpayers, who provided about $24 billion in federal loans and grants to career college students last year. 

Under the proposal, those programs failing to meet the standard could lose access to the federal aid.

The proposal is largely a response to the rising default rate among students receiving certificates and degrees from the nation's exploding career college industry. But it also follows a series of reports suggesting that aggressive recruiting, shady marketing practices, and even fraud are common tactics within the industry.

The gainful employment proposal is the most controversial of 14 rule changes put forth by the DOE this summer in response to those reports. The agency said it still intends to finalize the other 13 guidelines by Nov. 1, allowing them to take effect July 1, 2011. 

Moreover, DOE is pushing to finalize some elements of the gainful employment rule by the original Nov. 1 deadline.

One element of that rule the agency hopes to have in effect next summer would require for-profit schools to reveal each program's graduation and job placement rates to prospective students.

This post was updated at 3:01 pm and 3:50 pm.

Lawmakers moved Thursday to overturn part of the recent financial overhaul that gave the Securities and Exchange Commission (SEC) greater power to deny freedom of information requests from the public.

The House approved legislation on Thursday that would rein in the SEC's power to withhold information it gathers during examinations of private firms. The Senate this week unanimously approved the same bill, which now heads to the president for enactment.

SEC Chairwoman Mary Schapiro and her predecessor, Chris Cox, pushed hard for the power, arguing that it would help enforcement cases by protecting proprietary information that businesses turn over during investigations.

The exemption garnered little attention during congressional debate on the financial overhaul. After the SEC cited the exemption in a denial of a request from Fox Business Network, Democrats and Republicans quickly moved to rewrite the legislation.

"A consensus developed that this was an exemption that was far too broad," House Financial Services Committee Chairman Barney Frank (D-Mass.) said Thursday. The legislation was pushed by Sens. Pat Leahy (D-Vt.), Ted Kaufman (D-Del.) Charles Grassley (R-Iowa) and John Cornyn (R-Texas).

Frank and Reps. Darrell Issa (R-Calif.), Spencer Bachus (R-Ala.) and Ed Towns (D-N.Y.) worked to rewrite the provision in the House.

Towns said the SEC measure is a "secrecy provision" that undermines the intent of the financial overhaul package.

Consumer advocacy groups, such as the Project on Government Oversight (POGO), also urged lawmakers to repeal the provision.

“This is a big win for open government and accountability. It is especially a victory for defrauded investors, the media, and whistleblowers," said Danielle Brian, executive director of POGO, in a statement.

Senate Finance Chairman Max Baucus (D-Mont.) on Thursday announced that he is looking into the tax status of earning by Prudential Financial, Inc. on survival death benefit accounts in its Servicemembers' Group Life Insurance (SGLI) program. 

Recent press reports have indicated that upon the death of a SGLI policy holder, Prudential holds the survivor benefits in its own corporate account, instead of paying the benefits to their rightful owner and not crediting earnings on the funds to the beneficiaries. 

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The Senate approved a bill Tuesday that removes a provision from the financial regulatory reform law.

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The Treasury secretary said the financial bailout was one of the "most effective emergency programs" in financial history.

Mortgage applications decreased for the third straight week behind a drop in refinancing and purchasing requests despite continued record-low loan rates. 

The seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, dropped 1.4 percent for the week ending Sept. 17, the lowest level in six weeks, the Mortgage Bankers Association said Wednesday.

Purchases were down 3.3 percent and refinancing dropped off 0.9 percent, the third consecutive weekly decrease, as the housing market continues to regain its footing. 

High unemployment combined with negative home equity is weighing on the housing market's recovery. A government tax credit of as much as $8,000 spurred purchases through the spring until its expiration on April 30. Analysts have said they expect the housing market to slowly recover. 

The Treasury Department on Monday announced a secondary public offering of over 52 million warrants for common shares in The Hartford Financial Services Group Inc.