Banking/Financial Institutions

The Treasury Department's investment in General Motors is continuing to shrink as the government winds down one of the last major pieces of the Troubled Asset Relief Program (TARP).

The Treasury announced Monday that it had entered the second stage of its exit from the domestic car manufacturer, as it continues to sell off the roughly 241.7 million shares it has in the company. The government anticipates it will have fully exited its rescue of GM sometime in the first quarter of 2014.

"Earlier this year, Treasury launched an effort to sell its remaining shares in GM common stock," said Tim Massad, Treasury's assistant secretary for financial stability. "We are pleased with the progress to date and will continue exiting this investment in accordance with our previously announced plan and timetable and in a manner that maximizes returns for taxpayers.”

Financial regulators unveiled a new set of guidelines for a civil penalty fund created to collect fines from violators of consumer protection law.

The House will turn this week to a bill that Republicans say would prevent the United States from defaulting on its debts.

The Full Faith and Credit Act is a preemptive attempt by Republicans to defuse the warnings from the White House and Democrats about holding the debt ceiling “hostage” in fiscal negotiations. The bill would give the Treasury Department the ability to borrow above the limit to cover bond and Social Security payments.

While the Treasury insists it cannot prioritize payments and avoid a default if its borrowing capacity is reached, Republicans disagree, and say their bill should assure markets that the country will always pay its debts.

Lawmakers will likely have to increase the debt ceiling sometime in the late summer or early fall.

The SEC Regulatory Accountability Act would require the agency to conduct cost-benefit analyses on any new rules. 

Regulators are investigating a tip about government action that coincided with a surge in healthcare stocks.

The Securities and Exchange Commission on Wednesday voted unanimously to propose a 1,000-page set of rules governing complex financial products known as security-based swaps.

The proposals could put limits on how banking giants JP Morgan Chase and Goldman Sachs conduct swap transactions with foreign banks, as a majority of these types of deals happen partially inside and partially outside the U.S, the SEC says.

The Senate Banking Committee will hold a confirmation hearing next week for President Obama's nominee to head up the Export-Import Bank. 

The panel will consider Fred Hochberg to lead the Export-Import Bank for a second four-year term on May 7, about six weeks after the White House announced his nomination. 

A vote will be scheduled for a later date.

The final two borrowers in a multibillion settlement over shoddy foreclosure practices will start doling out money to borrowers on Friday. 

Goldman Sachs and Morgan Stanley, the last two mortgage lenders in a 13-servicer agreement to arrange compensation, will make a total of $247 million in payments to more than 220,000 borrowers, the Federal Reserve reported on Monday. 

Payments will range from $300 to more than $125,000, and are going to borrowers whose homes were in the foreclosure process in 2009 and 2010 with the former subsidiaries of Goldman Sachs (Litton Loan Servicing) and Morgan Stanley (Saxon Mortgage Services).

Since the announcement of the settlement in January, House and Senate Democrats have been pressing the Office of the Comptroller of the Currency and the Fed to release more information about why they canceled the Independent Review Process in favor of the agreement, which provides a total of $3.6 billion in cash payments to 4.2 million borrowers.

Stay-at-home spouses will have an easier time obtaining their own credit cards following updated rules issued by the Consumer Financial Protection Bureau (CFPB).

On Monday, the CFPB announced that it had updated existing regulations to ensure that spouses or partners that do not work outside the home would still be able to qualify for credit cards. The change came after new credit card regulations made it much more difficult for those people, lacking an income of their own, to obtain approval for credit cards. The change comes after a public outcry from those individuals and members of Congress.

“Stay-at-home spouses or partners who have access to resources that allow them to make payments on a credit card can now get their own cards,” said CFPB Director Richard Cordray. “Today’s final rule is an example of the Bureau’s commitment to working with consumers and financial institutions in order to ensure responsible access to credit for American families.”

Facing stricter guidelines, banks will have to determine if it's worth continuing to offer the products.