Adam Doster of Progress Illinois looks at government’s unsatisfactory response to the growing foreclosure crisis– foreclosures in Illinois were up 33 percent in July compared to the year before. Doster writes that while state and local government could do more, the real culprit is the federal government:

[caption id="attachment_7116" align="alignleft" width="122" caption="Elizabeth Warren"][/caption] Elizabeth Warren is the right person to head the new Bureau of Consumer Financial Protection, the agency created in the now-law-of-the-land financial reform bill.  Damian Paletta draws a skillful portrait of the agency in the Wall Street Journal, explaining what it would do (monitor the lending practices of large financial institutions) the ways the agency was weakened in order to get it in the bill (moving car loans and community banks out of its jurisdiction), and the opposition to the woman who thought it up in the first place, Elizabeth Warren.

Steve Daniels of Crain's Chicago Business caught this at the close of business Friday: the federal rescue of Chicago's ShoreBank has been postponed for at least another three weeks. The distressed community lender made national headlines in May when Wall Street titans including Goldman Sachs and Bank of America pledged $150 million to prevent an FDIC takeover. The Treasury Dept. was then expected to chip in $75 million of TARP funds, and with the combined $225 billion Shore Bank would be back on its feet. But the Federal Reserve has advised Treasury that ShoreBank needs more than $225 million (it's not clear how much more) -- hence the delay in TARP money. There is some justice in big banks that received multi-billion TARP bailouts helping out smaller banks that weren't immediately rescued by the Treasury Dept.

A "Star" Regulator at the Fed?  OK, I added a little punctuation -- but that could have been the actual headline for Sewell Chan's profile of Daniel Tarullo, member of the Federal Reserve's board of governors. It turns out that regulators can be stars too.  Tarullo helped run the "stress ...

The Federal Reserve’s new on-line database of credit card contracts, required by the Credit Card Accountability, Responsibility and Disclosure Act passed last year, is supposed to help consumers make more informed choices about credit.  But, as Sewell Chan and Andrew Martin report in yesterday’s New York Times, the Fed’s database of about 1,000 contracts issued by 30 firms doesn’t help consumers understand the terms of the lengthy, legalistic agreements.

Washington's rescue of Wall Street is almost complete -- and it has been surprisingly affordable.

David Leonhardt has a helpful New York Times Magazine piece that explains various financial regulatory reform proposals and concludes that it will be up to regulators themselves, not new regulatory rules, to prevent the next financial crisis. The analysis, though, minimizes an important element of these proposed reforms: how different the Federal Reserve is from other federal agencies that do financial regulation.

In a decision with potentially enormous ramifications, a federal judge in New York has ruled that the Federal Reserve, like every other federal agency, is subject to the Freedom of Information Act.

There's a lot of talk about Washington helping Wall Street instead of Main Street, but the federal government's approach to the housing market provides a specific example. The Wall Street Journal's Jon Hilsenrath and Luca Di Leo report that starting April 1 the Fed will no longer buy mortgage-backed securities. The Fed has purchased an astonishing $1.25 trillion of these mortgage-backed securities over the past year in a successful bid to keep the mortgage market afloat and prevent an even more severe recession. In fact, the effort was so successful that one economist tells the Journal that the housing market's greatest problem now is unemployment. Contrast the Fed's program to Treasury's Making Homes Affordable plan intended to help individual homeowners avoid foreclosure as well as refinance their mortgages. That program has been panned as reaching only a fraction of distressed homeowners. The Treasury Dept. is embarrassingly unable to strong-arm banks to modify loans. In fact, the New York Times' Peter Goodman has reported that Making Homes Affordable may be counterproductive, because it has "raised false hopes among people who simply cannot afford their homes."

Slate's Daniel Gross points out that the Troubled Asset Relief Program has been so successful in getting bailed out companies to pay back their loans that even AIG is returning their money: When you look at the financial markets as a whole, the post-crisis bailout efforts have worked out better than expected. Many of the financial market guarantees were lifted without having been used, and the Treasury is turning a profit on the central component of the TARP. But AIG has so far loomed as a gigantic rebuttal to the optimists, a symbol of everything that went wrong. But it turns out that the efforts to prop up AIG are also working out much better than expected. AIG still owes the Fed and the Treasury a combined $127 billion. But—surprise!—AIG is paying a lot of its debts back. And there's a not too far-fetched scenario in which we come close to breaking even on our reluctant investment in the company.