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Fresh from paying back a $182 billion bailout, the board of American International Group Inc. will meet tomorrow to consider joining a $25 billion shareholder lawsuit against the government, the New York Times DealBook blog reported today. The lawsuit contends that the onerous nature of the rescue - the taking of what became a 92 percent stake in the company, the deal's high interest rates and the funneling of billions to the insurer's Wall Street clients - deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for "public use, without just compensation." Maurice R. Greenberg, AIG's former chief executive, who remains a major investor in the company, filed the lawsuit in 2011 on behalf of fellow shareholders. He has since urged AIG to join the case, a move that could nudge the government into settlement talks.

JPMorgan Chase & Co. asked a federal judge to order the Federal Deposit Insurance Corp. to cover any costs or liabilities in a bondholder case stemming from the bank's takeover of Washington Mutual Bank, Bloomberg News reported yesterday. JPMorgan said that under the terms of a 2008 agreement with the FDIC it should not be on the hook for any damages, attorneys' fees or court costs in a lawsuit filed by Washington Mutual bondholders accusing the bank of being involved in a scheme to deprive them of their investments. When it picked up Washington Mutual banking operations in September 2008, JPMorgan "assumed only certain defined liabilities," which did not include WaMu’s bond obligations, according to the court filing. WaMu’s debt obligations -- including the bonds at issue in the case -- were liabilities that remained with the FDIC, the bank said.

Bank of America agreed yesterday to pay more than $10 billion to Fannie Mae to settle claims over troubled mortgages that soured during the housing crash, mostly loans issued by the bank's Countrywide Financial subsidiary, the New York Times DealBook blog reported yesterday. Separately, federal regulators reached an $8.5 billion settlement yesterday to resolve claims of foreclosure abuses that included flawed paperwork used in foreclosures and bungled loan modifications by 10 major lenders, including JPMorgan Chase, Bank of America and Citibank. About $3.3 billion of that settlement amount will go toward Americans who went through foreclosure in 2009 and 2010, while $5.2 billion will address other assistance to troubled borrowers, including loan modifications and reductions of principal balances. Eligible homeowners could get up to $125,000 in compensation.

Global central bank chiefs gave lenders four more years to meet international liquidity requirements and watered down the measures in a bid to stave off another credit crunch, Bloomberg News reported today. Banks won the delay to fully meet the so-called liquidity coverage ratio (LCR) following a deal struck by regulatory chiefs meeting yesterday in Basel, Switzerland. They will be able to pick from a longer list of approved assets including equities and securitized mortgage debt as they seek to build up buffers of liquidity for use in a financial crisis. Banks and top officials such as European Central Bank President Mario Draghi pushed for changes to the LCR, arguing that it would choke interbank lending and make it harder for authorities to implement monetary policies. Lenders have warned that the measure might force them to cut back loans to businesses and households.

U.S. District Judge Jed Rakoff ruled that the bankruptcy judge overseeing Bernard Madoff’s liquidation can hear lawsuits the trustee brought against customers over fraudulent transfers and submit proposed rulings to a higher court, Bloomberg News reported on Friday. The decision Judge Rakoff is a defeat for Madoff defendants in more than 300 lawsuits, who had asked him to take the suits away from Bankruptcy Judge Burton Lifland in light of the Supreme Court's decision in Stern v. Marshall. “Efficiency” will be improved by having recommendations from a bankruptcy judge who has “both intimate familiarity with the underlying liquidation and substantial expertise in the bankruptcy law,” Judge Rakoff said in his ruling.

A federal appeals court revived a lawsuit accusing the U.S. Department of Housing and Urban Development of setting up its reverse-mortgage program in a way that makes it more likely a surviving spouse will end up in foreclosure, Bloomberg News reported on Friday. A three-judge panel of the U.S. Court of Appeals in Washington, D.C. on Friday ruled that a case brought by two widowers challenging HUD regulations on reverse-mortgage loans may proceed. The widowers claim that HUD rules on when loans become due and payable conflict with language in the law aimed at protecting surviving spouses from foreclosure.

Bank of America Corp. agreed to settle certain claims with Fannie Mae surrounding almost all of the mortgage loans originated by Countrywide Financial Corp and Bank of America National Association from 2000 through 2008, the Wall Street Journal reported today. Bank of America said that as part of the deal, it will pay Fannie Mae $3.6 billion. Bank of American also said it will pay Fannie $6.75 billion to repurchase "certain residential mortgage loans sold to Fannie Mae, which Bank of America has valued at less than the purchase price." The bank added that it expects to cover settlement costs from existing reserves, plus an additional $2.5 billion pretax charge taken in the fourth quarter of 2012.

Residential Capital LLC is seeking court permission to sell about $130 million in loans insured by the Federal Housing Administration, Dow Jones Newswires reported on Friday. In a Jan. 2 court filing, ResCap's lawyers said that it selected the mortgages from a larger lot of about $1 billion in loans. ResCap said that if it doesn't get the prices it wants for the loans, it will hold on to them until they are monetized, a process that usually takes between 30 and 36 months. The company said its unsecured creditors' committee supports the sale of the loans, which ResCap says are less risky because the collateral documentation for them is readily available.

Federal Reserve Governor Daniel Tarullo is pushing an agenda to regulate banks beyond the restraints in the Dodd-Frank Act, including making them fund more of their assets using long-term borrowing, Bloomberg News reported today. The Fed and the Federal Deposit Insurance Corp. are holding preliminary discussions on a rule that would require holding companies for the largest U.S. banks to maintain a minimum amount of long-term debt that would aid in winding them down in case they fail, FDIC spokesman Andrew Gray said. As the Fed governor in charge of bank supervision, Tarullo leads the central bank’s effort to implement the 2010 Dodd-Frank Act and is now pressing beyond it to limit the kind of systemic risks that required taxpayer-funded bailouts in the 2008-2009 financial crisis. Tarullo’s agenda for reducing risk also includes strengthening supervision of so-called shadow banking that falls outside traditional regulation and limiting the risk that the biggest banks once again become too big to fail through mergers and more complexity.

JPMorgan Chase & Co., Goldman Sachs Group Inc. and Bank of America Corp. won a delay of Dodd-Frank Act requirements that they wall off some derivatives trades from bank units backed by federal deposit insurance, Bloomberg News reported yesterday. Commercial banks including the Wall Street firms may get as long as an additional two years -- until July 2015 -- to comply with the rules, the Office of the Comptroller of the Currency said in a notice yesterday. The provision was included in Dodd- Frank, the 2010 financial-regulation law, as a way to limit taxpayer support for risky derivatives trades.