Senate Banking Committee leaders announced long-awaited plans to dismantle mortgage giants Fannie Mae and Freddie Mac, advancing what observers expect will be a multi-year effort to revamp the nation’s housing finance system. ¶ The bipartisan measure would replace the U.S.-owned mortgage financiers with government bond insurance that would kick in only after private capital suffered losses of at least 10 percent. ¶ The news pushed the companies’ common shares to their biggest drop in 10 months on Wednesday. Fannie Mae shares tumbled 31 percent to close at $4.03. Freddie Mac fell 27 percent to close at $4.04. ¶ The plan omits at least one major detail: What happens to the private investors who scooped up the mortgage companies’ shares in hopes of getting a portion of their recently stellar profits?


General Motors faced growing pressure as a review of federal crash data found that 303 drivers and front-seat passengers died in accidents in which air bags did not inflate in two models that the automaker recalled last month. The review by Friedman Research was commissioned by the Center for Auto Safety, a consumer group. GM recalled 1.6 million vehicles to repair the defective part, which the automaker said had played a role in 12 deaths. The Justice Department is reportedly investigating whether GM broke any laws with its slow response to a problem with ignition switches in compact cars from model years 2003 to 2007.

BP and the Environmental Protection Agency reached an agreement that lifts a ban on BP’s ability to hold government contracts that has barred the company from bidding on oil and gas leases on federal lands and waters because of the massive oil spill triggered by a blowout on a BP well in April 2010. BP is the largest lease-holder and one of the largest oil producers in the Gulf of Mexico.

Mt. Gox, the American affiliate of the bankrupt Bitcoin exchange that lost track of hundreds of millions of dollars’ worth of virtual currency, had its U.S. assets frozen by a federal judge in Chicago.

Herbalife, the nutritional-products maker, is being investigated by the Federal Trade Commission. Herbalife has been battling hedge fund manager Bill Ackman’s allegations that it is running a thinly disguised pyramid scheme. The company sells nutrition and health products through independent salespeople in more than 80 countries.

Target’s security software detected potentially malicious activity during the data breach, but its staff decided not to take immediate action, the retailer said. Bloomberg Businessweek reported that Target’s security team in Bangalore, India, had received alerts from a FireEye security system on Nov. 30, after the attack was launched, and sent them to Target headquarters in Minneapolis. About 40 million payment card records were stolen from the retailer, along with 70 million other records that contained customer information such as addresses and telephone numbers.

Target’s sales were hit by the breach and the number of people visiting its stores and Web site fell to the lowest level in three years. Only 33 percent of U.S. households shopped at Target in January, a drop of 22 percent from a year ago, according to Kantar Retail, a consulting group. Shoppers who stayed away the most included Gen-Xers — its core demographic — and lower-income, infrequent shoppers who make up a large part of its customer base.

McDonald’s workers in three states sued the fast-food chain and some franchise owners, alleging employees were forced to work off the clock, cheated out of overtime and denied rest breaks.

Sbarro filed for bankruptcy for the second time in three years as the pizza chain watches foot traffic slow in the malls that many of its restaurants occupy.

AT&T completed its purchase of Leap Wireless International after winning final regulatory clearance of a $1.2 billion deal that adds customers and airwaves to the second-largest U.S. wireless carrier.

The Justice Department asked a federal judge Monday to approve terms for the merger of American Airlines and US Airways under a settlement reached in November, without making any changes after a mandated public comment period. The settlement requires the combined airline to sell 104 of its time slots at Reagan National Airport. American sold most of the slots it must divest at Reagan National to Southwest, JetBlue and Virgin America.

King Digital Entertainment, maker of the smartphone game Candy Crush Saga, will seek as much as $24 a share in its initial public offering, potentially raising about $533 million. Candy Crush was the most downloaded free app and the top-revenue-grossing app in 2013.


The average 30-year fixed mortgage rate increased to 4.37 percent from 4.28 percent last week. The 15-year average rose to 3.38 percent from 3.32 percent.

February’s retail sales were 0.3 percent higher, but January’s sales fell by 0.6 percent, down from the initial estimate of 0.4 percent, because of the harsh winter, a weak holiday season and excessive discounts that hurt profits.


Sarah Bloom Raskin was confirmed by the Senate as deputy secretary at the Treasury, making her the highest-ranking woman in the agency’s history.

President Obama announced a change to overtime rules that would make more Americans eligible for extra pay.


Fannie Mae and Freddie Mac could send about $179.2 billion in profit to taxpayers during the next 10 years if the terms of their bailout remain intact, the White House said. Fannie Mae and Freddie Mac have operated under federal conservatorship since 2008. They received $187.5 billion in taxpayer funds, but they have returned to profitability, and by the end of March they will have had paid $202.9 billion in dividends to the Treasury.

— From news services and staff reports

$1.8 billion
Sale price of Jos. A. Bank

Men’s Wearhouse agreed to buy the Maryland-based retailer, ending six months of wrangling. The company will be the country’s fourth-largest men’s retailer, with $3.5 billion a year in sales and more than 1,700 stores. Jos. A. Bank’s brand will stay independent.