A key federal regulator released a proposal to address the mortgage crisis Wednesday, calling on the Treasury Department to help troubled borrowers by lending them 20% of their mortgage principal to spur refinancing into more affordable loans.

WASHINGTON (Reuters) - Critics blasted a Treasury Department call for the $1.8 trillion hedge fund industry to better police itself, saying voluntary guidelines did little to protect investors and regulate the pools of capital.

Several major business organizations are banding together to fight the Treasury Department's plan to overhaul the nation's patchwork of financial regulation, less than two weeks after the proposal was unveiled.

Lawmakers and regulators said yesterday that an ambitious plan by the Treasury Department to revamp the nation's decades-old financial regulatory structure could require congressional action stretching over several years and would not help the economy out of its current credit crisis.

The Treasury Department on Monday will propose a far-reaching overhaul of the nation's financial regulatory structure that would reshape the relationship between Wall Street and Washington and redefine the responsibilities of some of the federal government's most powerful agencies, according to administration officials.

WASHINGTON (Reuters) - Leaders of the U.S. Senate Finance Committee on Wednesday asked the Federal Reserve, the Treasury Department, JPMorgan Chase & Co and Bear Stearns for more details about JPMorgan's plan to buy Bear Stearns.

-- Text of Treasury Secretary Henry Paulson's opening remarks before the Senate Banking Committee on Thursday, as provided by the Treasury Department:

Congress approved an economic stimulus package. The Treasury Department pressed lenders to reset mortgage rates for millions of troubled homeowners. And New York's insurance regulator is attempting to bail out a critical sector of the industry.

WASHINGTON -- At-risk borrowers with all types of mortgages, not just high-cost subprime loans, could be eligible for help under a new plan involving six big home lenders. The plan, called Project Lifeline, will be announced Tuesday by the Treasury Department and the Department of Housing and Urban Development, said a person familiar with the plan who confirmed earlier news reports about the plan but spoke on condition of anonymity because it had not yet been made public.

WASHINGTON (Reuters) - A senior Treasury Department official and the head of the Federal Deposit Insurance Corp said on Thursday they were keeping a close eye on mounting losses of bond insurance companies linked to subprime mortgages.