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The Treasury Department says about 436,000 borrowers have dropped out of the $75 billion plan as of last month. That’s about 35 percent of the 1.24 million who enrolled since March 2009.

The result could be a new wave of foreclosures that could weaken the housing market and hold back the broader economic recovery.

Most of those homeowners were rejected during a trial period lasting at least three months. About 6,357 dropped out after having their loans modified. About 340,000 homeowners, or 27 percent of those who started the program, have received permanent loan modifications and are making payments on time.

CONGRESS

Lawmakers reach tentative card deal

House and Senate lawmakers tentatively have agreed on how to regulate fees that banks charge merchants who accept payment with debit cards.

Under the deal, the Federal Reserve would not limit fees on transactions involving debit cards issued by the federal or state governments. Governments use debit cards for programs such as unemployment compensation or child-support payments. Several state treasurers argued that restricting fees paid by merchants could force banks to increase charges for the cards to states.

The deal also allows the Federal Reserve, which would write fee regulations, to consider costs that banks incur for preventing fraudulent use of the cards.

The agreement is part of broader legislation to regulate financial institutions.

PENTAGON

Investigators probe cash flow to insurgents

Criminal investigators are examining allegations that security firms in Afghanistan have been extorting money from contractors paid with U.S. tax dollars and funneling the spoils to warlords and the Taliban.

The payments reportedly end up in insurgent hands through a Pentagon contract to transport food, water, fuel and ammunition to American troops stationed at bases across Afghanistan. To ensure safe passage through dangerous areas, the trucking companies make payments to local security firms with ties to the Taliban or warlords who control the roads. If the payments aren’t made, the convoys will be attacked, according to the allegations.

A spokesman for the Army Criminal Investigation Command said Monday the inquiry is under way, but would not provide details.

From wire dispatches and staff reports