When it comes to getting a mortgage, there are banks and non-banks that make loans.

Does it matter?

From American public media, this is Marketplace.

In Denver, I'm Amy Scott in for Kai Rizdal. It's Tuesday, February 17th. Good to have you with us.

We're going to start with a different kind of Fed story than usual. Typically, we talk about the central bank in terms of where interest rates might be headed.

But the Federal Reserve regulates banks,

too. And in a speech yesterday, a top Fed official said the central bank is rethinking some regulations affecting mortgages. The changes would encourage banks to make more home loans.

And as Marketplaces Sabree Beneshire reports, that could make it easier for the rest of us to get mortgages.

After the 2008 crash, banks bolted out of the mortgage business.

Before the Great Recession, about 70% of loans were originated by banks. Now it's only about 30%.

Thomas Piskorski is a professor of finance at Columbia Business School.

One reason was they got burned so bad by the home loans they made.

Another reason, according to Piskorski's research, was regulation drove them out.

It accounts for about 60% of that migration.

Specifically, new rules said banks had to set aside a bunch of money in reserve

as a kind of safety cushion should things go bad. A lot of banks felt it was too much money,

so they just didn't want to deal with it. A lot of this activity have moved to the unregulated

sector, to the non-banks. Non-banks like fintech companies. That's not necessarily a problem,

he says, but it does mean banks aren't out there swimming in the sea of competition to give

you a home loan. And proposed Biden-era rules would have tightened those regulations even more.

Yesterday, the Fed said, let's maybe not. So here's what they want to do.

One, a reduction in the amount of capital that banks will have to hold against loans that

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