This week, Congress is back in session and the financial regulatory committees will be hard at work on a system overhaul. Thrown into the mix is a new set of rules governing private equity investments in failed banks, put out to comment by the Federal Deposit Insurance Corp.

For all Citigroup's perceived flaws in the Chuck Prince era, the company seemed to make steady and visible progress under the lawyer's watchful eye in terms of its internal controls and its relationship with the myriad regulators who oversee its far-flung operations. In the past week, however, there have been signs of slippage — with one instance bearing more than a passing resemblance to difficulties it faced before Prince's governmental-relations repair work.

Congress is out this week and Washington will be quieter for it. But the Federal Deposit Insurance Corp. will hold a board meeting on Thursday to discuss rules for investing in or buying failed banks. The outcome could be big news for private equity hopefuls and non-bank lenders looking for more than just a charter.

Why has Congress’ search for accountability in the financial crisis been such a disappointment?

Federal Reserve Chairman Ben Bernanke faces a grilling today by the House Committee on Oversight and Government Affairs on his role in allegedly forcing Bank of America to buy Merrill Lynch late last year. BankThink is bringing you live coverage from the hearing, at which Bernanke will be the only witness. Republicans on the committee turned up the heat yesterday with a memo detailing accusations that Bernanke and other senior Fed officials coerced BofA Chief Executive Ken Lewis to go through with merger despite Lewis’ objections, then covered up information about the enormity of Merrill’s losses. The memo includes excerpts from emails between senior Fed officials revealing key details such as discussions on how to delay Merrill’s public fourth quarter earnings filing, as well as the exclusion of the Office of the Comptroller of the Currency from discussions on the imperiled deal.

Will Bernanke be able to defend his contentions that the Fed acted prudently and out of necessity? How will today’s hearing affect President Obama’s regulatory restructuring plan, which would hand the central bank significantly more power? More personally, will this endanger Bernanke’s chances for reappointment? Stay tuned to find out.

For David Nelms, who has spent the last three years filling in Discover Financial Services’ acceptance gap in Japan, a trip there this week will include an unusual victory lap.

Remember the good ol’ days of lemonade and big front porches and grandpa with his candies and—wait; let’s try that again. Remember when the drive-thru bank tellers at your local branch recognized you and sent lollipops for your kids through the pneumatic tube?

House Financial Services Committee Chairman Barney Frank is determined not to waste Congress’ last week in session before the July 4 break: He plans to charge ahead with regulatory restructuring hearings. The Senate Banking Committee will also hold a hearing on part of the regulatory restructuring effort. Elsewhere in Washington, the Federal Open Market Committee will meet—though the outcome of that gathering isn’t really a nail-biter. Afterwards, Fed Chairman Ben Bernanke will be called to justify Bank of America’s acquisition of Merrill Lynch to Congress.

“Too many cooks,” declared the Economist; “basically punts on the question of how to keep it from happening all over again,” Paul Krugman wrote in today’s New York Times; “an exercise in political triangulation,” says the Washington Post’s Steven Pearlstein.

During today’s Senate Banking Hearing on the Obama Administration’s regulatory restructuring proposal, Treasury Secretary Timothy Geithner got cheeky about a chairmanship. What was he really talking about?

This morning Treasury Secretary Timothy Geithner will answer questions from the Senate Banking Committee on the Obama Administration’s new regulatory restructuring plan and BankThink will be keeping you up today with a live blog of the hearing. Watch for some tough grilling on the proposal to give the Federal Reserve the power to monitor and regulate systemic risk. The committee members have been particularly resistant to the idea of giving the Fed more power, and several of them voiced fresh concerns yesterday after President Obama announced the plan. Geithner will have to defend the plan twice today; this morning's Senate hearing will be followed by one in the House Financial Services Committee.

Do women really want special credit cards? (Decades of struggling for economic parity: priceless.)

Writing for the Bank Innovation blog, Michael Gibbs, last week offered three stories from the major papers chronicling separate victories for the banking lobby. He concluded that by reasserting its strength, the lobby is showing how banks are regaining ground in the power struggle with federal regulators and thusly reviving themselves as drivers of economic growth. In other words, Gibbs is saying that a stronger banking lobby and stronger banks can get the economy back on track. But does that make sense?

This week, the Treasury Department faces another Monday deadline, but the agency may miss this one too: The first round of big banks permitted to repay their Tarp funds may be revealed. Word is that if the announcement comes at all on Monday, it will come late in the day. On the Hill, regulatory restructuring discussions will pick up speed.

He doesn't fit the usual profile of a "thin-file" consumer, but Citigroup Inc. executive Robert A. Annibale has personal experience with the perils of a blank credit history.