Politics

Chairman Frank Statement on GAO TARP Report

By Karina

Chairman Barney Frank issued the following statement regarding the Government Accountability Office (GAO) report on the Treasury Department?s implementation of the Troubled Asset Relief Program (TARP):

The American people received two kinds of news about the TARP program ? bad and worse news.

The bad news was confirmation by the GAO in its first report about the program that Treasury has no way to measure whether taxpayer funds invested in banks are being used in accordance with the purpose of the law ? to increase lending. The much worse news is Treasury’s response that it does not even have the intention of doing so.

GAO recommended that metrics be developed to apply to how individual institutions are using their share of the 250 billion made available to them. Treasury’s extremely disappointing response is to engage in “further discussions on general metrics for evaluating the overall success of the capital purchase program in addressing the purposes of the EESA.

By rejecting the GAO?s recommendation that measurement is needed and substituting a vague promise to “evaluate the overall success of the program,” Treasury is coming very close to telling the institutions that they will be free to use the funds as they wish.

Adding this blatant refusal to enforce any lending obligations on individual intuitions the continued policy of ignoring the clear intent of the EESA to aid in the reduction of foreclosures put the Treasury perilously close to a breach faith with those who responded to the Bush Administration’s request to establish the program. A public hearing on the issues raised by the GAO report is now essential.

Read earlier coverage of the GAO report on The Gavel>>

Full post as published by The Gavel on December 03, 2008 (boomark / email).