Politics

TARP Oversight

By Karina

Today, the Congressionally mandated Oversight Panel on the Troubled Asset Relief Program (TARP) released its second report.

From the Congressional Oversight Panel:

?Because the questions we asked one month ago are important as ever, in this second report we lay out exactly what questions have been answered, what haven?t been answered and why these questions are important,? said Elizabeth Warren, the Chair of the Oversight Panel. ?The American people have a right to know how their taxpayer dollars are being used, and so far, they have not gotten the transparency and accountability they deserve.?

The report highlights four key areas that demand special attention:

1) Bank Accountability ? the Panel still does not know what banks are doing with the taxpayer money they have received.

2) Transparency ? confidence in markets can only be restored when information is transparent and reliable, but we still have no clear mechanism to ensure transparent and accurate asset valuation and no confidence that the dangers posed by toxic assets have been addressed.

3) Foreclosures ? Treasury has yet to take any steps to use TARP funds or develop plans to ?maximize assistance to homeowners,? as required by law.

4) Overall Strategy ? Treasury?s shifting explanations for its purposes and the tools used have exacerbated the Panel?s concern that Treasury does not have a coherent overall strategy and goals for use of the TARP funds.

Read the full report detailing each of Treasury?s responses to the Panel?s questions>>

Financial Services Committee Chairman Barney Frank introduced legislation today that will amend TARP provisions of the Emergency Economic Stabilization Act to strengthen accountability, close loopholes, increase transparency, and require Treasury to take significant steps on foreclosure mitigation. It also requires that Treasury act promptly to permit the smaller community financial institutions that have been shut out so far to participate on the same terms as the large institutions that have already received funds. Read the detailed outline>>

Speaker Pelosi in support of Chairman Frank?s legislation:

The Bush Administration has ignored the intent of Congress and the demand by American people for strong accountability and transparency in the financial rescue package. That is why, next week, the House will vote on legislation introduced today by Chairman Barney Frank that expands oversight, protects taxpayers? interests, and makes significant improvements to the law.

As a condition of receiving taxpayer dollars, financial institutions receiving federal funds must reach an agreement with the government on how those funds will be used and what benchmarks must be met. With stronger executive compensation provisions, we will close loopholes so that taxpayers are protected.

Nothing in the original legislation prevented the Treasury Department from aggressively stemming housing foreclosures. To ensure that the root cause of our economic downturn is addressed, Chairman Frank?s legislation directs Treasury to devote a minimum of $40 billion from the TARP for several strong and aggressive housing foreclosure mitigation initiatives.

I look forward to working with the incoming Administration to restore the flow of credit, stabilize markets, make the TARP more accountable, and protect American families from losing their homes.

Full post as published by The Gavel on January 09, 2009 (boomark / email).