Panel criticizes Treasury over TARP
A Congressional oversight panel released a report today that criticizes the Treasury Department's handling of TARP money. Nancy Marshall Genzer reports that Congress now feels it has to clamp down on the department with more oversight.
Neel Kashkari, interim Assistant Treasury Secretary for Financial Stability and Assistant Secretary for International Affairs, participates in a House Financial Services Committee hearing on Capitol Hill in Washington, DC. The committee is hearing testimony on concerns regarding the Treasury Department's oversight regarding the troubled assets relief program. (Mark Wilson/Getty Images)
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TEXT OF STORY
Bob Moon: So, the next question is, what happened? Why does Congress feel it has to clamp down with more oversight of the Treasury Department? We got some answers today from a Congressionally-appointed oversight panel. Marketplace's Nancy Marshall Genzer reports.
Nancy Marshall Genzer: Congress created the independent panel as a watchdog over the $700 billion financial bailout administered by the Treasury Department. Today the watchdog howled about gaps in how Treasury is monitoring taxpayers' money.
Elizabeth Warren: Treasury is the one who set up the system. And they didn't put any tracking mechanisms on it.
That's Elizabeth Warren, the Harvard law professor who's heading the commission, speaking on ABC. The commission issued a scathing report today. It urged Treasury to keep better track of the bailout cash. And it said Treasury hasn't used the money to help homeowners directly, as Congress intended. Kathleen Day says Treasury hasn't lived up to its obligations to Congress. Day is with the Center for Responsible Lending. She says Treasury focused too much on getting banks to help homeowners voluntarily, rather than forcing loan modifications.
Kathleen Day: Mandatory adjustments, mandatory lowering of monthly payments on a mass scale, modifying, even millions of loans, quickly.
But Scott Talbott says that's not so easy. Talbott is the chief lobbyist for the Financial Services Roundtable, which represents the nation's biggest banks. He says many mortgages were sliced up and sold as securities to different investors, who would all have to sign off on a loan modification.
Scott Talbott: It's difficult to come up with a blanket program to help large groups of home buyers.
Treasury had no comment. But the watchdogs on the commission will have plenty more to say at a hearing next week.
In Washington, I'm Nancy Marshall Genzer for Marketplace.
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From Salt Lake City, UT, 01/12/2009
There's a simple solution to the sliced and diced mortgage bonds sold to absentee investors. Post notices that underlying loans will be modified and modify the loans if no one objects. Don't allow TARP recipients to object without adequate explanation. After all, American taxpayers own these banks.
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