WASHINGTON — Lawmakers have repeatedly demanded that the Treasury Department find a way to track how banks are using government capital infusions, but sources said nailing down where the money is going is impossible.

A few institutions have allocated the funds to a specific purpose, such as an acquisition, but most have simply absorbed the money on to their balance sheets. There is no way to verify how the money flows from there, observers said.

"The bankers cannot specifically identify which dollar of funding went to which loan," said William Longbrake, a director of the Federal Home Loan Bank of Seattle and First Financial Northwest Inc. "It goes into one big pool and goes out. That's how the business is run."

Lawmakers may try to force the issue anyway. The House unanimously approved an amendment last week to the automobile industry bailout bill that would have required banking companies receiving Troubled Asset Relief Program funds to report any change in lending that results. If a company could not accurately qualify the effects of government assistance, the amendment would have given it the option of detailing the amount of new lending.

Though the auto bill died in Congress, several observers said lawmakers are likely to try to force bankers next year to provide more details on how they used Tarp funds.

"It is an early indicator of what is expected next year," said Bert Ely, an independent analyst in Alexandria, Va.

But many saw the amendment — and the larger effort to require bankers to detail the use of Tarp funds — as an exercise in futility.

"It's basically superfluous with the information already being collected," said Lawrence Kaplan, of counsel at Paul, Hastings, Janofsky & Walker LLP.

But the amendment's sponsor, Rep. Steven LaTourette, R-Ohio, does not accept the premise that bankers do not know how they are spending government money.

"That's crap," said Rep. LaTourette in an interview last week. "I get their argument they've made, that money is fungible," but he was "not asking them to follow the dollar bill through their bank."

"What the amendment says is, if you took in $4 billion, did you engage in $4 billion of new lending, or did you use it for golden parachutes, other bank acquisitions, purchase of stock?" he said. "That's a pretty simple equation."

Treasury Secretary Henry Paulson touched off the debate in October when he assured lawmakers that bankers were using government funds to create lending programs. But the Government Accountability Office complained two weeks ago that the Treasury did not plan on tracking the money; Treasury officials countered that economic incentives inherent to the program would encourage further lending.

Lawmakers continued to press the issue last week, arguing that they have seen no sign bankers are using the money to finance new loans. House Financial Services Chairman Barney Frank, D-Mass., said he was troubled by the GAO's finding that the Treasury was not actively trying to track government funds.

Mr. Kashkari said that, in response to the GAO, the Treasury and federal banking and thrift regulators are developing a program to track the money.

"We are actively engaged with regulators to determine the best way to monitor these capital investments and bank lending," he said. "We may utilize a variety of supervisory information from insured depositories, including the Home Mortgage Disclosure Act data, the Community Reinvestment Act data, call report data, examination information contained in CRA public evaluations, as well as broader financial data and conditions."

Observers said it is unclear if supervisory data would be of much assistance. Quarterly data can reveal whether lending has gone up or down, but there would be no way to tell if that was because of Tarp funds, many said.

"You'd never know if it was due to having the Tarp money or if it was due to higher demand," said Robert Clarke, a partner at Bracewell & Giuliani LLP and a former comptroller of the currency. "I don't know how you could link Tarp money to specific lending. … It's just very difficult to tie the two together."

Rep. Frank said he planned to convene a hearing soon to hear directly from the chief executives of banking companies that received Tarp funds.

Last week James Dimon, the CEO of JPMorgan Chase & Co., which received $25 billion, appeared ready to use the money for lending.

"We got $25 billion in, and we're going to do exactly what they want us to do, which is make more loans, help this economy grow, and in effect we are making a lot more loans," Mr. Dimon said on CNBC.

But observers said it would be very difficult for Mr. Dimon to prove that his company has used the money in specific ways.

"It really is just a political game at this point," said Joe Mason, a professor at Louisiana State University and a former economist for the Office of the Comptroller of the Currency. "There's no way you can say 'OK, I had $3 billion of existing capital, and you gave me another $3 billion of capital.' What Congress is suggesting is you held these as separate piggy banks, and I used one piggy bank for this and another for this, but that's not how that happened. They went into one piggy bank."

Some observers blamed Mr. Paulson for causing the problem in the first place. They argue that he should have said the capital infusion was being used to stabilize banks, not for new lending.

"The Treasury left banks open to criticism," Prof. Mason said.

Industry representatives said expecting Tarp money to be used automatically for new lending was unrealistic, since loan demand remains low and there are dangers if bankers lend too freely.

"People need to understand banks are making every loan possible, and we don't want regulators and the political establishment requiring we make bad loans just because of Tarp," said Joe Belew, the president of the Consumer Bankers Association.

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