WASHINGTON -- House Financial Services Committee Chairman Barney Frank said he plans to unveil legislation Friday that would condition the release of the remaining $350 billion of Troubled Asset Relief Program funds.
The Massachusetts Democrat said his bill would require the Treasury Department to use the money for foreclosure relief, institute lending requirements for banks that receive capital from the program, and strengthen executive compensation requirements.
Talking to reporters on Wednesday, Rep. Frank said he expected to hold a hearing on the bill next week. He declined to provide explicit details, saying only it would include “foreclosure relief, a guarantee that money will be re-lent, strict restrictions on compensations, and then some other things as well.”
Rep. Frank added that proposed changes to improve the Hope for Homeowners program “will be in the bill.”
Treasury has yet to request the remaining half of the $700 billion allocated to Tarp by the Oct. 3 bailout law. Secretary Henry Paulson reiterated Wednesday he has no plans to ask for the money, unless the incoming Obama administration asks him to do so.
But Rep. Frank said he has no intention of waiting on a formal request.
“We don’t have to wait for them,” he said. “I think we should do a bill whether they ask or not. What we’re focused on now is having a bill on the floor that will set conditions for the second half of Tarp. I think that’s necessary if they’re going to have it.”
Rep. Frank said he has been in talks with the incoming Obama administration to secure its support for the legislation.
“We’ll also need -- and have been talking to – [Treasury] Secretary-to-be [Tim] Geithner,” he said. “We’ll need the President-to-be to say that he supports it, so that he’ll abide by it, so those conversations are going on,” Rep. Frank said. “It’s going to mean foreclosure relief and help for freeing up automobile credit; getting real lending from the banks -- that’s what we are working on and we’ll have that out on Friday.”
It’s unclear how hard President-elect Obama will press for the 90-day foreclosure moratorium he endorsed on the campaign trail. Asked about whether he was considering such a proposal, Rep. Frank shook his head “no.”
The details of Rep. Frank’s bill have been kept tightly under wraps. Even Rep. Mel Watt, D-N.C., a prominent member of the House Financial Services Committee, said in a brief interview Wednesday that he is not sure what will be included.
“A lot of behind-the-scenes stuff is going on between the leadership of the committee and the leadership of the House and the administration, but nothing formally,” said the North Carolina Democrat, who serves as the Financial Services Committee’s oversight subcommittee chairman. “We all have concerns that the money that has gone out has not been placed in the specific purposes that we were told it would be used for, nor has it specifically gone for ameliorating the foreclosure problem.”
Rep. Maxine Waters, D-Calif., the housing subcommittee chairwoman, reintroduced a bill Tuesday that would implement the modification plan proposed by Federal Deposit Insurance Corp. Chairman Sheila Bair. Ms. Bair’s plan provides a framework for streamlining modifications and would allocate about $25 billion from the Tarp to provide cash incentives to servicers and cover loan guarantees.