WASHINGTON — House Financial Services Committee Chairman Barney Frank said he plans to unveil legislation Friday that would set conditions on 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 specifics, saying only that the bill 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 also said that proposed changes to improve the Hope for Homeowners program "will be in the bill."
The Treasury has yet to request the remaining half of the $700 billion that the Oct. 3 bailout law allocated to Tarp. 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. 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 is unclear how hard President-elect Obama will press for the 90-day foreclosure moratorium he endorsed on the campaign trail. Rep. Frank shook his head "no" when asked if he was considering such a proposal himself.
The details of Rep. Frank's bill have been kept 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 Rep. Watt, the Financial Services Committee's oversight subcommittee chairman.