WASHINGTON — Several Senate Banking Committee members pressured the Treasury Department on Thursday to require banks that receive an emergency capital injection to use the funds for lending activities and foreclosure prevention.

During a hearing on regulatory responses to the crisis, lawmakers said there are concerns that bankers will sit on the added cash.

"Why did Treasury not attach a requirement to increase lending as a price for receiving government money?" asked Sen. Richard Shelby of Alabama, the committee's senior Republican.

Lawmakers also used the hearing to press the Treasury on whether it would follow through on a provision of the massive rescue bill enacted Oct. 3 that allows it to grant loan guarantees and credit enhancements to lenders that agree to faster loan modifications.

Federal Deposit Insurance Corp. Chairman Sheila Bair made another plug for such a program Thursday and said discussions are under way about using the power soon.

But many of the questions focused on why the Treasury has not added more strings in return for giving banks capital.

Neel Kashkari, the Treasury's point main on the implementation of the Troubled Assets Relief Program, which includes the capital injection plan, said the department did not want to add too many requirements on banks. Doing so, he said, would risk scaring away regional and small institutions that it hopes will partake in the $125 billion that remains to be doled out.

"We agree with the spirit of that, and we want our banks to lend, but we also don't want to be in a position of micromanaging our institutions," Mr. Kashkari said. "If we came out with very specific guidance … we were afraid that we would discourage … healthy institutions from participating."

Clearly unsatisfied, Sen. Shelby continued to press his point. "But one of the big rationales from Treasury in injecting this money … was to make them perhaps more solvent and have more capital to lend. Is that central to the whole scheme here?"

After Mr. Kashkari said yes, Sen. Shelby asked, "Why aren't you insisting on in a macro sense that they not horde the money?"

Senate Banking Chairman Chris Dodd, D-Conn., and Sens. Charles Schumer and Robert Menendez pushed the point, too.

Sen. Schumer said the Treasury — at the very least — should issue guidelines suggesting that banks redistribute a specific proportion of capital into loans. The New York Democrat also said the guidelines should prohibit the capital from being used to enable banks to fund investments in risky or exotic products.

"What about guidelines against new investments in these exotic financial instruments that brought so many of these institutions down to begin with? That's an easier one to write," he said.

Mr. Kashkari would not answer the question directly. He insisted maximum flexibility is necessary to implement the program's ideals.

Lawmakers also continued to appeal for more aggressive action to contain foreclosures.

Sen. Dodd asked Ms. Bair point blank if her agency could take charge of a program to offer credit enhancements and loan guarantees in return for lenders agreeing to a loan modification program.

"Do you think the FDIC has the capacity to get this program up and running quickly, and would the FDIC be willing to take up this task?" he asked.

Ms. Bair said that the Treasury was responsible for implementing such a program, and that discussions within the Bush administration on whether to operate it were still ongoing.

Sen. Dodd acknowledged that he had spoken to Ms. Bair and Treasury Secretary Henry Paulson about the plan behind the scenes, but he asked for public assurances that it would get up and running soon. Ms. Bair said: "We are having very good discussions with the Treasury. We are sharing some ideas. We want to respect the process and be true to the process."

The government should "provide incentives for modifications … to reach a larger number of loans," she said. "We think that looking at credit enhancements is one way." Such steps would make modifications "more palatable, if not irresistible."

In response to further questioning from Sen. Tim Johnson, D-S.D., about the foreclosure problem, Ms. Bair said it was clear the government had to do something else.

"We are falling behind," she said. "We need to act. We need to act dramatically. We need to act quickly. … Economic incentives need to be provided to make these work, particularly for those that are in securitization trusts."

But lawmakers feared Mr. Paulson and Mr. Kashkari did not share her sense of urgency. Sen. Dodd noted that Mr. Kashkari's testimony listed foreclosure prevention as fifth behind other priorities, and the senator said he wanted to see progress soon.

Mr. Paulson "is determined to get this program up and running," Sen. Dodd said. "That's the impression I had from our conversation," but it would "help a lot if there was a heightened sense of urgency."

Though Mr. Kashkari promised the committee that preventing foreclosures was paramount to the Treasury, he would not commit to a specific plan.

"We are looking very closely" at the loan guarantee program "and working with our colleagues in the administration to understand how it would be implemented, what tax implication it would have, and how it would react with our other programs," he said. "So it is something that we are very seriously considering."

Sen. Dodd said that implementation of a new program would fall to a new administration, and that he had talked to both presidential campaigns about the need to install the next president's economic team as quickly as possible after the election.

"I would even go so far as to suggest that the next president ought to ask this president to submit the name of that secretary of the Treasury to be confirmed in a lame duck session," he said. "I think the symbolism and the importance of that transition seamlessly — and you wouldn't have to reconfirm that person, I'm told … I like the idea."

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