Rep Frank: Foreclosure Relief Condition Of TARP Funds
12/08 02:04 PM
WASHINGTON (Dow Jones)--House Financial Services Chairman Barney Frank, D- Mass., said Congress wouldn't release the last installment of financial rescue funds to the Treasury unless the Bush administration took more aggressive action to prevent foreclosures and pushed banks that received federal capital infusions to relend the money.
"They're not going to get the $350 [billion] unless they get very serious about foreclosure modification and showing us that we're going to get some lending out of the banks," Frank told reporters at a housing conference in Washington Monday.
"At this point, I don't see that happening," he added.
Treasury has burned through $335 billion of its $700 billion financial rescue authority, committing $250 billion for cash injections into banks. The administration needs approval to access the last $350 billion from Congress, where sentiment against the Troubled Asset Relief Program, or TARP, is running high.
In remarks before the housing conference, Franks said administration officials would "need police protection to even ask for the money."
Frank and other Democrats have criticized Treasury for not requiring banks that have received TARP funds to relend the money. They have also pushed for a portion of TARP funds to be used to spur more loan modifications.
Treasury Secretary Henry Paulson has resisted both ideas, saying attaching strings to the bank capital program would discourage firms from applying. He has suggested TARP funds were not intended to help spur loan modifications.
Frank said he would press Treasury Interim Assistant Secretary for Financial Stability Neel Kashkari on both issues at a hearing before his panel Wednesday.
-By Jessica Holzer, Dow Jones Newswires; 202-862-9228; jessica.holzer@ dowjones.com
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