US Senate panel wants details on use of TARP money

July 10, 2009

    WASHINGTON, July 9 (Reuters) – A U.S. Senate panel on Thursday approved a $46.4 billion bill to fund the Treasury Department and pressed the agency to obtain more details about how recipients of the government’s $700 billion financial bailout are using the funds.
   The Senate Appropriations Committee approved the spending bill for 2010 as the Treasury Department, along with the Federal Reserve, have been trying to rescue ailing lenders struggling under the weight of the financial crisis.
   The Troubled Asset Relief Program (TARP) has come under blistering criticism about the lack of transparency and for being used to pour billions of dollars into troubled lenders rather than helping individuals facing home foreclosures.
   Scores of major U.S. banks received money from the program amid a global credit freeze, but many declined to detail how they used the funds, drawing criticism from lawmakers who were concerned that they were not using it to thaw the credit markets.
   The House of Representatives version went substantially further in making demands on the Treasury about the TARP, demanding that by Dec. 1 the department tell Congress whether it expects to lend more from the $700 billion fund next year.
   That measure also seeks details on the Treasury’s plans to ensure that money to stabilize the financial institutions and mortgage finance companies Fannie Mae <FNM.N> and Freddie Mac <FRE.N> are repaid as well as likely gains or losses.
   The House and Senate will have to work out their differences before the legislation can go to President Barack Obama for his signature.
   Also in the bill is a big funding boost for the Securities and Exchange Commission, which has been under fire for failing to detect fraud by financier Bernard Madoff and similar alleged wrongdoing by Texas billionaire Allen Stanford.
   The Senate bill offers almost $1.13 billion for the SEC, 16 percent more than it received last year and 9.7 percent more than Obama requested. The House measure provides just over $1 billion.
   The Senate Appropriations Committee also approved an amendment that would attempt to relax limits on shipping goods to Cuba, requiring payment before delivery rather than the Bush-era rule that requires payment before ships leave harbor.
   In response to concerns from the farm industry, Democratic Senator Byron Dorgan said there was “never a justification” to why the U.S. Treasury, which implements sanctions on Cuba, changed the policy on when payment was due. (Editing by Leslie Adler) ((jeremy.pelofsky@thomsonreuters.com; +1 202 898 8391; jeremy.pelofsky.reuters.com@reuters.net)) Keywords: FINANCIAL/BAILOUT TARP
  
Thursday, 09 July 2009 23:37:23RTRS [nN09346012] {C}ENDS

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