Today, the Domestic Policy Subcommittee of the House Oversight and Government Reform Committee held a hearing entitled "The Government as Dominant Shareholder: How Should the Taxpayers' Ownership Rights be Exercised?" to examine the way that common equity shareholder rights acquired by the Treasury Department under authorities provided in the Emergency Economic Stabilization Act of 2008 (EESA) have been exercised to date, and to assess alternative frameworks for exercising and protecting taxpayers' interests. Testifying before the Committee was Herbert M. Allison, Jr., Assistant Secretary for Financial Stability, United States Department of Treasury.

According to Mr. Allison's prepared testimony, in light of recent announcements of repayments by Bank of America, Citigroup, and Wells Fargo, and the government's various TARP investments, particularly in banks pursuant to the Capital Purchase Program, Treasury is "generating more income than previously anticipated," and "expects that the overall cost of the program will be at least $200 billion less than the $341 billion" previously projected in the August Mid-Session Review of the President's Budget. Mr. Allison briefly discussed "what objectives guide us in exercising our rights as a shareholder," stating that Treasury is a shareholder out of "necessity," its role as a shareholder is to "manage its investment, not to manage the company," and that Treasury intends to particularly dispose of its interests in Citigroup, Chrysler and GM as soon as possible. This is particularly noteworthy in light of Treasury's decision not to sell any of its 7.7 billion shares of Citigroup common stock in connection with Citigroup's recent public offering of common stock.

Finally, Mr. Allison discussed the need for financial regulatory reform and the Obama Administration's proposals announced this past summer, which were used to help craft the Wall Street Reform and Consumer Protection Act (H.R. 4173) passed last Friday by the House of Representatives.