Earlier today, following last week's highly critical report from the Government Accountability Office, the House Financial Services Committee held a five-hour hearing to examine oversight concerns regarding Treasury's conduct of the Troubled Asset Relief Program (TARP). Appearing at the hearing were the following witnesses: Panel I:
- Gene Dodaro, Acting Comptroller General of the United States, U.S. Government Accountability Office
- Neel Kashkari, Interim Assistant Secretary for Financial Stability and Assistant Secretary for International Affairs, U.S. Department of the Treasury
- Elizabeth Warren, Leo Gottlieb Professor of Law, Harvard University, and Chair, Congressional Oversight Panel under the Emergency Economic Stabilization Act
- Jeb Hensarling (R-TX), member Congressional Oversight Panel under the Emergency Economic Stabilization Act
Acting Comptroller General Dodaro presented the GAO's report, including various recommendations for actions that would "ensure integrity, accountability and transparency" in Treasury's administration of TARP. Assistant Secretary Kashkari faced harsh questions from committee members on both sides of the aisle, with the most pointed questions focusing on Treasury's failure to monitor whether banks are using the capital provided to them to increase lending to consumers and small businesses and its refusal to take more vigorous actions to stem a rising tide of mortgage foreclosures. While acknowledging a number of the criticisms in the GAO report, he defended the decisions made by Treasury to address the current financial crisis. He said Treasury is working with the other federal bank regulatory agencies to develop tools to monitor banks' use of TARP funds, but that Treasury's immediate priority has been to deploy the funds that Congress has authorized to stabilize the banking system. Chairman Frank asserted that Congress was unlikely to authorize the remaining $350 billion of EESA funding until Treasury demonstrated that it was monitoring bank lending activities. The committee also heard from Elizabeth Warren, Chair of the Congressional Oversight Panel, which presented its initial report earlier today, and from Jeb Hensarling, a Republican member of the oversight panel, who refused yesterday to endorse the initial report. The oversight panel's report is organized around ten essential questions that the panel believed "all Americans have a right to ask." As the oversight panel held its first meeting only two weeks ago, the panel's initial report does not attempt to answer these questions:
- What is Treasury's strategy?
- Is the strategy working to stabilize markets?
- Is the strategy helping to reduce foreclosures?
- What have financial institutions done with the taxpayers' money received so far?
- Is the public receiving a fair deal?
- What is Treasury doing to help the American family?
- Is Treasury imposing reforms on financial institutions that are taking taxpayer money?
- How is Treasury deciding which institutions receive the money?
- What is the scope of Treasury's statutory authority?
- Is Treasury looking ahead?