WASHINGTON (Reuters) - Legislation to add stricter conditions to the U.S. Treasury Department’s $700 billion (461.7 billion pound) financial services bailout programme will also include help for municipalities, commercial real estate and auto dealers, a senior House Democrat said on Friday.
Rep. Barney Frank, chairman of the House Financial Services Committee, said he planned to release a draft bill later in the day setting stricter standards for the Treasury Department’s Troubled Asset Relief Program (TARP).
The Bush administration has already spent or committed $350 billion of TARP funds. The legislation Frank is proposing would add restrictions to the remaining half of the program’s funding.
“The municipalities, realtors, auto dealers -- all of them -- we’re talking about language that makes it clear that they get some help,” the Massachusetts Democrat told reporters.
Homeowners facing foreclosure will also get some relief, he said.
“We’re not going to be adding new powers that aren’t already in TARP. We’re going to require that some of them be used. A certain minimum amount is going to have to go for foreclosure relief,” Frank said before going into a closed-door meeting of House Democrats and aides to President-elect Barack Obama.
Separately, a draft report by a congressionally appointed TARP oversight panel criticized the Bush administration’s tracking of how TARP money was used by banks and said the program failed to allocate any TARP funds to stabilise the weak mortgage market.
Obama’s economic team is working on overhauling TARP to speed the flow of credit to consumers and the economy.
Frank’s bill will also include tougher executive compensation requirements for companies that accept federal money under TARP, he said.
“What I’ve told people and I‘m going to tell the banks is, look, you don’t like these but would you rather have no $350 billion?” Frank said. “What’s at issue here is not just this 350 (billion) but whether or not people have lost confidence in our ability to intervene in general. So I think they have an interest in working this out with us.”
Writing by Julie Vorman; Editing by Steve Orlofsky