[Congressional Record Volume 155, Number 20 (Monday, February 2, 2009)]
[Extensions of Remarks]
[Pages E171-E172]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               TARP REFORM AND ACCOUNTABILITY ACT OF 2009

                                 ______
                                 

                               speech of

                           HON. RUSH D. HOLT

                             of new jersey

                    in the house of representatives

                      Wednesday, January 21, 2009

       The House in Committee of the Whole House on the State of 
     the Union had under consideration the bill (H.R. 384) to 
     reform the Troubled Assets Relief Program of the Secretary of 
     the Treasury and ensure accountability under such Program, 
     and for other purposes:

  Mr. HOLT. Mr. Chair, I rise today to reiterate my support for H.R. 
384, The TARP Reform and Accountability Act of 2009. President Obama 
supported the release the second $350 billion in funds authorized by 
the Emergency Economic Stabilization Act (Public Law 110-343), and it 
is incumbent upon us both to provide him with the same level of 
resources the outgoing Administration had to tackle this economic 
crisis, and to improve and strengthen the terms under which those 
resources will be deployed as compared to the terms under which the 
previous Administration was operating.
  The legislation we approved would make many important improvements to 
the Emergency Economic Stabilization Act, EESA, and the Troubled Asset 
Relief Program, TARP. For example, the TARP Reform and Accountability 
Act focuses on the mortgage foreclosure crisis, which is central to the 
broader economic crisis, by requiring the Treasury immediately to 
commit no less than $40 billion and as much as $100 billion on 
foreclosure mitigation efforts. The bill would mandate that at least 
$20 billion be applied directly to a systematic program to guarantee 
loan modifications for families in danger of losing their homes, and 
requires that a foreclosure mitigation plan be developed and 
implemented quickly.
  In addition, it would increase the availability of credit to 
consumers, municipalities and businesses. It would clarify that TARP 
authority includes authority to support the availability of consumer 
loans, including auto loans and student loans, and authority to support 
state and local governments through the purchase of or provision of 
credit enhancement for municipal securities. It would also provide 
additional assistance to auto manufacturers under the TARP as an 
extension of the emergency assistance provided by the outgoing 
Administration. Finally, it would add restrictions on executive 
compensation for institutions receiving TARP funding, and strengthen 
and expand accountability and oversight by requiring assisted 
organizations to report to Congress on a quarterly basis on their use 
of TARP funding, and requiring FDIC-insured depository institutions to 
report on changes in lending activity related to TARP funding.
  For these reasons, I supported H.R. 384, which passed overwhelmingly 
in the House on January 21. I proposed a number of amendments to the 
bill, simply to strengthen it even further, and I was very pleased that 
one of those amendments was included in the Manager's Amendment before 
the bill went to the floor. My amendment went to the heart of the TARP 
program--the troubled assets--defined by the TARP as ``residential or 
commercial mortgages and any securities, obligations, or other 
instruments that are based on or related to such mortgages'' issued on 
or before March 14, 2008. These troubled assets are hard to value. An 
auction is one way to value them. My amendment would help us finally 
establish values for the troubled assets, liquidate them, and free up 
the credit markets, without using taxpayer dollars.
  Indeed, even two weeks ago, the Treasury Department had little 
positive to say about lending activity. In his statement of January 13, 
2009, Interim Assistant Secretary for Financial Stability Neel Kashkari 
noted that ``we are still at a point of low confidence--both due to the 
financial crisis and the economic downturn. As long as confidence 
remains low, banks will remain cautious about extending credit . . . we 
should not be surprised that lending and borrowing will be lower during 
this current economic downturn [but we] absolutely need our banks to 
continue to make credit available.''
  My amendment would require the Treasury Secretary to facilitate an 
auction of troubled assets, not using TARP funds for the purchase, but 
by soliciting bids from institutions that volunteer to participate. If 
the auction does not take place within three months of the enactment of 
the TARP Reform and Accountability Act, the Treasury Secretary is 
required to report to Congress with an explanation as to why, and a 
description of the mechanism by which the Secretary feels the troubled 
assets could most expeditiously be valued and liquidated. My amendment 
protects taxpayer dollars because while the auction of troubled assets 
is required, no TARP funds would be used for the purchase. Further my 
amendment will give Treasury and Congress much needed information to 
help develop better-informed plans for addressing the issue going 
forward.
  I would like to thank Chairman Frank, again, for including this 
simple but important measure in the TARP Reform and Accountability Act. 
I would also like to thank Chairman Frank for promising to work with me 
to implement another reform, which we both agree is needed to ensure 
fairness in the allocation of TARP funds. That measure would provide 
that an institution that has applied for but been denied TARP funding 
could appeal the denial to the Financial Stability Oversight Board. 
Such a measure would be valuable to banks such as the National City 
Bank of Cleveland, which had applied for TARP funds, had not received 
them, and was then taken over by another bank which had received TARP 
funds. The public is outraged that takeovers of that nature can occur 
on the government's dime. I thank Chairman Frank for agreeing to work 
with me to provide additional protections for viable banks which 
applied for but have been denied TARP funds.
  I supported the TARP Reform and Accountability Act, and if the Senate 
does not promptly take up and complete the measure, I will be eager to 
work with President Obama to address our economic crisis under terms 
and conditions that provide much better taxpayer protections than those 
that had been in operation under the outgoing Administration.

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