Rep Frank: TARP Money Should Be Used To Prevent Foreclosures
Tuesday November 18th, 2008 / 16h50
By Michael R. Crittenden Of DOW JONES NEWSWIRES WASHINGTON -(Dow Jones)- A key architect of Congress' $700 billion financial rescue package said Tuesday there was "disappointment" among lawmakers that the U.S. Treasury Department refuses to use any funds to help reduce the record levels of housing foreclosures that continue to weigh on the economy. House Financial Services Chairman Barney Frank, D-Mass., said at a hearing that there were an "overwhelming and powerful" list of reasons why Treasury should use some portion of the Troubled Asset Relief Program to help cash-strapped borrowers. "[It is] essential we do something to use some of the TARP funds," to prevent foreclosures, Frank said in his opening remarks before a hearing featuring Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke and FDIC Chairman Sheila Bair. Paulson, and the Bush administration more broadly, have resisted calls from both Democrats and Republicans to do more to deal with rising levels of foreclosures. Paulson, in his testimony, said that he does not agree that rescue fund money should be put into foreclosure prevention. "While I understand the interest in spending TARP resources on other approaches, the efforts already underway will do more to prevent foreclosures that might have been achieved through very large purchases of mortgage-related securities through the TARP," Paulson said. Frank, however, noted that when Congress wrote the law creating the financial rescue program it very explicitly wrote that Treasury should make every effort to try and reduce foreclosures while carrying out the program. "Of all the changes that have come with the program, this wouldn't be a change. This is the program," Frank said in remarks directed at Paulson. "The argument that this is not part of the program [doesn't work]." -By Michael R. Crittenden, Dow Jones Newswires; 202-862-9273; michael.crittenden@dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/al?rnd=ca%2BNpgo7zosg6xjniF472A%3D%3D. You can use this link on the day this article is published and the following day.
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