TARP Reform and Accountability Act of 2009

Floor Speech

TARP REFORM AND ACCOUNTABILITY ACT OF 2009 -- (House of Representatives - January 14, 2009)

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Ms. McCOLLUM. Mr. Chair, I rise today to express strong disappointment in the Treasury Department's failure to exercise oversight and accountability in its implementation of the Troubled Asset Relief Program, TARP, that Congress specifically required in the Emergency Economic Stabilization Act, EESA.

American families are struggling as we face the most major economic crisis since the Great Depression. Thousands of Minnesotans have lost their jobs or face foreclosure on their homes. Late last year, Congress, in consultation with the Bush administration, acted swiftly to pass EESA to aggressively address the financial crisis. The Troubled Asset Relief Program under this legislation was enacted so the Treasury Department could buy bad assets of financial institutions--including mortgage debt--to thaw credit markets and increase confidence in the financial system. The first $350 billion dollars of funding under the TARP were disbursed to the U.S. Treasury Department with the understanding that the funds to financial institutions would be tied to strong oversight and transparency to ensure maximum effectiveness in helping struggling Americans.

Unfortunately, the Treasury Department has ignored the original intent of the TARP. Instead of buying bad debt and stemming housing foreclosures, the Treasury has enacted the Capital Purchase Program, which has dumped billions into the banks in the hope of thawing the credit markets. This decision was matched with a complete failure to conduct oversight for the funds. Treasury has implemented none of the oversight of financial institutions that was called for in EESA.

Reports released this month from the Congressional Oversight Panel, COP, created by Congress to act as a watchdog, state, "The recent refusal of certain private financial institutions to provide any accounting of how they are using taxpayer money undermines public confidence.'' The Treasury Department's failure to hold financial institutions accountable means that American taxpayers have no idea what these institutions have done with hundreds of billions of dollars of taxpayer money. This is outrageous betrayal of the public trust and the intent of Congress.

While I appreciate the need for flexibility to go forth in response to this crisis, there is no excuse for an absolute failure to ensure accountability in the use of a massive taxpayer funded account. As Congress debates whether to release the second half of the TARP funds, an additional $350 billion, I urge the highest scrutiny and strongest demands of oversight for the Treasury Department and its plans for the remaining funds. The American people deserve nothing less. I appreciate Chairman Frank and President-Elect Obama's calls for increased accountability and transparency in the implementation of the TARP and look forward to working with the 111th Congress to enact timely, effective policy to address the foreclosure crisis, protect taxpayers, and boost our economy.

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