Today, the Congressional Oversight Panel held a hearing with Treasury Secretary Geithner. The Congressional Oversight Panel was created to oversee the expenditure of the Troubled Asset Relief Program (TARP) funds authorized by Congress in the Emergency Economic Stabilization Act of 2008 (EESA) and is required to submit monthly reports to Congress on the use of the Treasury Secretary's authority under the EESA, the impact of the government's asset purchases on financial markets, the effect of transactions' disclosure on market transparency, and the effectiveness of the program on mitigating foreclosures and maximizing taxpayer benefits.
Congressional Oversight Panel Chair Elizabeth Warren opens the hearing:
“People are angry that even if they have paid their bills on time consistently and never missed a pay-ment, their TARP-assisted banks are unilaterally raising their interest rates or slashing their credit lines. People are angry that small businesses are threatened with closure because they can't get financing. People are angry when they read headlines of record foreclosures because even if they aren't personally facing trouble with their mortgages, they see their own property worth less and their communities declining as a result of the foreclosures all around them. People are angry because they are paying for programs that haven't been fully explained and that have no apparent benefit for their families or the economy as a whole, but still seem to leave enough cash in the system for lavish bonuses and golf outings. None of this seems fair.”
Richard Neiman, New York State Banking Superintendent, makes opening remarks discussing the comments and questions he received in response to a blog post soliciting questions for Secretary Geithner:
“I placed a blog post on a prominent website yesterday that asked people to submit questions to you. I placed it on the Huffington Post, because that blog reaches over ten million readers per month, thus representing a good, but imperfect, cross section of American opinion. Literally, within hours of the posting, there were hundreds of responses that expressed deep concerns and even skepticism about the program, many accompanied by deeply personal stories…Mr. Secretary, does Treasury have its own metrics in determining success in reaching its goals and if so, can they be shared with the American public be posted on your website so that all citizens can see how your plan is measuring up? My worry is that if you do not, one of the most common questions I encounter when I hear from people about your plan will remain unanswered. One person put it quite bluntly on the blog, stating ‘When are all those banks going to stop sitting on all that money and start lending again?’”
Chair Elizabeth Warren asks Secretary Geithner about the differences in addressing bank and auto stabilization:
“The auto industry has received taxpayer money, but it has been linked to changes in management, changes in business practices, breaking labor contracts, and causing bond holders to take losses, at a minimum. The banks have received ten times more money than the auto industry, and yet they seem to be receiving a very different treatment. So the question I have is, why the different treatment, and in particular, do you think the banks are better managed than the auto companies?”