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| Rep. Capuano (D-MA) spoke to the News about TARP and H.R. 230 |
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Provisions included in accountability act
By Keith Cheveralls
The
House of Representatives passed on Wednesday the TARP Reform and
Accountability Act, including with it a number of provisions proposed
by Mike Capuano, Somerville's Congressman. The act amended the Troubled
Asset Relief Program – better-known as the government's
700-billion-dollar bailout of the financial industry – in order to
ensure greater accountability in the distribution of the 350 billion
dollars that the Treasure Department has yet to distribute.
Among
the changes proposed by Capuano is the addition of language to restrict
the distribution of "golden parachutes" by institutions participating
in TARP, as well as language to allow the government to recover bonuses
paid on the basis of false or exaggerated earnings.
The term
"golden parachute" refers to the generous compensation packages given
to high-ranking executives at many troubled financial institutions upon
the executives' departure.
"If entities receiving these funds
are using them in ways that do not directly provide economic relief,
they should not be able to continue using the funds," a press release
from his office quotes Capuano as saying.
"Now that the Senate
has voted to allow the use of the second $350 billion, it is more
important than ever to place conditions on its use."
Other
changes proposed by Capuano include the addition of a measure to
prevent banks from evicting tenants from foreclosed properties for a
period of 90 days, as well as modifications to the board that oversees
the Treasury Department's administration of TARP. These modifications
will grant the board greater autonomy, as well as the ability to
override decisions made by the Treasury Department, according to a
press release.
Further debate on the issues surrounding TARP
occurred at a roundtable discussion Capuano held last Thursday. The
participants, from both academia and the private sector, spent much of
the two-hour session debating whether TARP has been effective.
"Many
felt that it was too early to gauge the true impact of TARP, and some
felt that additional money may indeed be needed to stabilize our
financial system," explained Capuano in an email.
But "broad
agreement" was reached concerning both the need for an economic
stimulus package focused on "job creation and retention" rather than on
tax cuts, and the need for enhancements to the present system of
regulations on the financial industry.
"Far too many Americans
continue to live on the verge of foreclosure and not nearly enough has
been done to address that ongoing problem," Capuano asserted, adding
that "the debate over the use of TARP will continue in the months
ahead, as work continues to stabilize the economy."
The TARP Reform and Accountability Act is now before the Senate.
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