CQ Politics
Published: 11-14-08
Another top lawmaker expressed impatience Thursday with the financial sector’s response to the economic crisis following an infusion of federal funds suggesting companies have been slow to act in several areas that could improve the situation.
“I think I speak for many members of the committee and the Senate in saying that we want to see more progress from our friends in the financial sector — more progress in foreclosure mitigation in affordable lending and in curbing excessive compensation” Senate Banking Committee Chairman Christopher J. Dodd said.
“And if that progress is not forthcoming we are prepared to legislate — now if possible but next year if necessary.”
The Connecticut Democrat made his remarks at the latest in a series of congressional hearings on a financial crisis that has led to record home foreclosures bank failures and a widespread scarcity of credit.
Dodd’s House counterpart Financial Services Committee Chairman Barney Frank D-Mass. Wednesday said Congress should take up legislation to make it easier to renegotiate troubled mortgages citing what he called a lack of cooperation from mortgage providers.
Lawmakers also have expressed strong concern about how banks are using cash infusions from the federal government under the Treasury Department’s financial rescue program. They fear banks are hoarding the money or using it to acquire other banks instead of using it to make loans and ease the credit crunch.
Sen. Charles E. Schumer D-N.Y. said Treasury should review and approve any bank mergers completed with the help of funds from the program.
“While there are mergers that should take place to improve systemic stability and encourage lending . . . giving away government money so that it can be used to gobble up competitors that will not have any impact on the overall stability of the financial sector should not be endorsed” he said.
Schumer said he would push to give Treasury such authority and advocate other changes to the program — such as guidelines to encourage banks to increase lending — before Congress allows the department to start using the second half of the $700 billion Congress authorized for the program.
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