US House Panel Seeks Plans for Future of TARP

The U.S. Treasury would have to inform Congress by Dec. 1 on whether it expects to lend more from the $700 billion financial rescue plan under legislation approved late on Tuesday by a House of Representatives panel.

woodleywonderworks Treasury Seal

The House Appropriations Committee approved a $24.2 billion 2010 spending bill to bolster the Treasury Department and other government agencies like the Securities and Exchange Commission as they try to address the economic and financial crisis.

The measure requires the Treasury to report to Congress by Dec. 1 on any plans it has to extend new commitments from the Troubled Asset Relief Program, or TARP, which funneled billions of dollars into banks in a bid to thaw frozen credit markets.

It would also seek details on the Treasury's plans to ensure that money to stabilize the financial institutions and mortgage finance companies Fannie Mae and Freddie Mac are repaid as well as likely gains or losses.

The TARP program has come under blistering criticism from Republicans and Democrats for falling short in helping individuals facing foreclosure on their homes and that the Treasury used some of it to help troubled automakers.

The fund still has about $127 billion unallocated. Several of the largest U.S. banks repaid nearly $70 billion from the program last month.

The legislation now goes to the House floor for consideration, possibly next week, but lawmakers could try to change or remove the language. The Senate has yet to act on its version of the annual spending bill.

Both chambers would have to approve the same language for it to become law.

Lawmakers on the panel also approved an amendment aimed at restoring the economic rights of automobile dealers closed as a result of the bankruptcies of Chrysler and General Motors. But they acknowledged the provision faced hurdles and could be stripped from the legislation.

Also in the bill is a boost in funding for the Securities and Exchange Commission to address criticism that the agency failed to detect financial fraud by Bernard Madoff and alleged against Texas billionaire Allen Stanford.

The agency would receive just over $1 billion for fiscal 2010, $76 million more than last year and $10 million more than requested by the Obama administration. That would enable the SEC to hire about 140 more lawyers, analysts and investigators for detecting fraud.

Copyright 2009 Reuters. Click for restrictions.