Congressional Oversight Panel; Printed from http://cop.senate.gov.

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Statement of Chair Elizabeth Warren on Rep. Hensarling's Resignation and Welcoming Mark McWatters to the Congressional Oversight Panel

December 10, 2009

WASHINGTON, D.C. - Congressional Oversight Panel Chair Elizabeth Warren released the following statement thanking Congressman Jeb Hensarling for his service and welcoming Mark McWatters to the Panel:

"Over the past 12 months I have had the privilege of serving with Jeb on the Congressional Oversight Panel. During the production of the 15 oversight reports on the Troubled Asset Relief Program that we have worked together on, the Panel has benefited from his unique understanding of the financial markets. I am grateful for his service to the American people and wish the best for him and his family in the years to come.

"We have all come to know and respect Mark as he served as Congressman Hensarling's advisor on issues related to the Panel. I look forward to continuing our partnership with him in our oversight work as we seek to bring increased transparency and accountability to the Troubled Asset Relief Program."

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 to provide recommendations on regulatory reform. The Panel members are former Securities and Exchange Commissioner Paul S. Atkins; Mark McWatters; Richard H. Neiman, Superintendent of Banks for the State of New York; Damon Silvers, Policy Director and Special Counsel for the AFL-CIO; and Elizabeth Warren, Leo Gottlieb Professor of Law at Harvard Law School.


Congressional Oversight Panel Takes Stock of the Financial Rescue

December 9, 2009

While TARP Helped Stop Economic Panic, Underlying Weaknesses in U.S. Financial System Remain

WASHINGTON, D.C. - The Congressional Oversight Panel today released its December oversight report, "Taking Stock: What Has the Troubled Asset Relief Program Achieved?" The Panel found concluded that TARP was an important part of a broader government strategy that stabilized the U.S. financial system. It is apparent after 14 months, however, that significant underlying weaknesses in the financial system remain.

The Troubled Asset Relief Program (TARP) was the centerpiece of the federal government's multi-pronged response to the financial crisis. While it is impossible to disentangle TARP from other rescue efforts, it is clear the program played a critical role in renewing the flow of credit and preventing a more acute crisis. The Panel found that this overwhelming fiscal response, however, created an implicit guarantee for major financial institutions that distorts pricing for capital and encourages excessive risk-taking. Unwinding this guarantee poses a difficult long-term challenge.

In the Emergency Economic Stabilization Act (EESA), the law establishing TARP, Congress established broad goals that went beyond the short-term objective of easing the panic. The Panel's review found that many ongoing problems indentified by Congress remain in the financial markets and broader economy:

Unemployment and Foreclosures Continue to Plague the Economy. Despite the unprecedented government actions to bolster the faltering economy, unemployment remains at its highest level in 25 years. With one in every eight American homes in foreclosure, it appears that TARP's foreclosure mitigation programs have not achieved the scope, scale, and permanence necessary to address the crisis. These core economic problems are by banks continuing reluctance to lend and the continuing reluctance of many small businesses and consumers to borrow.

The Health of Financial Institutions is Far From Certain. A nearly unprecedented number of bank failures this year has put the FDIC in the red for the first time in 17 years. Problems in the commercial real estate sector are likely to inflict further damage on small- and mid-sized banks, while some major financial institutions continue to hold their toxic assets, waiting for a rebound in prices that may be years away.

Markets Remain Dependent on Government Support and Distorted by Moral Hazard. It is unclear whether the market can withstand the removal of the extraordinary government support put in place as a response to last year's crisis. At the same time, the unprecedented government actions taken to stabilize the system have infected the pricing of assets and the measurement of risk.

Once again, the Panel urges Treasury to make both its decision-making and actions more transparent. TARP has gone through several different incarnations with evolving benchmarks and changing metrics for success within the various programs. The Panel concluded, "Transparency and accountability may be painful in the short run, but in the long run they will help restore market functions and earn the confidence of the American people."

The full report is available at cop.senate.gov.

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 to provide recommendations on regulatory reform. The Panel members are: former Securities and Exchange Commissioner Paul S. Atkins, Congressman Jeb Hensarling (R-TX), Richard H. Neiman, Superintendent of Banks for the State of New York, Damon Silvers, Policy Director and Special Counsel for the AFL-CIO and Elizabeth Warren, Leo Gottlieb Professor of Law at Harvard Law School.


Congressional Oversight Panel Announces Hearing with Treasury Secretary Timothy Geithner

December 3, 2009

WASHINGTON, D.C. - The Congressional Oversight Panel today announced that it will hold a hearing with Treasury Secretary Timothy Geithner on Thursday, December 10 at 10:00 a.m. in 138 Dirksen Senate Office Building.

WHO: Members of the Congressional Oversight Panel on TARP
WHAT: Congressional Oversight Panel Hearing with Secretary Geithner
WHEN: Thursday, December 10, 2009; 10:00 am
WHERE: 138 Dirksen Senate Office Building

The hearing is open to press and public and will be webcast on the Panel's website at www.cop.senate.gov. Individuals with disabilities who require an auxiliary aid or service, including closed captioning service for webcast hearings, should contact the Panel's staff at 202-224-9957 at least two business days in advance of the hearing date.

The Congressional Oversight Panel was created to oversee the expenditure of Troubled Asset Relief Program (TARP) funds authorized by Congress in the Emergency Economic Stabilization Act of 2008 (EESA). The Oversight Panel members are former Securities and Exchange Commissioner Paul S. Atkins; Congressman Jeb Hensarling (R-TX); Richard H. Neiman, Superintendent of Banks for the State of New York; Damon Silvers, Policy Director and Special Counsel for the AFL-CIO; and Elizabeth Warren, Leo Gottlieb Professor of Law at Harvard Law School.


Congressional Oversight Panel to Hear from Independent Experts about TARP's Effectiveness

November 12, 2009

On Thursday, November 19, the Congressional Oversight Panel will hold a hearing entitled "Taking Stock: Independent Views on TARP's Effectiveness." The Panel will hear from several prominent economists about their perspectives on the performance to date of the Troubled Asset Relief Program (TARP).

The Panel is currently scheduled to hear from the following witnesses:

Dean Baker, Co-Director, Center for Economic and Policy Research

Charles Calomiris, Henry Kaufman Professor of Financial Institutions, Columbia Business School

Simon Johnson, Professor of Global Economics and Management, MIT Sloan School of Management, and Senior Fellow, Peterson Institute for International Economics

Alex Pollock, Resident Fellow, American Enterprise Institute

Mark Zandi, Chief Economist and Cofounder, Moody's Economy.com

Congress created the Congressional Oversight Panel to oversee the $700 billion Troubled Asset Relief Program. In carrying out its responsibilities under the Emergency Economic Stabilization Act of 2008, the Panel has published 12 monthly reports, two special reports, and held 13 hearings on a wide range of TARP and related financial stabilization initiatives.

This hearing will provide a better understanding of the Administration's financial stabilization efforts, and it will inform the Panel's December report reviewing TARP's performance to date.

WHO: Members of the TARP Congressional Oversight Panel

WHAT: "Taking Stock: Independent Views on TARP's Effectiveness"

WHEN: Thursday, November 19, 2009, 9:30 a.m.

WHERE: 138 Dirksen Senate Office Building

The hearing is open to press and public and will be webcast on the Panel's website at www.cop.senate.gov. Individuals with disabilities who require an auxiliary aid or service, including closed captioning service for webcast hearings, should contact the Panel's staff at 202-224-9957 at least two business days in advance of the hearing date.

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 to provide recommendations on regulatory reform. The Panel members are: former Securities and Exchange Commissioner Paul S. Atkins, Congressman Jeb Hensarling (R-TX), Richard H. Neiman, Superintendent of Banks for the State of New York, Damon Silvers, Policy Director and Special Counsel for the AFL-CIO, and Elizabeth Warren, Leo Gottlieb Professor of Law at Harvard Law School.


Congressional Oversight Panel Releases Report on the Use of Government-Backed Guarantees to Promote Financial Stability

November 6, 2009

While Taxpayers Will Likely Profit, Guarantees Carry Enormous Risk and Created Significant Moral Hazard

WASHINGTON, D.C. - The Congressional Oversight Panel today released its November oversight report, "Guarantees and Contingent Payments in TARP and Related Programs." The Panel found that the programs' income will likely exceed their direct expenditures, and that guarantees played a major role in calming financial markets. These same programs, however, exposed American taxpayers to trillions of dollars in guarantees and created significant moral hazard that distorts the marketplace.

During the financial crisis, the federal government dramatically expanded its role as a guarantor. Treasury, the FDIC, and the Federal Reserve Board together negotiated to secure hundreds of billions of dollars in assets belonging to Citigroup and Bank of America. In addition to increasing the deposit insurance coverage of bank accounts, the FDIC established the Debt Guarantee Program (DGP) to stimulate the market for banks to issue debt and raise capital, and Treasury acted to reassure anxious investors by guaranteeing that money market funds would not fall below $1.00 per share.

Altogether, the federal government's guarantees have exceeded the total size of TARP, making guarantees the single largest element of the government's response to the financial crisis. At its high point, the federal government was guaranteeing or insuring $4.3 trillion in face value of financial assets under the three guarantee programs discussed in the Panel's report. The enormous scale of these guarantees played a significant role in calming the financial markets last year. Lenders who were unwilling to risk their money in distressed and uncertain markets became much more willing to participate after the U.S. government promised to backstop any losses.

The Panel found that Treasury took an aggressive stance in protecting taxpayer interests, and the Panel did not identify any major flaws with their implementation of the guarantee programs. Even so, these programs carried significant risk. In many cases, the American taxpayer stood behind guarantees of high-risk assets held by potentially insolvent institutions.

These guarantee programs also created significant moral hazard. Guarantees create price distortions and can lead market participants to engage in riskier behavior than they otherwise would. In addition to the explicit guarantees analyzed in the Panel's report, the government's broader economic stabilization effort may have signaled an implicit guarantee to the marketplace: the American taxpayer stands ready to provide a financial backstop for certain markets and large market players to avert possible economic collapse. To the degree that investors, lenders and borrowers believe that such an implicit guarantee remains in effect, moral hazard will continue to distort the market.

The extraordinary scale of these guarantees, the significant risk to taxpayers, and the corresponding moral hazard leads the Panel to conclude that these programs should be subject to extraordinary transparency. The Panel specifically identified the guarantee of Citigroup assets under AGP -- the largest single guarantee offered to date -- and strongly urges Treasury to provide regular, detailed disclosures about the status of the assets backing up this guarantee. Treasury should disclose greater detail about the rationale behind guarantee programs, the alternatives that may have been available and why they were not chosen, and whether these programs have achieved their objectives. This should include an analysis of why Citigroup and Bank of America were selected for AGP and not others.

Recommendations are provided in the full report, which can be found at cop.senate.gov.

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 to provide recommendations on regulatory reform. The Panel members are: former Securities and Exchange Commissioner Paul S. Atkins, Congressman Jeb Hensarling (R-TX), Richard H. Neiman, Superintendent of Banks for the State of New York, Damon Silvers, Policy Director and Special Counsel for the AFL-CIO and Elizabeth Warren, Leo Gottlieb Professor of Law at Harvard Law School.


Congressional Oversight Panel Announces Hearing with Assistant Treasury Secretary Herbert M. Allison, Jr.

October 15, 2009

WASHINGTON, D.C. - On Thursday, October 22, the Congressional Oversight Panel will hold a hearing with Herbert M. Allison, Jr., the Assistant Secretary of the Treasury for Financial Stability, to conduct oversight of the Troubled Asset Relief Program.

WHAT: Congressional Oversight Panel Hearing with Herbert M. Allison, Jr., Assistant Secretary of the Treasury for Financial Stability

WHO: Members of the TARP Congressional Oversight Panel

WHEN: Thursday, October 22, 2009, 10:00 a.m.

WHERE: Dirksen Senate Office Building, Room 562

The hearing is open to press and public and will be webcast on our website at www.cop.senate.gov.

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 to provide recommendations on regulatory reform. The Panel members are: former Securities and Exchange Commissioner Paul S. Atkins, Congressman Jeb Hensarling (R-TX), Richard H. Neiman, Superintendent of Banks for the State of New York, Damon Silvers, Associate General Counsel of the AFL-CIO and Elizabeth Warren, Leo Gottlieb Professor of Law at Harvard Law School.


Congressional Oversight Panel Releases Assessment of Foreclosure Mitigation Efforts

October 9, 2009

Treasury's Strategy is 'Inadequate' to Address Coming Wave of Foreclosures; For Many Homeowners, Foreclosure Will Be Delayed, Not Avoided

WASHINGTON, D.C. - The Congressional Oversight Panel today released its October oversight report, "An Assessment of Foreclosure Mitigation Efforts after Six Months." The Panel expresses concern about the limited scope and scale of the Making Home Affordable program and questions whether Treasury's strategy will lead to permanent mortgage modifications for many homeowners.

Rising unemployment, weak home prices, and impending mortgage rate resets still threaten to cast millions of Americans out of their homes, with devastating effects on families, local communities, and the broader economy. One in eight mortgages is currently in foreclosure or default, and this crisis is estimated to produce 10 to 12 million foreclosures. While Treasury is still in the early stages of implementing its centerpiece foreclosure mitigation program, called the Home Affordable Modification Program (HAMP), the Panel has three concerns with the current approach.

The Panel found, "It increasingly appears that HAMP is targeted at the housing crisis as it existed six months ago, rather than as it exists right now." The program is limited to certain mortgage configurations. Many of the coming foreclosures are likely to be payment option adjustable rate mortgage and interest-only loan resets, many of which exceed HAMP eligibility limits. Treasury's strategy also makes no provision for foreclosures due to unemployment, which now appear to be one of the biggest drivers of foreclosure.

Foreclosures continue every day as Treasury ramps up the program, with foreclosure starts outpacing new HAMP trial modifications at a rate of more than two to one. Some homeowners who would have qualified for modifications may have lost their homes before the program could reach them. Even once the program is fully operational, Treasury's own projections indicate, in the best case, fewer than half of the predicted foreclosures would be avoided.

The Panel found, "The result for many homeowners could be that foreclosure is delayed, not avoided." HAMP modifications are often not permanent: For many homeowners, payments will rise after five years, and although the program is still in its early stages, only a very small proportion of trial modifications have converted into longer term modifications. The Panel is also concerned about homeowners who face negative equity or are "underwater" - that is, the value of the loan exceeds the value of their home. For many borrowers, HAMP modifications increase negative equity, a factor that appears to be associated with increased rates of re-default.

The full report can be found at cop.senate.gov. The Panel held a field hearing in Philadelphia with senior executives of Treasury, Fannie Mae, Freddie Mac, representatives for major financial institutions and housing advocates to inform the findings of this report. Testimony from the hearing can be found on the Panel's website.

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 to provide recommendations on regulatory reform. The Panel members are: former Securities and Exchange Commissioner Paul S. Atkins, Congressman Jeb Hensarling (R-TX), Richard H. Neiman, Superintendent of Banks for the State of New York, Damon Silvers, Associate General Counsel of the AFL-CIO and Elizabeth Warren, Leo Gottlieb Professor of Law at Harvard Law School.


Congressional Oversight Panel to Hold Mortgage Foreclosure Hearing in Philadelphia

September 17, 2009

WASHINGTON, D.C. - The Congressional Oversight Panel today announced that it will hold a field hearing to examine foreclosure mitigation efforts under the Troubled Asset Relief Program (TARP) on Thursday, September 24 at 10:00 a.m. in the Kirby Auditorium of the National Constitution Center in Philadelphia, Pennsylvania.

The Panel is currently scheduled to hear from the following witnesses:

Seth Wheeler, Senior Advisor, U.S. Department of the Treasury
Edward L. Golding, Senior Vice President, Economics and Policy, Freddie Mac
Eric Schuppenhauer, Senior Vice President and CFO/Program Executive for the Home Affordability and Stability Plan, Fannie Mae
The Honorable Annette M. Rizzo, Judge, Philadelphia Court of Common Pleas and Co-Chair, Philadelphia Mortgage Foreclosure Steering Committee
Eileen Fitzgerald, Chief Operating Officer, Neighborworks America
Deborah Goldberg, Director, Hurricane Relief Project, National Fair Housing Alliance
Irwin Trauss, Supervising Attorney, Consumer Housing Unit, Philadelphia Legal Assistance
Dr. Paul Willen, Senior Economist and Policy Advisor, Research Department, Federal Reserve Bank of Boston
Joe Ohayon, Vice President for Community and Client Relations, Wells Fargo Home Mortgage
Bank of America (invited)
Saxon Mortgage (invited)

In establishing the Congressional Oversight Panel in the Emergency Economic Stabilization Act of 2008, Congress charged the Panel to examine, among other subjects, "the effectiveness of foreclosure mitigation efforts." The Philadelphia hearing will inform the Panel's forthcoming October oversight report, which will consider foreclosure mitigation programs under TARP, including the Making Home Affordable program.

WHO: Members of the TARP Congressional Oversight Panel

WHAT: Field Hearing on Foreclosure Mitigation

WHEN: Thursday, September 24, 2009; 10:00 a.m.

WHERE:
Kirby Auditorium (Google Map)
The National Constitution Center
Independence Mall
525 Arch Street
Philadelphia, Pennsylvania 19106

The Congressional Oversight Panel was created to oversee the expenditure of Troubled Asset Relief Program (TARP) funds authorized by Congress in the Emergency Economic Stabilization Act of 2008 (EESA). The Oversight Panel members are former Securities and Exchange Commissioner Paul S. Atkins, Congressman Jeb Hensarling (R-TX), Richard H. Neiman, Superintendent of Banks for the State of New York, Damon Silvers, Associate General Counsel of the AFL-CIO, and Elizabeth Warren, Leo Gottlieb Professor of Law at Harvard Law School.


Congressional Oversight Panel Releases Report on TARP Use for Auto Industry

September 9, 2009

Treasury Tough Negotiator, but Unlikely to Recover Full Investment

Recommends Placing Chrysler, GM Shares in Independent Trust

WASHINGTON, D.C. - The Congressional Oversight Panel today released its September oversight report, "The Use of TARP Funds in Support and Reorganization of the Domestic Automotive Industry." In protecting the interests of taxpayers, the Panel found Treasury negotiated aggressively with all the players in the automotive industry. While Treasury has conceded that it is unlikely to recover the entire amount invested, other goals also influenced Treasury's overall strategy.

Even before last year's financial crisis, the American automotive industry was facing severe strains. In 2008, U.S. automotive sales fell to a 26-year low. By the end of the year, a long-term slump became an acute crisis, with Chrysler and General Motors (GM) unable to secure credit and facing reduced consumer demand. Without new financing, they faced collapse - a potentially crippling blow to the American economy that could eliminate nearly 1.1 million jobs. Facing this prospect, the Troubled Asset Relief Program (TARP) was used to provide American automotive companies with short-term financing and additional loans to finance the bankruptcy reorganizations of Chrysler and GM.

American taxpayers now own 10 percent and 61 percent of the new Chrysler and GM companies respectively. Treasury's support for the automotive industry differed significantly from its assistance to the banking industry. The bulk of the funds were available only after the companies had filed for bankruptcy, wiping out their old shareholders, cutting their labor costs, reducing their debt obligations and replacing some top management. The government's role raises serious oversight issues, particularly Treasury's conflict between competing objectives.

The Panel recommends that, to mitigate the potential conflicts and political issues inherent in owning Chrysler and GM shares, Treasury should take exceptional care to explain its decision making and provide a full, transparent picture of its actions. The Panel also recommends that Treasury consider placing its GM and Chrysler shares in an independent trust that would be insulated from political pressure and government interference.

Given the questions about whether Treasury had the authority to use of TARP funds to aid the ailing domestic automotive industry, Treasury should provide a legal analysis justifying this decision. The Panel found that further questions about the propriety of the bankruptcy proceedings - accusations of illegal behavior and allegations that statutory bankruptcy priorities were overturned - are overblown and inaccurate. The full report can be found at cop.senate.gov.

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 to provide recommendations on regulatory reform. The Panel members are: former Securities and Exchange Commissioner Paul S. Atkins, Congressman Jeb Hensarling (R-TX), Richard H. Neiman, Superintendent of Banks for the State of New York, Damon Silvers, Associate General Counsel of the AFL-CIO and Elizabeth Warren, Leo Gottlieb Professor of Law at Harvard Law School.

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Congressional Oversight Panel Announces Hearing with Treasury Secretary Timothy Geithner

September 3, 2009

WASHINGTON, D.C. - The Congressional Oversight Panel announced today that it will hold a hearing with Treasury Secretary Timothy Geithner on Thursday, September 10 at 1:00pm on Capitol Hill.

WHO: Members of the Congressional Oversight Panel on TARP
WHAT: Congressional Oversight Panel Hearing with Secretary Geithner
WHEN: Thursday, September 10, 2009; 1:00pm
WHERE: 485 Russell Senate Office Building

The Congressional Oversight Panel was created to oversee the expenditure of Troubled Asset Relief Program (TARP) funds authorized by Congress in the Emergency Economic Stabilization Act of 2008 (EESA). The Oversight Panel members are former Securities and Exchange Commissioner Paul S. Atkins, Congressman Jeb Hensarling (R-TX), Richard H. Neiman, Superintendent of Banks for the State of New York, Damon Silvers, Associate General Counsel of the AFL-CIO, and Elizabeth Warren, Leo Gottlieb Professor of Law at Harvard Law School.


Chair Elizabeth Warren Welcomes Paul Atkins to the Congressional Oversight Panel

August 20, 2009

WASHINGTON, D.C. - Congressional Oversight Panel Chair Elizabeth Warren released the following statement welcoming former Securities and Exchange Commissioner Paul S. Atkins to the Panel:

"Paul Atkins will bring valuable insights to the Congressional Oversight Panel's efforts to increase the accountability of the Troubled Asset Relief Program. I look forward to working with him and I welcome his service on behalf of the American people."

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 to provide recommendations on regulatory reform. The Panel members are former Securities and Exchange Commissioner Paul Atkins; Congressman Jeb Hensarling (R-TX); Richard H. Neiman, Superintendent of Banks for the State of New York; Damon Silvers, Associate General Counsel of the AFL-CIO; and Elizabeth Warren, Leo Gottlieb Professor of Law at Harvard Law School.


Congressional Oversight Panel Releases Oversight Report on the Continued Risk of Troubled Assets

August 11, 2009

Financial Stability is at Risk if the Underlying Problem of Troubled Assets Remains Unresolved

WASHINGTON, D.C. - The Congressional Oversight Panel (COP) today released its August oversight report, "The Continued Risk of Troubled Assets," which examines the economic implications of troubled assets and assesses Treasury's strategy for removing these assets from bank balance sheets. The Panel found that the future performance of the economy and the performance of the underlying loans, as well as the method of valuation of the assets, are critical to the continued operation of the banks.

Last fall, as increasing numbers of subprime mortgage-holders defaulted on their loans, the financial markets for these assets effectively ceased to function. In response to the crisis, Treasury proposed a major government program to move hundreds of billions of dollars in troubled assets off the banks' books. But by the time the Troubled Asset Relief Program (TARP) was signed into law in early October, Treasury had decided to use TARP funds to pursue a different strategy: providing banks with a capital buffer to write-down many of their troubled assets and to build reserves for the future. Today, ten months later, substantial troubled assets remain on banks' balance sheets.

Treasury has launched the new Public-Private Investment Program (PPIP) in an effort to restart the mortgage-backed asset market. The Panel's report raises several questions about the program, including whether accounting rules that allow banks to carry assets at higher valuations will diminish their willingness to sell, and whether potential buyers may decline to participate due to concerns about political interference or government restrictions. PPIP could help to jump-start the troubled asset market, but serious questions remain about its effectiveness.

For smaller banks, those not among the 19 stress tested bank holding companies, troubled assets pose special challenges that have not been acknowledged. These banks' troubled assets are generally whole loans, which are not currently being addressed by Treasury's PPIP program. These banks also hold greater concentrations of commercial real estate loans, which pose a threat of high defaults. These banks also have more difficulty accessing the capital markets, which heighten concerns about their stability.

Treasury and relevant government agencies should move toward greater disclosure of the terms and volume of troubled assets on banks' balance sheets. Because banks typically disclose few details about the toxic assets on their books, it is difficult to gauge the magnitude of the risk that these assets pose to the financial system. Greater transparency would allow for better judgments about the scale of the problem and the adequacy of the government's response.

If the economy worsens beyond the levels considered in the recent stress tests, these tests should be repeated. Stress tests have the potential to gauge the impact of troubled assets on bank capitalization and to measure the risk that troubled assets could once again trigger instability. The Panel recommends that stress tests be adapted to consider the challenges facing smaller banks, including the adequacy of these banks' capital.

The full report can be found at cop.senate.gov.

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 to provide recommendations on regulatory reform. The Panel members are: Congressman Jeb Hensarling (R-TX), Richard H. Neiman, Superintendent of Banks for the State of New York, Damon Silvers, Associate General Counsel of the AFL-CIO, former U.S. Senator John E. Sununu (R-NH) and Elizabeth Warren, Leo Gottlieb Professor of Law at Harvard Law School.


Congressional Oversight Panel to Hold Auto Industry Hearing in Detroit

July 23, 2009

WASHINGTON, D.C. - The Congressional Oversight Panel announced today that it will hold a field hearing on the Auto Industry Financing Program (AIFP) under the Troubled Asset Relief Program (TARP) on Monday, July 27 at 10:00am in the Spencer M. Partrich Auditorium at the Wayne State University Law School in Detroit, Michigan.

The Panel is currently scheduled to hear from the following witnesses:

  • Ron Bloom, Senior Advisor, U.S. Department of the Treasury
  • Jan Bertsch, Senior Vice President, Treasurer, and Chief Information Officer, Chrysler
  • Walter Borst, Treasurer, General Motors Company
  • Sean McAlinden, Executive Vice President and Chief Economist, Center for Automotive Research
  • Barry Adler, Charles Seligson Professor of Law, New York University School of Law
  • Stephen Lubben, Daniel J. Moore Professor of Law, Seton Hall University School of Law
  • Richard Mourdock, Indiana State Treasurer

In the Emergency Economic Stabilization Act of 2008 (EESA), Congress created the Congressional Oversight Panel to "review the current state of financial markets and the regulatory system" including the "impact of purchases made" and the "extent to which information made available on transactions under the program has contributed to market transparency." The Department of Treasury announced the creation of AIFP on December 19, 2008, to support the domestic automobile industry through TARP in order to further stabilize the nation's economy.

The Panel will release a report on Treasury's use of its authority under TARP with respect to the automobile industry on September 9, 2009, and the field hearing in Detroit will allow the Panel to gain a better understanding of the use of TARP in the government's intervention in the auto industry.

WHO: Members of the TARP Congressional Oversight Panel

WHAT: Congressional Oversight Panel Hearing: Field Hearing on Auto Industry Financing Program

WHEN: Monday, July 27, 2009; 10:00 a.m.

WHERE:
Wayne State University Law School
Spencer M. Partrich Auditorium
471 W. Palmer St.
Detroit, MI 48202

Campus Map Courtesy of Wayne State University available at: http://www.campusmap.wayne.edu/location/LAW

Audio will be streamed online during the hearing and later posted in its entirety on the Panel's website at cop.senate.gov.

The Congressional Oversight Panel was created to oversee the expenditure of Troubled Asset Relief Program (TARP) funds authorized by Congress in the Emergency Economic Stabilization Act of 2008 (EESA). The Oversight Panel members are Congressman Jeb Hensarling (R-TX), Richard H. Neiman, Superintendent of Banks for the State of New York, Damon Silvers, Associate General Counsel of the AFL-CIO, former US Senator John E. Sununu (R-NH), and Elizabeth Warren, Leo Gottlieb Professor of Law at Harvard Law School.


Congressional Oversight Panel Releases Special Report on Farm Credit

July 21, 2009

Report lays out several options for farm loan restructuring

WASHINGTON, D.C. - The Congressional Oversight Panel today released its "Special Report on Farm Loan Restructuring" fulfilling a mandate under the Helping Families Save Their Homes Act of 2009 to analyze "the state of the commercial farm credit markets and the use of loan restructuring as an alternative to foreclosure by recipients of financial assistance under the Troubled Asset Relief Program (TARP)."

The Panel's report first examines the state of the agricultural sector and notes that, in general, it has fared somewhat better than the broader economy. The balance sheets of farmers and agricultural lenders have remained relatively strong, though some parts of the agricultural economy, most notably dairy are in crisis. Rural areas were generally less exposed to the housing bubble, providing some protection for rural community banks from the shock of the financial crisis, until more recently.

Recent trends and projections in farm lending are troubling. The U.S. Department of Agriculture (USDA) expects net farm income to decline by 20 percent in 2009, which may reduce some farmers' ability to repay loans later in the year, although the impact may be mitigated by an increasing reliance on off-farm income. Demand for direct operating loans from the agricultural lender of last resort, the Farm Service Agency (FSA), increased 81 percent over the last year, and demand for direct ownership loans increased 132 percent.

Congress asked the Panel to examine the possibility of establishing a farm loan restructuring mandate for TARP-recipient commercial banks in order to prevent agricultural foreclosures. The Panel looked at several existing programs: the Farm Service Agency's process, the Farm Credit System and the Home Affordable Modification Program (HAMP) as possible models for actions under TARP to aid farmers.

The report notes that the effects of any loan restructuring mandate for TARP recipient commercial banks could be limited, as TARP-recipient banks only hold about 10 percent of total farm real estate debt. That share could shrink when more banks exit TARP.

In addition to actions under TARP, the Panel noted that Congress could also choose to help struggling farmers by creating a voluntary restructuring program, funded through TARP, and open to wider participation, or by expanding existing farm assistance programs to target assistance to struggling sectors.

The full report can be found at cop.senate.gov. The Panel held a field hearing on July 7 in Greeley, Colorado to take testimony from local farmers and agriculture lenders - including the USDA, the Farm Credit System and commercial banks - in order to gain a better understanding of farm credit markets. Testimony from the hearing can be found on the Panel's website.

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 to provide recommendations on regulatory reform. The Panel members are: Congressman Jeb Hensarling (R-TX), Richard H. Neiman, Superintendent of Banks for the State of New York, Damon Silvers, Associate General Counsel of the AFL-CIO, former U.S. Senator John E. Sununu (R-NH) and Elizabeth Warren, Leo Gottlieb Professor of Law at Harvard Law School.


Congressional Oversight Panel Releases Oversight Report on TARP Repayments and Repurchase of Stock Warrants

July 10, 2009

So Far Treasury Has Sold Warrants Back at 66 Percent of Panel's Best Estimate of Fair Market Value

WASHINGTON, D.C. - The Congressional Oversight Panel (COP) released its July oversight report today, "TARP Repayments, including Repurchase of Stock Warrants."

In late 2008, the economy faced an exceptional crisis, and Congress created the Troubled Asset Relief Program (TARP) in an effort to stabilize the financial system. When Congress authorized the commitment of $700 billion to rescue the financial system, it decided that taxpayers should have the opportunity to share in a potential upside if the banks returned to profitability.

The opportunity to profit from TARP investments comes through special securities called warrants. Banks that received financial assistance were required to give the government warrants for the future purchase of some of their common shares. If the value of the bank stock rose above the warrant price, Treasury could make a profit for the taxpayers.

Currently many banks want to exit the TARP program by repaying their financial assistance and repurchasing their warrants from Treasury. Any exit from the TARP system implicates an important policy question: If the banks give up federal support prematurely, will the economy suffer as a result? The Panel discussed this issue in its June report examining whether the stress tests were rigorous enough to test the strength of the banks.

Now that Treasury has decided that some banks can repay, it is the Panel's mandate to determine whether the taxpayer is receiving maximum benefit from TARP. Because the warrants that accompanied TARP assistance represent the only opportunity for the taxpayer to participate directly in the increase in the share prices of banks made possible by public money, the price at which the warrants are sold is critical. To determine whether Treasury is valuing the warrants in a way that maximizes the taxpayers' investment in the financial institutions, the Panel conducted its own detailed technical valuation of the warrants Treasury holds.

The Panel report offers a range of estimates based on high, low, and best estimate assumptions for certain key variables and it compares its estimates with other valuations. The Panel was aided in its valuation efforts by three renowned finance experts, Professor Robert Merton, Professor Daniel Bergstresser and Professor Victoria Ivashina, all of the Harvard Business School. The professors independently reviewed both the mathematical model and the assumptions that were built into the model; they concluded that the Panel's approaches were reasonable and produced reliable estimates.

The Panel first applied its model to the warrant repurchases that Treasury has already approved.

Eleven banks have repurchased their warrants from the Treasury for a total amount that the Panel estimates to be only 66 percent of its best estimate of their value. If the warrants had been sold for their current market value, taxpayers would have recovered $10 million more.

Treasury is just beginning its warrant repurchase program. Banks have bought back only a fraction of one percent of all warrants issued, and the prices paid thus far may not be representative of what is to come. The report further analyzes how Treasury is constrained by the provisions of the contracts governing the TARP investments in the banks and recognizes that the Panel's valuations do not include the liquidity discounts and other adjustments contemplated by Treasury. In reaching a judgment with the bank supervisors to allow a particular bank to repay its TARP assistance and in determining the price, time and manner at which it will sell the warrants it holds in that bank, the Panel found that Treasury must balance the public interests in financial stabilization and economic growth. The Panel emphasized it is critical that Treasury make the process - the reason for its decisions, the way it arrives at its figure, and the exit strategy from or future use of TARP - absolutely transparent.

The full report can be found at www.cop.senate.gov. The Panel held a hearing on June 24 with Herbert M. Allison, Jr., Assistant Secretary of the Treasury for Financial Stability that further informed the analysis and findings of this report. Materials from the hearing can be found on the Panel's website.

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 to provide recommendations on regulatory reform. The Panel members are: Congressman Jeb Hensarling (R-TX), Richard H. Neiman, Superintendent of Banks for the State of New York, Damon Silvers, Associate General Counsel of the AFL-CIO, former U.S. Senator John E. Sununu (R-NH) and Elizabeth Warren, Leo Gottlieb Professor of Law at Harvard Law School.


COP to Hold Farm Credit Hearing in Greeley, CO

July 2, 2009

The Congressional Oversight Panel will hold a field hearing on Tuesday, July 7 in Greeley, Colorado to examine the state of farm credit markets. Live audio of the hearing will be available on the COP website.

In the Helping Families Save Their Homes Act of 2009, Congress required the Congressional Oversight Panel to issue a report that "analyzes the state of the commercial farm credit markets and the use of loan restructuring as an alternative to foreclosure by recipients of financial assistance under the Troubled Asset Relief Program." The report is scheduled for release on July 21, 2009, and the field hearing in Greeley will inform the Panel's recommendations on farm credit issues that will be put forth in the report.

At the hearing, the Panel members intend to hear testimony from local farmers and agriculture lenders, including the USDA's Farm Service Agency, Farm Credit Services and commercial banks, in order to gain a better understanding of farm credit markets.


Hearing with Assistant Treasury Secretary Herb Allison

June 23, 2009

The Congressional Oversight Panel will hold a hearing on Wednesday, June 24, at 2:30 p.m. in room 538 of the Dirksen Senate Office Building. Live video of the hearing will be available on the COP website.

The members of the Congressional Oversight Panel will hear testimony from the newly confirmed Assistant Secretary of the Treasury for Financial Stability, Herb Allison, regarding the Troubled Asset Relief Program.


Stress Testing and Shoring Up Bank Capital

June 9, 2009

The Congressional Oversight Panel June Oversight Report, “Stress Testing and Shoring Up Bank Capital,” examines the recent stress tests conducted on America’s 19 largest bank holding companies (BHCs).

In early February, Treasury and the Federal Reserve Board announced an effort to conduct comprehensive and simultaneous reviews of the nation’s largest BHCs—those with more than $100 billion in assets—to determine their ability to remain well capitalized if the recession leads to deeper than expected losses.  The effort, called the Supervisory Capital Assessment Program (SCAP), is referred to more informally as the stress tests.  BHCs found to be in need of an additional capital buffer were given six months to raise the necessary capital.  By ensuring that America’s largest banks could weather the financial storm, stress testing aimed to restore market confidence and help put the economy back on track.

The Panel’s report examines how effectively Treasury and the Federal Reserve conducted the stress tests, specifically reviewing the government’s economic assumptions, their methods of calculating bank capitalization, their release of information to the public, and whether the stress tests should be repeated in the future.  To help make these assessments of the stress tests, the panel engaged two internationally renowned experts in risk analysis, University of California at Berkeley Professors Eric Talley and Johan Walden, to review the stress test methodology.

Read the Report

More Reading

 


Reviving Lending to Small Businesses and
Families and the Impact of the TALF

May 7, 2009

The COP May Oversight Report is called Reviving Lending to Small Businesses and Families and the Impact of the TALF.  This report looks at the state of lending for small businesses and families and then examines the Term Asset-Backed Securities Loan Facility (TALF), which Treasury and the Federal Reserve established to improve access to credit for families and small businesses by supporting the issuance of asset-backed securities collateralized by credit card loans, student loans, auto loans and loans guaranteed by the Small Business Administration (SBA). 

Credit has tightened for families and small businesses.  Over 40 percent of banks report tightening lending standards for small businesses.  In February, 2009, consumer lending fell by an annual rate of 3.5 percent.  If successful, TALF could improve access to lending for families and small businesses.  The report raises two critical questions about the TALF:

  1. Is the TALF program well-designed to help market participants meet the credit needs of households and small businesses?
  2. Even if the program is well-designed, is it likely to have a significant impact on access to credit?

The report finds that there is reason for caution in predicting the ultimate impact of TALF, though the program may succeed in improving investor demand for asset-backed securities.

Read the Report

Read

Watch


COP Field Hearing on Small Business Lending in Milwaukee

April 28, 2009

COP is holding a hearing on Wednesday, April 29 at 10:00 am at the University of Wisconsin-Milwaukee Student Union. The hearing, “The Credit Crisis and Small Business Lending” examine credit markets for local small businesses, with a focus on the impact of the Troubled Asset Relief Program (TARP), on lending in Wisconsin.  The Congressional Oversight Panel will hear testimony from Wisconsin business owners and representatives of regional banks.

The Panel chose Milwaukee as the site of the hearing because the region is particularly vulnerable to tighter credit restrictions on small businesses, and thus is an ideal location to determine what, if any, impact TARP has had to this point on the availability of credit.  As a Midwestern manufacturing center, Milwaukee’s economy has struggled during the recent economic downturn.  112,000 jobs have been lost in Wisconsin during the last year, more than any year-to-year comparison since 1939.  Unemployment reached 9.4 percent in Wisconsin in March, surpassing the national rate, and bankruptcies are up 35 percent.      

Testimony
Witness Testimony

Thomas Klink
President
Jefferson Electric

Testimony

Robert B. Atwell
CEO
Nicolet National Bank

Testimony

Wayne M. Perrins
General Manager
Badger Trailer and Equipment Corporation

Testimony

Peter Prickett
President and CEO
First National Bank—Fox Valley

Testimony

David Griffith
Owner and CEO
Crosstowne Machining

Testimony
Opening Statements
Panel Member Statement
Elizabeth Warren,
Chair, Congressional Oversight Panel
Statement
Richard Neiman Statement

COP Hearing with Treasury Secretary Timothy Geithner

April 20, 2009

Treasury Secretary Timothy Geithner will be appearing before the Congressional Oversight Panel in a hearing taking place at 10am, Tuesday, April 21, 2009.

Watch the hearing

Witness

Honorable Timothy Geithner | Testimony
Secretary
U.S. Department of Treasury

Opening Statements


Media Advisory: Congressional Oversight Panel Announces Hearing with Treasury Secretary Timothy Geithner

April 17, 2009

WHAT: Congressional Oversight Panel Hearing with Secretary Geithner

WHO: Members of the TARP Congressional Oversight Panel

WHEN: Tuesday, April 21, 2009, 10:00 am *Doors will open at 9:30 am

WHERE: Dirksen Senate Office Building Room 628, Washington, D.C.

This hearing is open to press and public and will be webcast on our website at www.cop.senate.gov.

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 to provide recommendations on regulatory reform. The Panel members are: Congressman Jeb Hensarling (R-TX), Richard H. Neiman, Superintendent of Banks for the State of New York, Damon Silvers, Associate General Counsel of the AFL-CIO, former U.S. Senator John E. Sununu (R-NH) and Elizabeth Warren, Leo Gottlieb Professor of Law at Harvard Law School.


COP Report: Assessing TARP Strategy After Six Months

April 7, 2009

The April oversight report for COP is entitled Assessing Treasury’s Strategy: Six Months of TARP.  In this report, COP offers a preliminary look at Treasury’s strategy and offers a comparative analysis of previous efforts to combat banking crises in the past.

Over the last six months, Treasury has spent or committed $590.4 billion of the TARP funds.  Treasury has also relied heavily on the use of the Federal Reserve’s balance sheet which has expanded by more than $1.5 trillion (not including expected TALF loans) in conjunction with the financial stabilization activities it has undertaken beyond its monetary policy operations.   This has allowed Treasury to leverage TARP funds well beyond the funds appropriated by Congress. 

The total value of all direct spending, loans and guarantees provided to date in conjunction with the financial stability efforts (including those of the FDIC as well as the Treasury and the Federal Reserve) now exceeds $4 trillion.  This report reviews in considerable detail specific criteria for evaluating the impact of these programs on financial markets. 

Watch Chairwoman Elizabeth Warren introduce COP’s latest report.

With this report, COP hopes to assist Congress and Treasury officials in weighing the available options as the nation grapples with the worst financial crisis it has faced since the Great Depression.

Read the Report

Read:


COP Daily News Roundup

April 3, 2009


COP Daily News Roundup

April 2, 2009


COP Daily News Roundup

April 1, 2009


COP Daily News Roundup

March 31, 2009


COP Daily News Roundup

March 30, 2009


COP Daily News Roundup

March 26, 2009


COP Daily News Roundup

March 20, 2009


COP Daily News Roundup

March 19, 2009


COP Daily News Roundup

March 18, 2009


COP Daily News Roundup

March 16, 2009


Congressional Oversight Panel to Hold Hearing Thursday, March 19th: “Learning from the Past—Lessons from the Banking Crises of the 20th Century”

Hearing to Examine Government Responses to Major Banking Crises of the 20th Century

WASHINGTON, D.C.—The Congressional Oversight Panel announced today that it will hold a public hearing on the lessons that can be learned from government responses to major banking crises of the 20th century. The hearing will be held on Thursday March 19th, 2009 in Washington, D.C., and will provide an opportunity for the Panel members hear from experts on prominent banking crises of the last 100 years. The Panel hopes to achieve a better understanding of the effectiveness of prior government efforts to stabilize banks and restart economic growth in order to better assess responses to the current economic situation.

The Panel will hear testimony from experts on the banking crises in Japan and Sweden during the early 1990s, the Savings and Loan collapse in the 1980s, and the Great Depression of the 1930s.

The following witnesses are expected to testify at Thursday’s hearing:

  • Bo Lundgren
    • Director General, Swedish National Debt Office
    • Former Swedish Minister of Financial and Fiscal Affairs
  • Richard Katz
    • Editor-in-Chief, The Oriental Economist
    • Author, Japan: The System That Soured—The Rise and Fall of the Japanese Economic Miracle and Japanese Phoenix
  • David C. Cooke
    • Former Executive Director, Resolution Trust Corporation
  • Dr. Eugene White
    • Professor of Economics, Rutgers University
    • Research Associate, National Bureau of Economic Research

The Congressional Oversight Panel was created to oversee the expenditure of Troubled Asset Relief Program (TARP) funds authorized by Congress in the Emergency Economic Stabilization Act of 2008 (EESA) and to provide recommendations on regulatory reform. The Panel members are: Congressman Jeb Hensarling (R-TX), Richard H. Neiman, Superintendent of Banks for the State of New York, Damon Silvers, Associate General Counsel of the AFL-CIO, former US Senator John E. Sununu (R-NH), and Elizabeth Warren, Leo Gottlieb Professor of Law at Harvard Law School.

Additional details will be released as soon as they are available.

Event Details

WHO:
Members of the TARP Congressional Oversight Panel

WHAT:
Congressional Oversight Panel Hearing:
Learning from the Past—Lessons from the Banking Crises of the 20th Century

WHEN:
Thursday March 19th, 2009
10:00 am

WHERE:
US Capitol Visitor Center
Room SVC 208/209
Washington, D.C.


COP Daily News Roundup

March 14, 2009


Jennifer’s Story: “My home is so underwater I don’t know if it’s worth it”

March 13, 2009

Jennifer P. from Los Angeles, California recently passed on her story to the Panel:

To make a long story short, I've had an extreme hardship the past year and a half.  It started with a loss of my job, then my Grandfather who lived in Northern California had heart, spine and stomach surgery (and serious problems with his caregiver) and I needed to travel up North and help.  Just before this - almost 2 years ago - I had a major amount of money in equity in my house.  Because I wasn't working I decided to do a HELOC loan on my house as a very temporary solution.  Shortly after I did the HELOC loan I decided to take a safer route instead of drawing from the HELOC… I decided to sell my house to get the cash out…  I put my house back on the market to try to sell.  It was not selling so I kept reducing the price.  I used my HELOC money to pay my mortgage.  I used my IRA money to pay my mortgage.  I now know this was not a good idea, but it was not apparent that the housing market would crash this hard when I was in the middle of this, and I didn't have good advice.  I tried for months and months to sell my house, but it was becoming underwater.  I had to do the work myself without a realtor because I could not afford the commission, and the realtors did not want to spend money marketing the house.

I had tried to get my lender to work with me for months to refinance down to a reasonable interest rate (my HELOC was 9.75%), but they would not. I finally had no more HELOC or IRA and had to stop paying my mortgage.  It ruined my credit.  I immediately tried to contact my lender again.  After several months and several times trying they agreed to modify my loans.  I have been in the middle of a modification for months and months now…  I have had to spend so much time dealing with this that it has become almost a full time job. When you're in this situation you just keep thinking…ok, if I can just get through this next little while the market will pick back up again…no one had any idea the extent of the problem…so you just keep holding on…but it doesn't get better, it just keeps getting worse.

I would like to keep my house.  I have lost everything in an attempt to keep it.  My home is so underwater I don't know if it's worth it…  I am currently trying to get back up on my feet, and I could pay a reasonable mortgage if they will work with me and adjust the mortgage to something that makes sense for both of us.


Dreams of Retirement Slipping Away

March 13, 2009

Molly S. from Emerald Isle, North Carolina is a home owner grappling with the grief of losing her husband and fighting for her home.  She shared her story with us:

My husband died about 5 months ago.  My income was cut about $1700 per month. I have not missed a payment or ever been late with one, yet [my bank] will not renegotiate my mortgage or help me determine a way to make the present one workable for me.  I am 66 years old and have been handicapped since age 22, following a stroke.  I manage quite well considering my disabilities, but my husband's death and this financial crisis collided to cause me to have to sell my home.  I do not want to move and do not know if the housing market will even rally enough for me to find a buyer.  I would prefer to refinance and continue paying my bills and living in the retirement home that my husband and I enjoyed.

Tell us your story, have you tried to modify or refinance your mortgage?


A Family Struggling to Refinance

March 13, 2009

Marilyn B. from Charleston, South Carolina and her husband, retired from the air force, have owned their home for nine years.  They never had a problem paying their bills until this year, with cutbacks in her husband’s work week

When Marilyn and her husband tried to refinance their loan, they were told that their debt to income was too high considering her college loans.  Even though they paid their bills on time, they are unable to refinance their loan at a more affordable, lower interest rate.

Marilyn asks:  “What are the banks waiting for to give people in our situation a loan?  What if the banks were told that their debt to income was too high and we could not bail them out?”

“We are the people who need help right now,” she says.


A Business in Need of Loans

March 13, 2009

Richard  M. from Salt Lake City, Utah owns a motorcoach company with buses financed by a bank that has received TARP funds.

Richard is frustrated by his restricted access to credit in this difficult economic climate and writes in frustration that, “Although it is my understanding that these funds were meant to loosen credit markets, it seems that [the bank] is doing nothing more than increasing efforts to close down small business.”

Richard has been a “customer for close to 20 years with an exemplary financial record,” and he is frustrated that the bank isn’t willing to be more flexible with his loans and is instead threatening repossession.

He worries that his “own tax dollars… will do nothing more than close my business.”


 

COP Daily News Roundup

March 13, 2009


COP Daily News Roundup

March 11, 2009


COP Daily News Roundup

March 10, 2009


COP Daily News Roundup

March 9, 2009


COP Daily News Roundup

March 7, 2009


COP Report: Working Toward a Solution on Foreclosures

March 6, 2009

The March oversight report for COP is entitled: The Foreclosure Crisis: Working Towards a Solution.  In this report, COP examines the roots of the foreclosure crisis and offers a checklist for evaluating proposals to deal with this problem. 

From the beginning, the Treasury Department has used its funding through the Troubled Asset Relief Program (TARP), to stabilize the financial institutions that lie at the top of the economic pyramid.   COP members believe that the country will not be able to pull out of this recession and end the financial crisis without a plan to address the foreclosure crisis at the root of the downturn.

Read the Report

Read the Alternative Views:


COP Daily News Roundup

March 5, 2009


COP Daily News Roundup

March 3, 2009


COP Daily News Roundup

March 2, 2009


COP Daily News Roundup

February 28, 2009


COP Daily News Roundup

February 26, 2009


Congressional Oversight Panel to Hold Field Hearing in Maryland on Foreclosure Crisis

February 25, 2009

WASHINGTON, D.C.—The Congressional Oversight Panel today announced its second field hearing—“Coping with the Foreclosure Crisis: State and Local Efforts to Combat Foreclosures in Prince George’s County, Maryland.” The hearing will take place this Friday, February 27, 2009. Prince George’s County has the highest rate of foreclosures in Maryland. Overall Maryland has taken aggressive steps to address the foreclosure crisis. The state’s approach coordinates state and local government action with community organizations and is one of the reasons that Maryland as a whole is doing better than the national average on home foreclosures.

The Panel is required by law to review the “current state of the market and the regulatory system” and provide reports to Congress and the American public on the effectiveness of the Treasury Department’s management of the Troubled Asset Relief Program (TARP), the “effectiveness of foreclosure mitigation efforts and the effectiveness of the program from the standpoint of minimizing long-term costs to the taxpayers and maximizing the benefits for the taxpayers.” At the Maryland hearing, the Panel will explore state and local efforts at foreclosure prevention and home price stabilization in Prince George’s County with an emphasis on identifying the economic and institutional barriers to loan modifications and refinancing.

The Panel will hear testimony from members of the public who have faced the threat of foreclosure, community-based providers of foreclosure mitigation and other housing servicers, and a state official. Congresswoman Edwards, Congressman Van Hollen, and a representative from Prince George’s County will also address the Panel.

In addition to the hearings, the Panel is encouraging all Americans to pose their own questions, make their own suggestions, and share their personal stories through the website at www.cop.senate.gov.

Event Details

Who

Members of the TARP Congressional Oversight Panel

What

Congressional Oversight Panel Hearing on Coping with the Foreclosure Crisis: State and Local Efforts to Combat Foreclosures in Prince George’s County, Maryland

When

Friday, February 27, 2009, 9:30 am

Where

Prince George’s Community College
Largo Student Center, Community Room B
301 Largo Road, Largo, MD

 


COP Daily News Roundup

February 25, 2009


COP Daily News Roundup

February 24, 2009


COP Daily News Roundup

February 23, 2009


COP Daily News Roundup

February 21, 2009


COP Daily News Roundup

February 19, 2009


COP Daily News Roundup

February 18, 2009


COP Daily News Roundup

February 17, 2009


COP Daily News Roundup

February 13, 2009


COP Daily News Roundup

February 12, 2009


COP Daily News Roundup

February 11, 2009


COP Daily News Roundup

February 10, 2009