CLIENT ALERT: HFSC Interim TARP Hearing on Oversight Report

Today, the House Financial Services Committee HFSC) is holding its oversight hearing about TARP -- entitled "Department Conduct of the Troubled Assets Relief Program." The Oversight Panel's first report is also due to be released today, coinciding with today's hearing. Below is an analysis from Patton Boggs on various media reports and other information related to today's hearing and the Oversight report:

* Report Highly Critical in Tone: According to media reports, the report strikes a highly critical tone of the Treasury's oversight and implementation of the $700 billion EESA bailout package, of which the first $350 billion traunche has already been distributed to Treasury, with $15 billion remaining.

* Failure to Help Distressed Homeowners - The report contains criticism of a recent Treasury proposal to help new homeowners, arguing the plan does not lend assistance to distressed existing homeowners. By way of background, the Treasury has considered having Fannie and Freddie guarantee and purchase 30-year fixed mortgages with rates as low as 4.5 percent. However, the report noted that such a program was designed to encourage new buyers -- and not existing homeowners seeking relief.

* No Specific Conclusions, but Rather Criticisms that Mirror GAO Report - Apparently there are no specific conclusions offered, but rather questions raised about Paulson's implementation of the program that mirror some of the GAO report's audit of the program issued last week.

Patton Boggs will continue to monitor today's hearing and will present any new information as necessary.

HEARING NOTICE:

Wednesday, December 10, 2008, 10:00am, 2128 Rayburn House Office Building

House Financial Services Committee Chairman Barney Frank (D-MA), today announced that the committee will hold a hearing to examine oversight concerns regarding the Treasury Department’s conduct of the Troubled Asset Relief Program (TARP). This hearing comes following a report by the Government Accountability Office on the Treasury Department’s implementation of TARP.

Chairman Frank has been highly critical of the way the Treasury has handled the Capital Purchase Program, a part of TARP.

Witness List & Prepared Testimony:

Panel 1

• The Honorable Gene Dodaro, Acting Comptroller General of the United States, U.S. Government Accountability Office
• The Honorable Neel Kashkari, Interim Assistant Secretary for Financial Stability and Assistant Secretary for International Affairs, U.S. Department of the Treasury

Panel 2

• The Honorable Jeb Hensarling (TX-05), Congressional Oversight Panel under the Emergency Economic Stabilization Act
• Professor Elizabeth Warren, Leo Gottlieb Professor of Law, Harvard University, and Chair, Congressional Oversight Panel under the Emergency Economic Stabilization Act.

For today's testimony from hearing witnesses, please visit: http://www.house.gov/apps/list/hearing/financialsvcs_dem/hr121008.shtml  
Once on the HSFC site, the testimony can be found by clicking on each person's name. The HFSC web site will be updated as testimony is made available. A PDF of the full Oversight report released today can be found by accessing the web site above as well.