Frank opens hearing on bailout package

[0:00] ..." Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke are defending their management of a 700 billion dollar bailout bill on Capitol Hill. There appearing before a house panel chaired by Massachusetts congressman Barney for. It's called true."...

[0:32] ..." asked. Mr. Hamburg by the secular treasury supporter -- it -- the Federal Reserve to -- a very extraordinary piece of legislation. Putting potentially rich with a we hope -- and not 700 billion dollars of"...

[4:04] ..." have now begun to get active. We also got an announcement by Fannie Mae and Freddie Mac of movement although we have some. Concerns about how far they go and why they -- V program that the FDIC is put it but the fundamental policy issue. Is. Our disappointment. That funds are not being used as the 700 billion. To"...

[5:53] ..." the tarp funds. For the -- mortgage foreclosures and the -- the FDIC whom we have invited had been very. Much in the lead on this no one here was endorsing any specific plan but didn't need to -- tarp funds as the bill contemplate. To reduce foreclosures. Is Paramount for more on the testimony on Capitol Hill listen to WBZ. Newsradio 1030 and wbz1030.com."...

[0:00]" Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke are defending their management of a 700 billion dollar bailout bill on Capitol Hill. There appearing before a house panel chaired by Massachusetts congressman Barney for. It's called true."

[0:19]" oversight. On one of the most important pieces of legislation. This current congress has adopted and one of the most important in many ways I think it and he congresses ever adopted. We were asked. Mr. Hamburg by the secular treasury supporter -- it -- the Federal Reserve to -- a very extraordinary piece of legislation. Putting potentially rich with a we hope -- and not 700 billion dollars of public money. For purposes that go beyond what government has ordinarily done -- almost everybody including believed to get on the table big government could -- But it was a necessary response to a crisis. -- questions ever written. About. Decision that have been made with regard to the expenditure -- fund. Which only want to hear from the secretary and the chairman there assessment of what's happened so far -- today the other that we do have a problem. -- all of us to. That has to be focused on those areas of disagreement. It show accomplishments areas of agreement. Things which worked well and not to get a lot of discussion it is important. That we can understand what's happened to valuing what we did. That there be a full discussion today both of the successes of this program and I believe there have been significant successes. Then and also of the concerns many of us have they were true but I hope we can address. And we've talked about these in a variety of ways publicly privately with the with the two officials. One. There is concern that the bank which with the recipient of capital infusions. Under the capital purchase program. Have not use the funding. Entirely for reminding which many people we have understood would be the purpose. There is both unhappiness at what would appear to be in the part of some financial institutions. Excesses -- to the money -- low. -- protected -- there and that was initially not out of the 700 billion dollar program. But even more substantively there is concerned that. We -- this anecdotally. From people we represent that credit is still tighter than ought to be and that the bank which receive the money have not yet again but undermined it out. The second major concern is over before -- prevention and here. I believe there's a very fundamental. Disagreement part of a lot of members it was a decision recently made but we understand that decisions are. Is subject to. Re examination et cetera when the program which passed. Very explicit language was included. To provide for mortgage foreclosure. Mortgage foreclosure. Diminution. As one of the purposes is very specific language in -- the question was well investment versus spending but the bill itself specifically says that we should. As we buy up mortgage assets. Reduce the amount that has to be paid. To reasonable level to avoid foreclosure the going to argue that it was not contemplated it it was a very important part of Friday the effort to get votes for the bill. That we would do mortgage foreclosure reduction. The secretary's announcement was that none of these funds. Would go towards mortgage foreclosure reduction although there are other programs on which we are working to do that I welcome -- evidenced by yet several largest bank. All of whom were recipients of the capital fund that no direct connection but it is true civil largest banks have now begun to get active. We also got an announcement by Fannie Mae and Freddie Mac of movement although we have some. Concerns about how far they go and why they -- V program that the FDIC is put it but the fundamental policy issue. Is. Our disappointment. That funds are not being used as the 700 billion. To supplement mortgage foreclosure reduction. It is unfortunate not the case at all of other records have been -- I -- it was a strong proponent of hopeful homeowner's bill I now believe -- We will be doing that we do would definitely some ways. Do we learn from experience. There. I believe is an overwhelming lead in powerful set of reasons what some of the park money must be used for mortgage -- your first the Walt. Mortgage foreclosures continue at an excessive faith. From the standpoint of the economy. The negative effect of this cascade of foreclosures goes far beyond the individual foods at all and that's to do with neighborhood deterioration -- to do with municipal and ability to make. The government to work and at eight. Impact obviously the macro economy. Secondly there's a matter of public confidence. A number of things need to be done to get a said the recession in my judgment fiscal stimulus. Increased lending which I talked to -- but for Coca reduction and it may well be that further action has to be taken. I have to say at this point. That public confidence. In what we have done so far. Is lower than anybody would want it to be to the point where it could be an obstacle to further steps. So -- going to want to keep victory that -- for everybody I would just reiterate it is essential. That we do rule something to use some of the tarp funds. For the -- mortgage foreclosures and the -- the FDIC whom we have invited had been very. Much in the lead on this no one here was endorsing any specific plan but didn't need to -- tarp funds as the bill contemplate. To reduce foreclosures. Is Paramount for more on the testimony on Capitol Hill listen to WBZ. Newsradio 1030 and wbz1030.com."