Bailout banks' lending concerns U.S. watchdog panel
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TARP recipient financial institution leaders testify before House Financial Services Committee on Capitol Hill, February 11, 2009. From left are, Goldman Sachs' Lloyd Blankfein, JPMorgan Chase's Jamie Dimon, Bank of New York's Robert Kelly, Bank of America's Ken Lewis, and State Street's Ronald Logue.
Credit: Reuters/Larry Downing
WASHINGTON (Reuters) - Increases in rates and fees charged by U.S. banks that are receiving government bailout money is a concern to the bailout's watchdog panel, but no investigation is under way, a panel spokesman said on Monday.
The Wall Street Journal reported that the Congressional Oversight Panel of the Troubled Asset Relief Program was investigating lending by TARP beneficiaries. It singled out Bank of America (BAC.N) and Citigroup (C.N) .
But Caleb Weaver, a senior adviser to the five-member panel, said it has no subpoena power and does not conduct formal investigations like those done by, for instance, the Treasury Department's special inspector general for the TARP, which is a separate entity.
"It's an issue that the Congressional Oversight Panel is considering for a future report," said Weaver.
The panel, chaired by Harvard Law School professor Elizabeth Warren, issues regular reports on bailout policy. It issued one last week suggesting that the true value of toxic assets weighing down the books of major financial institutions would decide whether the TARP succeeds.
The $700 billion, taxpayer-financed TARP was meant to send more capital to lenders to spur lending and boost the economy.
Since TARP started in October, banks helped by it have raised charges on a range of routine transactions, hiked rates on credit cards and continued making loans criticized as predatory by consumer advocates, the Journal said.
(Reporting by Kevin Drawbaugh; Editing by Dan Grebler)
