UPDATE 1-US Rep Frank says Obama agrees on strict TARP rules

(Adds comments from television interview)

WASHINGTON, Jan 12 (Reuters) - U.S. Rep. Barney Frank said on Monday it "seems clear" he and President-elect Barack Obama agree on the need for new rules to govern the next $350 billion of the government's financial industry bailout, but he said he still wants to write them into law.

The Massachusetts Democrat has proposed legislation to impose new rules on the Troubled Asset Relief Program, or TARP. President-elect Barack Obama has asked President George W. Bush to seek release by Congress of the TARP's next $350 billion.

The Treasury Department, which is managing the $700 billion TARP, has already committed the first half of it, primarily to injections of capital into troubled banks. Many members of Congress are unhappy with Treasury's management of the TARP.

Frank said in a statement that the second installment of funding for the emergency program "should be made available under the appropriate conditions ...

"It seems clear the Obama administration agrees with what we are setting forward, and I believe this creates a framework so that the release of these funds can go forward."

He told Bloomberg television, however, that he still believes it wise to write the new requirements into law.

"If he promises that he's going to abide by them then I think that will work, although we still want to get a bill," Frank, chairman of the House Financial Services Committee, said. "Our motto is going to be 'Trust but verify.'"

Frank said the House would take up his bill on Wednesday or Thursday, with Thursday likely.

"Even if that weren't to go through, any failure on the part of the new president to carry out these conditions and firmly promise them would doom the program," he told Bloomberg.

In the interview, Frank said he was certain an effort would be made to block the final TARP funds, given that any member of the House or Senate can bring a resolution to the floor in order to do so.

"It is theoretically possible that the resolution could pass both houses and then be vetoed. I don't think it would be healthy. I'd rather have the resolutions defeated," he said. (Reporting by Kevin Drawbaugh and Tim Ahmann; Editing by Dan Grebler)