Rep Frank says Obama agrees on strict TARP rules

WASHINGTON (Reuters) - Rep. Barney Frank said on Monday it "seems clear" he and President-elect Barack Obama agree on the need to set strict rules for spending the next $350 billion of the government's financial industry bailout.

The Massachusetts Democrat has proposed legislation to impose new rules on the Troubled Asset Relief Program (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 said he hopes the House will pass his bill this week. Frank is chairman of the House Financial Services Committee, which will hold a hearing on Tuesday on the use of TARP funds.

(Reporting by Kevin Drawbaugh; Editing by Kenneth Barry)