House Financial Services Chairman Barney Frank Thursday urged President-elect Barack Obama to lend a stronger voice in urging Treasury officials to help distressed homeowners avoid disclosure.
Voicing his well-known frustration with Treasury Secretary Henry Paulson and other officials for resisting calls to use funds from the $700 billion bailout package to combat foreclosures, Frank said lawmakers are being told that the back-and-forth consultations with the Obama transition team has delayed consideration of such actions.
“I’m a great fan of the president-elect, but I think it’s probably the case that he’s going to have to be more assertive than he’s been,” Frank said, addressing the Consumer Federation of America’s annual financial services conference. “And I know what he says is ‘Well, we only have one president at a time. My problem is, at a time of great crisis and [massive] mortgage foreclosures. ... I am afraid that overstates the number of presidents.”
Frank also defended Federal Deposit Insurance Corp. Chairman Shelia Bair, who incoming Treasury Secretary Timothy Geithner wants to push out of her post, Bloomberg reported Thursday.
Bair has reportedly butted heads with Geithner and other bailout officials during the course of the crisis. According to the Bloomberg report, Geithner doesn’t think she’s “a team player,” fighting for her agency rather than the good of the entire financial system.
Congressional Democrats — Frank first among them — on the other hand have heaped praise on Bair, a Republican, for her advocacy of foreclosure prevention, which she distilled into a proposal to use taxpayer money to refinance more than a million troubled mortgages. She has suggested that some of the $700 billion be used to fund her plan.
Needless to say, any decisions regarding Bair’s career that are seen as punitive could hurt Geithner — and Obama — on the Hill at a time when congressional cooperation is desperately needed to quickly move Obama’s economic proposals once he takes office.
Frank credited the current resistance to doing more about foreclosures to ruffled male feathers. “I think part of the problem now is that, to be honest, Shelia Bair has annoyed the Old Boys Club.” He likened the situation to several regulators “up in the treehouse with a ‘No Girls Allowed’ sign.”
Bair should retain her FDIC post in the Obama administration and even be given a “broader role in helping to formulate policy on mortgage foreclosures,” Frank told reporters after his speech.
Expect Frank to ruffle some Treasury feathers himself next week. He’s convening a hearing to grill Neel Kashkari, the interim chief of the economic rescue effort — formally known as the Troubled Asset Relief Program — about how the program has been implemented. Frank was less than pleased by the results of a GAO report that found Treasury “has no way to measure whether taxpayer funds invested in banks are being used in accordance with the purpose of the law — to increase lending” and furious with Treasury’s response that it had no intention of implementing such a metric.