Push for Rescue Funds to Reach Car Dealers
WASHINGTON (Blue MauMau) - U.S. House of Representatives Financial Services Committee Chairman Barney Frank, D-Mass., wants those lenders who received the federal bailout to provide loans for dealer floorplans. On Friday Frank revealed a draft bill to overhaul October's $700 billion TARP fund. The Treasury Department has used some $350 billion of the allocated capital so far, including $17.4 billion for the bailout of the Big Three Detroit-based auto makers.
Frank's bill would reintroduce a car czar to oversee the auto makers. That stipulation by the House approved bill was rejected by Congress back in December.
The draft pushes for "authority to provide support to the financing arms of automakers for financing activities to ensure that they can continue to provide needed credit, including through dealer and other financing of consumer and business auto and other vehicle loans and dealer floor loans." It also seeks clarification of the "Treasury’s authority to establish facilities to support the availability of consumer loans, such as student loans, and auto and other vehicle loans."
David Regan, vice president for legislative affairs at the National Automobile Dealers Association, told Automotive News ($$), "We are encouraged by the specific references to floorplan. Many are unfamiliar with the critical nature of floorplan financing to the automobile business."
In light of reports that President-elect Obama will ask President Bush to request the second $350 billion of TARP funds, Representative Frank declared on Monday, “I agree that the money should be made available under the appropriate conditions. We should not allow our disappointment at the Bush administration’s poor handling of the TARP program to prevent the Obama administration from using the funds in more appropriate ways. I hope the House will pass a bill this week that sets forth the conditions we believe are necessary to assure that the public gets the full benefit of these funds. 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.”
Related reading:
H.R. 384 "TARP Reform and Accountability Act of 2009"
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