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The administration’s efforts to bring transparency and accountability to the $700 billion bailout squeaks by earning mostly “Cs” on the Arizona Public Interest Research Group’s (Arizona PIRG) latest Bailout Report Card. While the grades are not impressive, they do represent an improvement from the first Bailout Report Card for the previous administration, which earned almost entirely “Fs.”
Released in February of 2009, the first Report Card noted how little was known about the Troubled Asset Relief Program (TARP), the participants, the strategies and where the money went. To that end, Arizona PIRG created a Report Card on transparency in the hope that the next administration would answer these very basic questions and begin to hold the banks accountable for how the money was spent.
“The Department of Treasury has responded to varying degrees to calls for program information, greater up front planning, reporting on lending practices and details on participants – all of which were completely ignored by the previous administration,” explained Diane E. Brown, Executive Director of Arizona PIRG.
“However, it is not always clear how these plans and taxpayer protections will work and to whom they will apply. Also, many of the reforms only apply to future participants, while the banks that received the biggest cash injections are not subject to them. To a large extent, regulators have shut the barn door after the horses are gone – leaving the public both in debt and in the dark,” Brown added.
The Report Card shows improvement as a result of the administration’s establishment of online resources, documentation, reporting requirements and taxpayer protection principles for at least some of the programs. But marks improved only marginally for accountability of how the money has been spent, consistent application of governance reforms, as well as clarity around the program’s strategy for meeting goals.
“Aside from keeping financial institutions solvent, the program does not appear to be accomplishing its goals as they relate to American families. There has not been an increase in lending or a decrease in foreclosures. At some point the Administration needs to decide when to stop throwing money at banks. And better reporting and more accountability will help them make those decisions responsibly,” Brown noted.
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