So just how tough is it for a bank to apply for a bailout? Not very:
WASHINGTON – Ever need a college loan? You’ve probably pored through the notorious eight-page FAFSA application. A likely home buyer? Try the five-page Uniform Residential Loan Application.
But what if you’re a bank looking for a few billion from the federal government’s new Capital Purchase Program?
Two pages.
That’s all the nation’s financial institutions had to fill out to request money from the government’s $700 billion Trouble Asset Relief Program. In fact, the first page only requires bank contact information.
For some lawmakers and watchdog groups, the simple request form has become a symbol of a government financial bailout plan in need of more accountability and oversight.
"When student lenders and mortgage companies ask more questions in lending thousands of dollars than the federal government does when it injects billions of dollars worth of capital, we should all be concerned," said Rep. Spencer Bachus of Alabama, the top Republican on the House Financial Services Committee.
Now granted, this isn’t all it takes to actually get the bailout, the process is a bit more complicated. That however, is not as important to Americans as knowing how our taxes [and the taxes of our children and grandchildren] are being spent. When all is said and done, how much oversight can we expect of how banks utilize bailout funds? Do they have to tell regulators how they will spend their windfall?
"Not specifically," Kashkari replied. "It’s very hard for us to try to micromanage and say this is how you should run your business, because each bank and each community is a little bit different. So we wanted to work with the regulators to identify the healthy banks, put capital in on the same terms, and then create the economic incentives for them to want to go make new loans."
Micromanage? Right. The government intends to appoint a "car czar" to tell the Big 3 how to run their business, but they don’t have a comparable "No-foolish-spender-dead-ender-lender-on-a-bender" oversight position to keep an eye on the banks.
My solution: Let’s give the banks debit cards for them to access their bailout funds and make the statements available for taxpayers online. The application would be longer, but at least then we’d know where the money was going!
