Cummings Wants Hearing On Fed Loans

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http://livewire.talkingpointsmemo.com/updates/2163

On the heels of Bloomberg’s big piece on the secret loans the Federal Reserve gave to banks, House Oversight Committee Ranking Member Elijah E. Cummings wants a hearing examining the issue, he wrote in a letter to Rep. Darrell Issa on Monday.

“Many Americans are struggling to understand why banks deserve such preferential treatment while millions of homeowners are being denied assistance and are at increasing risk of foreclosure,“ Cummings said in a release.
(pdf at link)


(snip)
I am writing to request that the Committee hold a hearing with Federal Reserve Chairman
Ben Bernanke and officials from the nation's largest financial institutions that benefitted from trillions of dollars in previously undisclosed government loans provided at below-market rates.

In the past, the Oversight Committee has played a prominent role in investigating the
actions of government entities and private sector corporations that led to the financial collapse. On October 23, 2008, for example, former Federal Reserve Chairman Alan Greenspan testified before our Committee, stating: "I made a mistake in presuming that the self-interest of organizations, specifically banks and others, was such that they were best capable of protecting their own shareholders."

Yet, a report yesterday in Bloomberg Markets Magazine disclosed that the Federal Reserve secretly committed more than $7 trillion as of March 2009 to rescuing the nation's top financial institutions. As a result, the banks that received these loans "reaped an estimated $13 billion of income by taking advantage of the Fed's below-market rates." This report was based on 29,000 pages of Federal Reserve documents obtained under the Freedom of Information Act after a protracted legal dispute.