Conyers, Kucinich Express Alarm Regarding the Use of Funds from the $700 Billion Rescue Package

House Judiciary Committee Chairman John Conyers, Jr. (D-MI) and Government Oversight Subcommittee Chairman Dennis Kucinich (D-OH) today expressed alarm that the $700 billon from the Troubled Asset Relief Program has apparently not yet been used to make loans to businesses and consumers.  Recent media reports suggest the banking industry will not use these funds to facilitate lending, but will instead use them to facilitate mergers. 

"It is very troubling to learn that the $700 billion rescue package sold to the American consumer as necessary ensure to continue loans to small businesses and consumers, is apparently being used instead to squeeze smaller banks out of the market,"e; said Conyers.  "I’m concerned about the federal government using these funds to take sides in mergers and to promote consolidation within the financial markets instead of reviving our economy."l

"It seems evident that bailout funds are being used in unintended and objectionable ways," said Kucinich, a leader in opposition to the bailout.  "Nowhere is this more clear than in my district in Ohio, where National City was recently purchased by PNC; a bank that did not receive bailout money was purchased by a bank that did.  Federal money should not be used to subsidize consolidation of the banking industry."

The Judiciary Committee also sent a letter to financial regulators, a copy of which is linked here.