December 11, 2008

Dear Friends,

Since I last reported to you, the House Committee on Financial Services held additional hearings regarding the economic crisis facing our country. We continued to focus on the difficulties facing the nation's automakers as well as on the status of the Troubled Asset Relief Program (TARP). On Friday December 5th, the nation's automakers appeared before our committee to explain why their industry needs federal assistance and to provide details regarding how they will restructure their business in an effort to return to competitiveness.

On Wednesday December 10th, the focus of our hearing was a review of TARP and how funds were being allocated. We remain concerned about our troubled housing market and many of us are pushing for additional action on this front.

The House this week approved legislation to help the auto industry weather these tough economic times. For me, my only concern regarding the failure of the auto industry is the potential loss of so many jobs. After last week's dismal jobs report, this issue became even more relevant. The measure that ultimately passed the House provided $14 billion in short term loans to struggling auto companies. It also establishes a "Car Czar" to oversee the companies' efforts to restructure their businesses and monitor their use of these federal funds. Companies are required to submit restructuring plans within specified timeframes or they must immediately repay these loans. I voted YES even though I have serious concerns about this action because I cannot simply stand back and watch hundreds of thousands more Americans lose their jobs during these difficult times. While the legislation passed the House, there was not sufficient support in the Senate to consider the bill at this time. The White House recently said it will consider other various ways to assist the automakers. The entire House vote is recorded below:

Over the past several months, I have been working on a number of legislative initiatives in response to the current economic crisis. Since the $700 billion rescue package passed in October it has become increasingly clear to me that additional oversight is needed. Under current law, the Treasury Secretary has access to the remaining $350 billion of the rescue package unless Congress votes to disapprove it. I was the first Democrat to support a proposal to require that Congress affirmatively approve Treasury's access to these remaining funds. I am also working on legislation that makes further needed changes to the rescue package for financial institutions. These changes would expand the Financial Stability Oversight Board to include non-federal officials, provide taxpayers with a minimum amount of warrants in return for funds, and strengthen requirements preventing executives from getting excessive bonuses or golden parachutes.

I have reported in the past about my work to bring more accountability to unregulated industries such as hedge funds. Next year, I will re-introduce my bill requiring hedge funds to adhere to basic reporting requirements, and to expand this legislation so it also applies to private equity funds and all entities investing on behalf of others. In my opinion, a lack of transparency and oversight with regard to investment vehicles like hedge funds contributed to the financial meltdown.

I am also working on legislation that would automatically take back TARP funds if the entity receiving those funds merges, pays out excessive dividends that exceed what they would have paid without the TARP money, or pays for golden parachutes. This would apply to the auto industry as well as financial institutions.

Many Americans are continuing to have trouble keeping up with mortgage payments, and foreclosures are still a troubling part of that equation. I have co-sponsored several bills which would significantly reduce the number of foreclosures by providing a systematic way to modify distressed mortgages. Although the homeowner is clearly impacted by foreclosures, many tenants are also forced to vacate their residences with little notice if their rental unit goes into foreclosure. Over the summer I introduced a bill to provide new protections for tenants who are living in foreclosed homes. I am hopeful that this provision can be included in some future legislative package.

In the weeks and months ahead, Congress will continue working to address our economic crisis and I will keep you posted on our actions.

Regards,

Congressman Mike Capuano