Minnesota’s 8th District Rep. Jim Oberstar voted Thursday for the House plan to close loopholes and require more help for homeowners facing foreclosure and had some harsh words for the previous administration.

“This is an extremely frustrating situation. President Bush and Treasury Secretary Hank Paulson spent most of last year telling us not to worry and that the fundamentals of the economy (are) strong. They were wrong.  Last October, the Bush administration came forward and admitted that our nation’s banking system was in a financial crisis and on the brink of collapse. We had just a few short weeks to act on the President’s request for $700 billion with no strings attached," Oberstar said in a written statement about the Troubled Assets Relief Program (TARP).

"Congress imposed conditions on the financial rescue funding to require clear reporting on how the money would be used and prohibited CEOs from institutions receiving these funds from receiving excessive compensation or golden parachutes. However, Congress also trusted President Bush and Secretary Paulson to use good judgment.

"It is now clear that our trust was misplaced; the Bush administration was not able to account for how much of the first $350 billion was used. When the financial rescue funding was distributed, banks were not required to use the funding for loans to generate economic activity. Some of this money was also used for lavish executive benefit packages, despite a specific prohibition from Congress.

"Today, we are closing those loopholes.  Congress is going to ensure that Americans will know how the financial rescue funds are being spent to shore up our flagging economy and keep our nation from falling into a deeper recession.

"Most important, we will require that a good portion of the financial rescue funding be used to help keep struggling families in their homes and out of foreclosure."

He listed the key provisions of the TARP Reform and Accountability Act.

The legislation would:

• Strengthen accountability, close loopholes, increase transparency -- forcing banks to report how government funds are being spent;
• Require Treasury to take significant steps on foreclosure mitigation, calling for spending $100 billion (with a minimum of $40 billion) of TARP funds to help homeowners;
• Affirm that TARP should be used to benefit small financial institutions, consumer lending, auto companies, and municipalities; and
• Limit bonuses for executives of firms participating in TARP.

The incoming Obama administration has set out a restructuring plan of similarly tough standards for accountability and transparency in a letter to Congress, including:

• Easing credit and lending for small businesses, consumers and municipalities;
• Strengthening oversight of the program;
• Launching “a sweeping effort to address the foreclosure crisis”; and
• Limiting compensation for executives at firms that receive government funds, banning most dividend payments and limiting stock buybacks and acquisitions of financially healthy companies.