Financial Reform Watch

As the stock market continues its seesaw sessions this week, the Treasury Department is focusing on implementation of the programs that flow from the financial rescue package assembled in recent weeks.

After Monday's announcement of the capital infusion to the nine largest US banks, attention is turning to the thousands of community and regional banks nationwide that may be eligible for assistance from the capital purchase program. The Treasury Department has announced that November 14 is the deadline for institutions to get their applications in for assistance under the program. Our report on Tuesday, October 14 included the details of the capital purchase program.

Institutions seeking assistance under the capital purchase program are being encouraged to work through their regulator to ensure their information is in the system. While no standard application has yet been developed, we are expecting to see something along those lines soon. In the meantime, regulators, such as the Office of Thrift Supervision, are speaking with individual banks. This will be a streamlined process and approvals are likely to come quickly after the November 14 deadline passes.

On Capitol Hill, attention is shifting to establishing the Congressional Oversight Board and to examining options for an economic stimulus package. The oversight board is to be comprised of five members one each chosen by the majority and minority leaders of both Houses of Congress and one chosen by agreement of all four leaders. That body needs to be prepared to accept a report from Treasury in less than 30 days, so we anticipate action on those appointments soon. The potential stimulus package is under active discussion. Proposals are circulating that would dwarf the package approved by the House last month. Both House and Senate Democratic leaders are considering their own versions of a $ 150 billion package. Potential elements include Medicaid payments to the states, additional foreclosure assistance, extension of unemployment benefits, infrastructure grants for "ready-to-go" projects, tax breaks for job creation and others. GOP members in both Houses are focusing on tax cuts as a preferred approach. Congress is slated to return on November 17. Between now and then a decision will be made by leaders on whether to move a stimulus bill before or after the new President is sworn in.