The Obama administration will continue to seek the authority to place non-bank financial institutions in receivership, Treasury Secretary Timothy Geithner said today.
Passing legislation that would expand federal receivership authority to include systemically important non-bank financial institutions such as American International Group Inc., New York, is the centerpiece of Obama’s initial effort to strengthen regulation of financial services companies, Geithner testified during a hearing on the Troubled Asset Relief Program organized by the TARP Congressional Oversight Panel.
Even though the government now owns 80% of AIG, there is no “legal framework” for the U.S. government to place the troubled company into receivership, Geithner said.
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Legislation the Obama administration has proposed would give the Federal Deposit Insurance Corp. authority to place large, non-bank financial institutions into receivership and either rehabilitate them or liquidate them.
The House Financial Services Committee is expected to vote on the proposal by late May, before Congress departs for its Memorial Day recess.
Rep. Jeb Hensarling, R-Texas, a member of the oversight panel and a member of the House Financial Services Committee, criticized the Treasury Department’s efforts.