WASHINGTON — Ever need a college loan? You’ve probably pored through the notorious eight-page FAFSA application. A likely homebuyer? Try the five-page Uniform Residential Loan Application.
But what if you’re a bank looking for a few billion from the federal government’s new Capital Purchase Program? Two pages.
That’s all the nation’s financial institutions had to fill out to request money from the government’s $700 billion Troubled Asset Relief Program. In fact, the first page requires only bank contact information.
For some lawmakers and watchdog groups, the simple request form has become a symbol of a government financial-bailout plan in need of more accountability and oversight.
“When student lenders and mortgage companies ask more questions in lending thousands of dollars than the federal government does when it injects billions of dollars’ worth of capital, we should all be concerned,” said Rep. Spencer Bachus of Alabama, the top Republican on the House Financial Services Committee.
But the application process is not particularly easy.
Applicants had to submit their forms by Nov. 14 to banking regulators, who have access to vast amounts of data about the banks seeking the money. Those regulators are generally well-acquainted with the applicants and then make a recommendation to the Treasury on whether to provide the capital infusion or not.
Bachus, in an interview, contrasted the bank application process to the paces Congress put the auto industry through when Detroit’s Big Three automakers asked for financial relief.
Of course, General Motors and Chrysler were pleading for their lives. The bank-capitalization program is designed only for financially stable institutions.
“It’s still somewhat shocking to the senses,” said Steve Ellis, vice president of the nonpartisan Taxpayers for Common Sense, “when you think that credit-card applications are a heck of a lot longer than that.”
