Neel Kashkari, the official who administers the Troubled Asset Relief Program, wrote to Citigroup Inc., Bank of America Corp. and 18 others on Jan. 16 seeking figures on business and consumer loans. Treasury also wanted details on purchases of mortgage-backed and asset-backed securities, according to documents obtained by Bloomberg News. Kashkari will stay for a few months after President-elect Barack Obama is sworn in today.

Obama’s aides criticize outgoing Treasury Secretary Henry Paulson’s approach to rescues as lacking transparency and not doing enough to get credit flowing though the economy. While Paulson has defended the cash injections as having averted a collapse of the financial system, Obama had to pledge changes before lawmakers approved the release of the second $350 billion.

“Banks are becoming the whipping boy for the Treasury’s failed policies,” said Joseph Mason, a Louisiana State University professor in Baton Rouge who previously worked at the Treasury’s Office of the Comptroller of the Currency. “They’re going to continue to face this pressure.”

Citigroup spokesman Michael Hanretta said the bank will meet all reporting requirements. Bank of America spokesman Scott Silvestri said the bank extended $115 billion in new credit in the fourth quarter of last year and plans to “do whatever we’re asked to do by Treasury.”

Obama Considers New Bailout

Obama’s advisers are considering options for dealing with troubled assets still clogging banks’ balance sheets, according to people familiar with the matter. Among alternatives: setting up a government-backed “bad” or “aggregator” bank to hold the securities, or leaving the assets on banks’ books and providing a government guarantee.

The Treasury also asked the banks for commentary on their lending activity, to provide “qualitative” updates on trends. In addition, the government wants information on secured lending and underwriting of debt and equities. The first report covers data for October, November and December and is due by Jan. 31. Results will be made public. Subsequent reports will be monthly.

20 Banks

The 20 banks receiving the Treasury’s monthly data request are: Citigroup, Bank of America, JPMorgan Chase & Co., Wells Fargo & Co., Goldman Sachs Group Inc., Morgan Stanley, PNC Financial Services Group Inc., U.S. Bancorp, SunTrust Banks Inc., Capital One Financial Corp., Regions Financial Corp., Fifth Third Bancorp., BB&T Corp., Bank of New York Mellon Corp., KeyCorp, CIT Group Inc., Comerica Inc., State Street Corp., Marshall & Ilsley Corp. and Northern Trust Corp.

Advisers to the incoming president called for more accountability from banks that receive taxpayer money.

“Anyone who looks at it has got to be disappointed when they look at what’s happened to lending, has got to think the results have been unsatisfactory,” Lawrence Summers, director- designate of the National Economic Council, said on CBS’s “Face the Nation” program Jan. 18.

Members of the outgoing president’s party have joined in criticism of the Treasury’s handling of the TARP funds.

“My constituents and I myself have not seen the results that we ought to see from it,” Senator Charles Grassley, a Republican from Iowa, said in a Bloomberg Television interview. “I want to send a signal to the new administration not to make the same mistakes that the present administration has done.”

TARP Haves, Have Nots

By requesting monthly status reports, Treasury officials aim to dampen such criticism. The department also plans a quarterly comparison of banks that received rescue money with banks that didn’t, as report data becomes available. In the meantime, the monthly statements will track the activity of the banks receiving the most aid.

“The purpose of this snapshot is to provide insight” into how banks are behaving after receiving rescue funds, the Treasury said in its letter to the banks.

Obama’s team has asked some of Paulson’s staff to stay on for the first few months of the administration. One of those officials, Kashkari, said last week that markets and the economy are mired “at a point of low confidence” that’s slowing the flow of credit.

Confidence

“As long as confidence remains low, banks will remain cautious about extending credit, and consumers and businesses will remain cautious about taking on new loans,” he said in a Jan. 13 speech. “As confidence returns, Treasury expects to see more credit extended.”

In the monthly reports, the Treasury is seeking specific information on first mortgages, home equity and credit card loans, along with a summary of other types of consumer lending. Requested business lending data includes commercial real estate lending and consumer and industrial loans.

Pressuring banks to boost lending runs the risk of encouraging more bad loans, and borrowers need to be spurred as well, said Bert Ely, chief executive officer of Ely & Co., a consulting firm in Alexandria, Virginia.

“This is all very political and the rhetoric is getting pretty fierce,” Ely said. “They’re blaming the banks unfairly.”

To contact the reporter on this story: To contact the reporter on this story: Rebecca Christie in Washington at Rchristie4@bloomberg.net

Last Updated: January 20, 2009 14:29 EST

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