The US government has said it has supplied $3.84 billion to 35 banks in a third round of payments from the $700 billion financial system rescue program.
The Treasury Department said yesterday it authorized the payments on Friday, bringing the total supplied to banks to $165.3 billion.
That leaves less than $85 billion to be spent out of the $250 billion that has been earmarked to make direct purchases of stock in banks as a way of bolstering their balance sheets and encouraging them to resume more normal lending.
The announcement of the new payments came the Bush administration's handling of the $700 billion rescue fund is facing new scrutiny from lawmakers.
Neel Kashkari, the assistant Treasury secretary heading up the rescue program, was scheduled to testify today before the House Financial Services Committee, which is holding a hearing on a report on the bailout efforts issued last week by the Government Accountability Office.
Committee Chairman Barney Frank said the GAO report showed that Treasury had no way of knowing whether the taxpayer money being paid to the banks is being used to increase lending - the goal of the effort.
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Frank said the administration was refusing to enforce requirements that the rescue funds be used by the banks to increase lending, which he called a "blatant refusal" to follow the intent of Congress in approving the bailout program.
The Treasury announcement yesterday said that the largest stock purchase in the third round of the program was $935 million paid to purchase stock in Popular Inc, a bank in San Juan, Puerto Rico.