The Panel asked Treasury whether it is imposing reforms on financial institutions that are taking taxpayer money.  

Specifically, the Panel inquired about whether Treasury has required recipients to undertake any particular reforms, including:

1. The presentation of a viable business plan;
2. The replacement of failed executives and/or directors;
3. Reforms designed to prevent future crises, to increase oversight, and to ensure better accounting and transparency; and
4. Other appropriate operational reforms.

Conditions Set by the Dept. of Treasury

Treasury responded that it has:

• Required recipients of TARP funds to adhere to the executive compensation restrictions required by the Emergency Economic Stabilization Act;
• Published executive compensation standards for participants in its Capital Purchase Program. 
• Barred any increase in dividends for three years and restricted share repurchases.  Both the dividend increase and share buyback restrictions are designed to prevent banks from taking capital out of the financial system. 
• Imposed additional terms and conditions on AIG pertaining to executive compensation, corporate expenses, and lobbying.

Executive Compensation

While some executives at some financial institutions have voluntarily reduced their compensation, there is no uniform program in place.  

Treasury has the power to set the ���terms and conditions��� of any purchase it makes using the TARP funds.  

The Panel has continued to ask Treasury to explain why it has not required more of financial institutions, particularly in light of both the steps taken by the United Kingdom in similar circumstances and the extensive conditions imposed on auto companies as a condition for receiving TARP funds.