WASHINGTON (CN) – The Senate on Monday voted down an amendment that would have allowed banks to speed up repayment of loans from the Troubled Asset Relief Program.
“We all want TARP money to come back. There’s no debate about that,” said Senator Christopher Dodd, a democrat from Connecticut who opposed the measure.
The debate revolved around the criteria to determine the stability of a bank.
Dodd said he would not want banks to repay TARP money if they are not secure and objected to using capital as the only criteria for stability. Citibank and Bank of America are “well capitalized,” he said, but they must pass a stress test.
David Vitter, a republican from Louisiana, argued for the amendment. He said banks should be able to repay TARP money with interest as long as they meet safety criteria. He said the criteria were adequate.
“Individual institutions can’t decide their own destiny,” Vitter said. “It’s an important issue for our free market system.”
Senator John Kerry of Massachusetts voted against the amendment, as did Senator Dianne Feinstein from California.
Amendment 1016 failed 49 to 53 and was part of the Helping Families Save Their Homes Act.