Best reason to feel a little better about TARP

Having experienced the S&L crisis of the '80s first hand, Elizabeth Warren now keeps a keen eye on Treasury's oversight of the bank rescue program.

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By George Mannes, senior writer

Elizabeth Warren, chairwoman of the Congressional Oversight Panel.

NEW YORK (MONEY Magazine) -- Worried that the Treasury Department's $700 billion Troubled Asset Relief Program might turn into a boondoggle for banks and a black hole for taxpayers? Elizabeth Warren is too. But as chairwoman of the Congressional Oversight Panel - one of the three organizations overseeing TARP - she's doing something about it.

A Harvard Law School professor, Warren, 59, has experienced bubble pain firsthand. During the late-'80s savings-and-loan crisis, she and her husband had to sell their $229,000 Texas home. It took them 28 months, and they lost $53,000. "It almost brought us to our knees financially," she says.

Warren went on to become a well-known challenger of the financial status quo, spotlighting such problems as bankruptcy's roots in medical expenses and how two-income households can be worse off than single-earner ones. Along the way, she earned a reputation as someone who speaks up when things just don't smell right - a reputation that has only grown lately. Within weeks of her November appointment to the TARP job, her committee issued a report blasting the Treasury for lax oversight of the program. She challenged the Treasury's objection to an FDIC proposal to reduce foreclosures. And she asserted that TARP overpaid for stakes it took in banks last fall. In short, she is pushing the program from a "trust us" attitude to greater openness and accountability.

Whether TARP goes down in history as a success or a scandal remains to be seen - but with Warren on the case, the chances of the former are a whole lot higher.

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