On Thursday afternoon, a bipartisan group of Congressional negotiators announced they had reached an agreement in principle on a $700 billion package to inject fresh capital into the credit markets, according to the Mortgage Bankers Association (MBA).
Items of the agreement included taxpayer protection measures – such as requiring the Treasury Secretary to limit participating companies' executive pay – as well as oversight and transparency requirements and the establishment of homeownership preservation efforts. Funding authority was also authorized, according to a U.S. Senate Banking Committee document obtained by the MBA.
However, discussions later stalled, and the officials ended the day without reaching a complete agreement. The next round of talks was expected to take place without House Republicans, notes a Wall Street Journal article.
Current obstacles during Thursday's talks included opposition from some House Republicans who proposed an alternate plan that would allow banks to buy insurance for troubled assets rather than depending on taxpayer money. In addition, Democrats in both the House and Senate demanded certain protections for taxpayers and new assistance for troubled homeowners, the article adds.
Sources: Mortgage Bankers Association, Wall Street Journal