Frank To Push For More Federal Lending For States

Massachusetts Congressman Barney Frank will push the Obama Administration to free up lending for states, including Massachusetts.

Frank, who chairs the House Financial Services Committee, says the poor credit market means states are forced to borrow at high interest rates, and federal loans would help alleviate the problem.

"We are talking about using federal resources in effect, both for the short term and the long term, to make it cheaper for the commonwealth and other states to borrow, which allows our money to go a lot further," Frank says.

Frank meets with Treasury Secretary Timothy Geithner on the issue Wednesday.

Massachusetts Treasurer Timothy Cahill met with Frank last week to ask for federal loans.

"Treasury has the authority to do this," Cahill says. "So we wanted to make sure that Congressman Frank would tell the Secretary that this is very, very important to states all across the country."

In the past, the state has borrowed in order to pay its bills, including millions of dollars in payments to cities and towns known as local aid.