the Emergency Economic Stabilization Act” and apply it to a trust fund that Frank has long wanted to create for low-income rental housing. (The measure, unfunded, was part of last year’s bailout of Fannie Mae and Freddie Mac.) Next, Frank would take $1.5 billion from TARP dividends for a so-called “neighborhood stabilization” fund. Republican critics have charged that both measures might allow federal dollars to be distributed to activist groups like the Association of Community Organizers for Reform Now, or ACORN.

Republican Sen. Orrin Hatch recently complained that TARP funds are “now being used as a go-to solution to address all of our nation’s economic ills.” Hatch and Democratic Sen. Blanche Lincoln recently introduced a bill that would require that TARP money goes back to the Treasury for debt reduction. Spending the dividend payments now, as Frank proposes, would reduce the chance that TARP might ever be a break-even deal for the taxpayers.

“We don’t know if TARP is going to be making any money, so taking the dividend payments going back to Treasury is pretty questionable,” says one House GOP aide. Indeed, in its June report, the GAO revealed that 17 troubled institutions have not paid their dividends, much less repaid the TARP money itself. And last week, the Wall Street Journal reported that three other institutions were not paying dividends. But now, Frank is proposing that dividends be spent immediately. “It defeats the idea of taxpayer protection,” says the GOP aide.