Updated 6:54 p.m.

WASHINGTON -- National City Bank weathered the Civil War and the Great Depression, but it couldn't survive a Treasury Department plan that was supposed to help banks. So a Northeast Ohio congressman on Tuesday called a higher authority: President Bush.

This was the latest attempt by Rep. Steve LaTourette, Republican of Bainbridge Township, to keep the Cleveland bank from a year-end, fire-sale purchase by PNC Financial Services Group of Pittsburgh.

"I want President Bush to know what's going on," LaTourette said in an interview after a congressional hearing at which he asked the Treasury Department to reconsider its denial of federal bailout money to help National City.

"He may stand behind his man; he's a pretty loyal guy," LaTourette said, referring to Treasury Secretary Henry Paulson as the president's man. "But I would hope they participate in a way that says, 'Let's look at the facts.' "



Video of LaTourette-Paulson exchange by American News Project.

LaTourette's proposed meeting with Bush or his representative, Paulson and Comptroller of the Currency John Dugan has not been scheduled, although the congressman hopes to know by the end of the week when and where it might take place.

LaTourette said he wants the meeting "because National City Bank was one of the best capitalized banks in the country," yet one that, according to banking analysts, "was taken down by the government. That's not what this program was supposed to do."

Treasury Department regulators in October determined that despite nearly $100 billion in deposits and $150 billion in assets, National City was in too poor of shape to qualify for TARP, the Troubled Asset Relief Program that is part of the financial services bailout bill Congress approved last month.

That lack of confidence apparently was due in large part to National City's nearly $20 billion in risky loans. After the Treasury Department's decision, National City's board of directors recommended selling the Cleveland institution, which dates to 1845, to PNC for $2.23 a share.

LaTourette said he understands the part about the bad assets. "But that evaluation is presuming that the economy never gets better, those assets never have any value, and that's not a good way to measure something when you're dealing with a bank that's been around forever."

At the hearing Tuesday before the House Financial Services Committee, he asked Paulson why he refused help to a bank with 29,000 employees in nine states, and urged him to reconsider. Paulson said he would be "perfectly happy" to discuss the decision with Dugan. But Paulson also stressed his "great confidence" in Dugan's judgment.

"I believe, based upon generally what I know, that he made the right decision," said Paulson, who emphasized that he relies on regulators like Dugan to be sure the TARP isn't "used to prop up failing banks, or banks that might fail."

"If there's a bank that is in distress and it is acquired by a well-capitalized bank, there is more capital in the system, more available for lending, better for communities, better for everyone," Paulson said.

PNC not only is well-capitalized, but it also has been approved for TARP money -- and will get National City's would-be share, too, estimated at up to $4 billion, if the $5.6 billion sale goes through. PNC also will get a $5 billion tax break for assuming National City's bad loans.

"Basically, they are going to purchase the seventh-largest bank in the country for free," LaTourette said.

National City would not discuss whether it would accept TARP money if Paulson changed his mind. "We have no comment on today's hearing," said spokeswoman Kristen Baird Adams.

North Carolina Democrat Mel Watt echoed LaTourette's concerns about the Treasury Department "influencing who is a winner and is a loser." Watt cited Treasury's treatment of Charlotte's Wachovia Bank, which Wells Fargo is purchasing.

"There are a number of people in my community who believe that had a different set of decisions been made regarding Wachovia, Wachovia would still be a viable institution today," he said.

Other committee members grilled Paulson on his failure to use money in the $700 billion bailout package to reduce mortgage foreclosures. Barney Frank, the Massachusetts Democrat who chairs the committee, put in the hearing record a letter from Rep. Dennis Kucinich in which the Cleveland Democrat urged Congress to withhold more TARP money from the Treasury Department because of its failure to act on foreclosures.

New York Democratic Rep. Gary Ackerman called the Treasury Department's decision to avoid buying troubled mortgages from banks, as it originally promised, "the second-largest bait-and-switch scheme that history has ever seen, second only to the reasons given us to vote for the invasion of Iraq."

Paulson said that the money had to be used to prevent a collapse in the financial system and that the Treasury Department is still looking for ways to reduce foreclosures.

Others questioned Paulson about whether he would favor using TARP money to aid automobile manufacturers. Paulson suggested that instead, Congress help the industry with money from a bill that included $25 billion for auto plants to produce higher-efficiency vehicles.

But, Paulson added, "We do not believe that it is desirable to have an auto company fail with the economy in its current situation."