(Updates with Obama asking Bush to request funds)
By Jeremy Pelofsky
WASHINGTON, Jan 12 (Reuters) - President-elect Barack Obama has asked President George W. Bush to seek the remaining $350 billion of the $700 billion financial industry bailout, and he agreed to do so, the White House said on Monday.
Obama's fellow Democrats, who control both houses in Congress, have expressed reservations about releasing the remaining money unless stricter limits and protections are placed on how the aid is used.
To get access to the remaining $350 billion, the president must tell lawmakers he intends to tap the funds and Congress would have 15 days to consider the disbursement.
White House spokeswoman Dana Perino said Obama made the request to Bush on Monday morning.
"We will continue our consultations with the president-elect's transition team, and with Congress, on how best to proceed in accordance with the requirements of the statute," Perino said in a statement.
The Troubled Asset Relief Program, or TARP, has chiefly been used to give banks fresh capital so they can return to normal lending after a credit squeeze triggered by toxic mortgage-related assets.
But Obama and his fellow Democrats want more of the money to go directly to consumers struggling with a wave of home foreclosures and stricter limits to be imposed on those who receive the aid.
"The best course of action, of course, is to convince enough members of the Senate to vote positively for the request," Bush said during a White House news conference.
While the House of Representatives is expected to consider legislation this week to add limits on how the money is used, some Senate Democrats have questioned whether that legislation could be passed quickly enough and said a letter of assurances may suffice.
The letter, which could come from Obama or his incoming Treasury Secretary Timothy Geithner, should address foreclosure mitigation, bank lending practices, compensation for executives of firms receiving the aid, and accountability standards, Senate Democrats said on Sunday. (Additional reporting by Tabassum Zakaria and Ross Colvin, Editing by Doina Chiacu)