Troubled Asset Relief Program:
Status of Remaining Investment Programs
GAO-16-91R: Published: Nov 3, 2015. Publicly Released: Nov 3, 2015.
What GAO Found
As of August 31, 2015, two Troubled Asset Relief Program (TARP) investment programs—the Capital Purchase Program (CPP) and the Community Development Capital Initiative (CDCI)—were winding down. (GAO defines “winding down” as programs closed to additional participants but have participants that had not exited the program.) Combined, the total investment for these programs was almost $206 billion and their outstanding investments at the end of August 2015 totaled about $0.73 billion.
- Treasury’s total investment for CPP was about $205 billion; by December 2009, Treasury had disbursed all funds to 707 financial institutions nationwide. As of August 31, 2015, Treasury had received about $227 billion in repayments and income from its CPP investments and sales of original CPP investments, exceeding the amount originally disbursed by about $22 billion. Its outstanding investment balance stood at about $0.27 billion, and 20 institutions remained in the program.
- Treasury’s total investment for CDCI was approximately $0.57 billion for 84 institutions. By September 2010, Treasury had disbursed $0.21 billion and approximately $0.36 billion represented exchanges by banks of investments under CPP into CDCI. As of August 31, 2015, Treasury had received approximately $0.16 billion in repayments and income from CDCI participants. The outstanding investment balance was $0.46 billion, and 63 institutions remained in the program.
Why GAO Did This Study
The Emergency Economic Stabilization Act of 2008 provided GAO with broad oversight authorities for actions taken under TARP and included a provision that GAO report at least every 60 days on TARP activities and performance. As a result, we have continued to monitor and provide updates on TARP programs. This 60-day report provides an update on the status of Treasury’s returns on investment and participation for TARP investment programs that were winding down as of August 31, 2015. This included CPP, which was designed to provide capital to financially viable financial institutions through the purchase of senior preferred shares that would pay dividends and warrants to purchase shares of common or preferred stock, and CDCI, which was designed to provide capital to Community Development Financial Institutions by purchasing preferred shares and subordinated debentures.
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