Yesterday, Treasury released its seventh Section 105(a) Troubled Asset Relief Program (TARP) Report to Congress for May 2009. As required under the Emergency Economic Stabilization Act of 2008 (EESA), these reports are provided every 30 days and describe the actions taken by Treasury “to implement and develop programs under” TARP and Treasury's Financial Stability Plan. The report provides details on the steps Treasury took in May to promote the goals of EESA, including:
- Auto Industry Financing Program (AIFP). On May 1, 2009, Treasury and the Canadian government agreed to make a joint loan to Chrysler LLC as debtor-in-possession (DIP) in its bankruptcy case. Treasury then increased its loan commitment on May 20, bringing Treasury's share of the maximum amount available under the loan to a total of $3.8 billion. Treasury also invested $7.5 billion in mandatorily convertible preferred interests in GMAC to support that company’s ability to provide financing to Chrysler dealers and customers and to address GMAC’s capital needs identified in the Supervisory Capital Assessment Program (SCAP). On May 29, 2009, Treasury exchanged its $884 million loan to General Motors (GM) for a portion of GM’s common equity interest in GMAC. Treasury also funded to GM approximately $361 million on May 27, 2009, which will provide government-funded protection for automobile warranties issued by GM to the extent that, during the restructuring process, GM is unable to honor its warranty commitments.
- Capital Purchase Program (CPP). Treasury continued its investments in qualified financial institutions (QFIs) through the CPP in May and continued to receive dividend payments from institutions participating in the CPP. On May 13, 2009, Treasury announced the re-opening of the CPP with new terms aimed at encouraging participation by small community banks that are QFIs as defined under any published term sheet. On May 14, 2009, Treasury notified a number of insurance companies that they had received preliminary approval to participate in the CPP.
- Making Home Affordable Program. Additional servicers executed Servicer Participation Agreements under the Home Affordable Modification Program in May. On May 14, 2009, Treasury announced further details on the Making Home Affordable Program.