Yesterday, Treasury released its monthly progress report to Congress on the Troubled Asset Relief Program (TARP). The report, required every 30 days under Section 105(a) of the Emergency Economic Stabilization Act of 2008 (EESA), is the fourteenth report provided and summarizes Treasury’s implementation of the various TARP programs and investment transactions during December.
The following key developments took place in December 2009 under TARP programs:
- Secretary Geithner certified the extension of TARP authority until October 3, 2010. with a focus on winding down many programs, limiting new TARP commitments in 2010 to foreclosure mitigation, stabilizing the housing market, and providing of capital to small and community banks as a source of credit for businesses, and restricting the use of EESA funds to existing commitments. Although Secretary Geithner extended the TARP authority until October 3, 2010, it is expected that "the total commitments under the programs will not exceed $550 billion of the $700 billion authorized."
- Treasury released the Office of Financial Stability (OFS) Agency Financial Report for Fiscal Year 2009 with a description of the activities and financial results for the fiscal year ended September 30, 2009. The Government Accountability Office rendered unqualified (“clean”) audit opinions on the OFS financial statements and OFS internal control of financial reporting, and found that OFS maintained effective internal control over financial reporting with no material weaknesses.
- 12 banks repaid $50.85 billion of Treasury’s investments under the Capital Purchase Program (CPP). In addition, Bank of America redeemed $20 billion of preferred stock, and Citigroup repurchased $20 billion of trust preferred securities, ending the Targeted Investment Program, bringing the total amount of TARP repayments to $165 billion in 2009, or two-thirds of total TARP investments in banks.
- Treasury, the FDIC, the Federal Reserve Bank of New York and Citigroup agreed to terminate the loss-sharing agreement with Citigroup that covered a pool of originally $301 billion in assets. No losses were incurred under the program, and Treasury and the FDIC retain $5.2 billion of trust preferred securities of Citigroup, as well as warrants.
- Treasury commenced public auctions of warrants issued by various CPP participants and raised a total of approximately $1.1 billion. The warrants sold were issued by Capital One Financial Corporation, JPMorgan Chase & Co. and TCF Financial Corporation.
- Treasury received $890.81 million in dividend and interest payments under all TARP Programs, including the first quarterly $1 billion principal repayment from General Motors. Total dividends, interest and fee payments received through December 2009 are approximately $12.89 billion. Treasury also completed an additional capital investment of $3.8 billion in GMAC and converted a portion of Treasury’s existing investment in GMAC to common stock and mandatorily convertible preferred stock.
- Treasury made final CPP investments in 37 small banks totaling $180.14 million.