Today, Treasury released its latest monthly progress report to Congress on the Troubled Asset Relief Program (TARP). The report is required under Section 105(a) of the Emergency Economic Stabilization Act of 2008 (EESA) and is the twenty-third report outlining the investment transactions and program implementation under TARP.
Key developments during September 2010 include:
- The authority to make new financial commitments under TARP ended on the second anniversary of EESA; Treasury has recovered over $204 billion of the $475 billion authorized and $387 billion paid out, and expects to recover most of the funds that have been invested. Treasury now estimates that the total cost of TARP will be about $50 billion, with cumulative proceeds from all TARP investments totaling almost $30 billion. In September 2010, Treasury received over $385 million in dividends, interest and distributions from TARP investments, including approximately $105 million under the Capital Purchase Program (CPP), and $129 million from Chrysler and $47 million from General Motors under the Automotive Industry Financing Program.
- Treasury completed its third plan for sales of common stock that represent the TARP’s CPP investment in Citigroup, Inc. To date, Treasury has sold approximately 4.1 billion shares of Citigroup common stock at an average price of $4 per share, for total gross proceeds of more than $16.4 billion. Treasury also sold the trust preferred securities that represented Citigroup’s payment for the TARP commitment made under the Asset Guarantee Program. That guarantee was terminated in December 2009, and the recent sale resulted in $2.246 billion of net proceeds for taxpayers.
- Treasury conducted public auctions for warrants issued by Hartford Financial Services Group, Inc. and Lincoln National Corporation, with gross proceeds of approximately $713.7 million and approximately $216.6 million, respectively.
- Treasury completed funding to provide capital to community development financial institutions under the Community Development Capital Initiative (CDCI). In total, Treasury has invested approximately $570 million in 84 community development financial institutions, which includes approximately $363 million exchanged by 28 financial institutions from the CPP.
- American International Group, Inc. (AIG) reached an agreement-in-principle with Treasury, the Federal Reserve Bank of New York, and the trustees of the AIG Credit Facility Trust to restructure the company, putting it in a stronger position to repay the taxpayer. Treasury says the plan should allow AIG to accelerate its exit from government support and reposition itself as an independent, privately owned company over time.
TARP Housing Initiatives:
- Hardest Hit Fund programs: On September 23, Treasury executed commitments under the Hardest Hit Fund of $2 billion to seventeen states and the District of Columbia. On September 29, Treasury also executed additional commitments of $3.5 billion among the existing nineteen states that have previously received Hardest Hit Fund allocations.
- Making Home Affordable programs: The Servicer Performance Report through August 2010 with data on Treasury’s housing programs was released, and the Department of Housing and Urban Development and Treasury released the fourth Housing Scorecard with data on the nation’s housing market.