Beginning late last week, recipients of Troubled Asset Relief Program (TARP) Capital Purchase Program (CPP) funds received a letter from the TARP Inspector General appointed under the Emergency Economic Stabilization Act inquiring about the financial institution’s:

  • Use of TARP funds
    • Anticipated uses at time CPP application was submitted
    • Any segregation of TARP funds
    • Actual uses
    • Expected uses of unspent funds
    • Any actions which would not have been taken without the CPP funds
  • Status of compliance with executive compensation limitations
    • Any assessment of loan risks and their relationship to executive compensation
    • Details of implementation of limitations
    • Whether changes to longer-term or deferred compensation have offset the effect of the TARP compensation limitations  

Responses signed by a senior executive officer and supporting documentation are required within 30 days of the date of the letter and are subject to criminal penalties for false statements.  

All documents referencing the actual or anticipated use of TARP funds, including internal emails, budgets and memoranda are requested to be segregated and preserved.

The form of the letter is not publicly available; however, for more information about the Office of the Special Inspector General for the Troubled Asset Relief Program, please see the following link: http://sigtarp.gov/index.shtml