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-second report outlining the investment transactions and program implementation under TARP.
Key developments during August 2010 include:
- Status of Tarp - Of the $475 billion authorized and $386 billion paid out, Treasury has recovered nearly $200 billion to date, including more than 75 percent of the TARP funds provided to banks, and expects these capital support programs to provide a positive return to taxpayers and expects to recover most of the funds that have been invested. According to Treasury, as a result of improved economic conditions and careful stewardship, the expected cost of TARP continues to fall. In the Mid-Session Review of the President’s 2010 Budget last August, the cost of TARP was projected to be $341 billion; as of the Mid-Session review of the 2011 Budget, the estimated cost of TARP was over $225 billion lower.
- General Motors Initial Public Offering - General Motors filed a registration statement with the Securities and Exchange Commission for an initial public offering of its common stock and Treasury agreed to be named as a selling shareholder. The offering is expected to occur before the end of the year. Treasury will retain the right, at all times, to decide whether and at what level to participate in the public stock offering.
- Community Development Capital Initiative for small banks - Treasury continues to implement this initiative under which capital is provided to community development financial institutions which serve communities underserved by traditional financial institutions. Nine financial institutions exchanged approximately $84.3 million of Capital Purchase Program investments for an equivalent amount of investment with Treasury. Treasury made an additional investment of $22.8 million in one institution at the time of the exchange.
- Housing programs
- Hardest Hit Fund - Treasury announced the third funding under the Hardest Hit Fund program to allocate $2 billion to seventeen states and the District of Columbia that have been hardest hit by high unemployment. The state agencies may begin to use the $600 million allocation of funds for initiatives that prevent avoidable foreclosures by assisting struggling homeowners in five states with high concentrations of people living in economically distressed areas.
- Home Affordable Modification Program - The Servicer Performance Report through July 2010 with data on Treasury’s housing programs was released, and the Department of Housing and Urban Development (HUD) and Treasury released the third Housing Scorecard with data on the nation’s housing market.