In connection with their respective duties to oversee TARP-related transactions, the Special Inspector General for the Troubled Assets Relief Program (SIGTARP) and the Congressional Oversight Panel (COP) will review the valuation process for the sale of warrants received by Treasury under its investments through the Capital Purchase Program (CPP). Neil Barofsky, Special Inspector General for SIGTARP, and Elizabeth Warren, Chair of the COP, sent a joint letter to the chairs and ranking members of the Senate Committee on Banking, Housing, and Urban Affairs and the House Financial Services Committee last week outlining their coordinated actions.

SIGTARP and the COP will begin a complementary effort to ensure that the warrants held by Treasury under the CPP are accurately priced in order to ensure “an appropriate return on investment for the government and, consequently, American taxpayers.” To that end, the COP “has begun a project to estimate the reasonable range of values for remaining warrants which Treasury hold in relation to its CPP investments.” This analysis, expected to be released in connection with the COP’s July report to Congress, will “highlight the policy choices and degree of discretion that Treasury has as it negotiates the sale of these warrants.” SIGTARP will begin an audit of the warrant repurchase and sale processes, with special attention given as to whether “Treasury has established an objective basis for its ultimate valuation” of the warrants and whether these criteria are clearly and consistently applied.