On Friday, Treasury released its fifth Section 105(a) Troubled Assets Relief Program (TARP) Report to Congress, covering the period from March 1, 2009 through March 31, 2009. As required pursuant to the Emergency Economic Stabilization Act of 2008 (EESA), these reports are provided every 30 days and set forth, among other items, the various actions taken by Treasury during March. During March, Treasury implemented the following programs and initiatives:
- Systemically Significant Failing Institution Program - On March 2, 2009, Treasury and the Federal Reserve announced a restructuring of the government's assistance to AIG, which included, among other things, the provision of a new $30 billion equity capital facility.
- Consumer and Business Lending Initiative (CBLI) - On March 3, 2009, the Federal Reserve launched the Term Asset-Backed Securities Loan Facility (TALF), a component under the CBLI that is run by the Federal Reserve and aimed at stimulating the securitization markets. The first tranche of TALF subscriptions closed on March 19, 2009, with additional monthly subscription periods to follow. In addition, on March 16, Treasury committed up to $15 billion through TARP to unfreeze secondary markets that support the Small Business Administration's Section 7(a) and 504 lending programs.
- Home Affordable Modification Program - On March 4, 2009, Treasury issued detailed guidelines on the refinance and modification programs for residential mortgage loans. These programs are designed to offer assistance to as many as three to four million homeowners making a good-faith effort to make their mortgage payments. (Please also see Alston & Bird's recent advisory on the program).
- Public-Private Investment Program (PPIP) - On March 23, 2009, Treasury announced details of the two-part PPIP. Using $75 to $100 billion in TARP capital and capital from private investors, the PPIP is expected to generate up to $500 billion in purchasing power to buy legacy assets. (Please also see Alston & Bird's three recent advisories on the PPIP.
- Capital Purchase Program (CPP) - During March, Treasury purchased $2.0 billion in senior preferred shares from 65 financial institutions through the CPP. In addition, during this period, Treasury received $353 million in principal and $2.3 million in accrued dividends from the repurchase of senior preferred shares by five financial institutions that previously participated in the CPP.
- Auto Supplier Support Program - On March 19, 2009, Treasury announced a $5 billion Auto Supplier Support Program, aimed at stabilizing the auto supply base.
- Warranty Commitment Program - In releasing its assessment of the viability of the restructuring plans submitted by General Motors and Chrysler, the Administration announced on March 30, 2009, that Treasury will provide government-funded protection for warranties issued by auto manufacturers that are in the process of restructuring.