On Sunday, the Office of the Special Inspector General for the Troubled Assets Relief Program (SIGTARP) released its fourth quarterly report to Congress. Special Inspector General Neil Barofsky was roundly critical of the inability of the Capital Purchase Program (CPP) to increase business and individual financing, and Treasury's failure to implement its small business lending program announced in March.
He also questioned whether existing TARP programs can accomplish their goals of reducing unemployment and reducing home foreclosures, given the current record levels of both, and whether TARP has actually solved any of the systemic problems it was designed to address: banks that were "too big to fail" are now even larger due to the TARP subsidies; they are less inclined to act responsibly given the extension of TARP and its perceived safety net until October 3, 2010; and bonuses to bank executives have not changed substantially, with some banks even seeming eager to exit the program so they will no longer be restricted by its pay rules. The report also examines the role of the Federal government in the mortgage-backed securities market, and speculates that there is a risk of reinflating a housing market "bubble" due to the government's effective control of virtually the entire residential mortgage market.
The report discloses that SIGTARP has 77 investigations currently ongoing, including various types of TARP, bank and mortgage fraud, money laundering, tax fraud and advance-fee schemes.
As of December 31, 2009, 10 of 12 announced TARP programs have been implemented, and approximately $549 billion of a potential $699 billion had been committed to asset purchases. 67 TARP recipients had paid back some or all of their principal or shares for a total repayment of $165 billion, leaving $369 billion, or nearly 53% of TARP's allocation, available for distribution. However, there have been issues with the repayment of dividends under the CPP: as of December 31, nearly $13 billion in dividends, interest and other income, and $4 billion in sales proceeds, have been received, but 74 TARP participants have missed dividend payments, leaving nearly $141 million outstanding. Finally, three recipients which received $2.6 billion in funds have filed for bankruptcy.