TROUBLED ASSET 

RELIEF PROGRAM

Capital Purchase 

Program Largely Has 

Wound Down

Report to Congressional Committees

May 2016

GAO-16-524

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-16-524, a report to 

congressional committees

May 2016

TROUBLED ASSET RELIEF PROGRAM

Capital Purchase Program Largely Has Wound Down

Why GAO Did This Study

CPP was established as the primary 

means of restoring stability to the 

financial system under the Troubled 

Asset Relief Program (TARP). Under 

CPP, Treasury invested almost $205 

billion in 707 eligible financial 

institutions between October 2008 and 

December 2009. CPP recipients have 

made dividend and interest payments 

to Treasury on the investments. The 

Emergency Economic Stabilization Act 

of 2008 includes a provision that GAO 

report at least every 60 days on TARP 

activities. This report examines (1) the 

status of CPP, (2) the financial 

condition of institutions remaining in 

the program, and (3) Treasury’s 

strategy for winding down the program. 

To assess the program’s status, GAO 

reviewed Treasury reports on the 

status of CPP. In addition, GAO used 

financial and regulatory data to assess 

the financial condition of institutions 

remaining in CPP. Finally, GAO 

interviewed Treasury officials to 

examine the agency’s exit strategy for 

the program. 

GAO provided a draft of this report to 

Treasury for its review and comment. 

Treasury provided technical comments 

that GAO incorporated as appropriate.

What GAO Found

The Capital Purchase Program (CPP) largely has wound down and the 

Department of the Treasury’s (Treasury) returns on CPP investments surpassed 

the original amount disbursed. As of February 29, 2016, Treasury had received 

$226.7 billion in repayments and income from its CPP investments, exceeding 

the amount originally disbursed by almost $22 billion. As of the same date, 16 of 

the 707 institutions remained in the program. Treasury’s most recent estimate of 

lifetime income for CPP (as of Nov. 30, 2015) was about $16 billion. 

Status of the Capital Purchase Program, as of February 29, 2016

Most of the remaining CPP institutions have continued to exhibit signs of financial 

weakness. Specifically, 9 of the 16 institutions had negative returns on average 

assets (a common measure of profitability) in 2015. Also, 6 institutions had a 

lower return on assets in 2015 than they did at the end of 2011. Treasury officials 

stated that the remaining CPP firms generally had weaker capital levels and 

worse asset quality than firms that had exited the program. Also, nearly all the 

firms that are required to pay dividends have continued to miss payments.

Treasury expects most remaining CPP institutions to exit through restructurings 

but has not set time frames for winding down the program. Over the past 6 years, 

repayment of Treasury’s investment and Treasury’s auction of CPP securities to 

interested investors were the primary means by which institutions exited CPP. 

Restructurings—the expected exit method for the remaining firms—allow 

institutions to negotiate terms for their investments and require institutions to 

raise new capital or merge with another institution. With this option, Treasury 

agrees to receive cash or other securities, typically at a discount. Treasury 

officials expect to rely primarily on restructurings because the overall financial 

condition of the remaining institutions makes full repayment unlikely.

View GAO-16-524. For more information, 

contact Daniel Garcia-Diaz at (202) 512-8678 

or garciadiazd@gao.gov. 
Page i GAO-16-524 Capital Purchase Program

Letter 1

Background 3

CPP Largely Has Wound Down and Program Income Surpassed 

Original Investments 4

Most of the Remaining CPP Institutions Continue to Exhibit Signs 

of Financial Weakness 8

Treasury Expects Most Remaining Institutions to Exit through 

Restructurings 10

Agency Comments 13

Appendix I GAO Contact and Staff Acknowledgments 16

Figures

Figure 1: Status of the Capital Purchase Program, as of February 

29, 2016 5

Figure 2: Status of Institutions That Received Capital Purchase 

Program Investments, as of February 29, 2016 7

Figure 3: Remaining Capital Purchase Program Investments, as of 

February 29, 2016 8

Figure 4: Exits from the Capital Purchase Program, as of 

December 31, 2015 12

Contents
Page ii GAO-16-524 Capital Purchase Program

Abbreviations

CDCI Community Development Capital Initiative

CPP Capital Purchase Program

EESA Emergency Economic Stabilization Act of 2008

FDIC Federal Deposit Insurance Corporation

SBLF Small Business Lending Fund

TARP Troubled Asset Relief Program

Treasury Department of the Treasury

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Page 1 GAO-16-524 Capital Purchase Program

441 G St. N.W.

Washington, DC 20548

May 6, 2016

Congressional Committees

From October 2008 through December 2009, the Department of the 

Treasury (Treasury) invested almost $205 billion in 707 financial 

institutions as part of federal efforts to help stabilize U.S. financial 

markets. The investments were made through the Capital Purchase 

Program (CPP), the first and largest initiative under the Troubled Asset 

Relief Program (TARP).1 The Emergency Economic Stabilization Act of 

2008 (EESA) gave Treasury the authority to buy or guarantee up to $700 

billion, later reduced to $475 billion, of the “troubled assets” that were 

believed to be at the heart of the financial crisis, including mortgages, 

mortgage-backed securities, and certain other financial instruments.2

Under this authority, in October 2008 Treasury created CPP to provide 

capital to viable financial institutions by purchasing preferred shares and 

subordinated debt. In return for its investments, Treasury received

dividend or interest payments and warrants.3 The program was closed to 

new investments on December 31, 2009. Since then, Treasury has 

continued to oversee and divest its CPP investments, collect dividend and 

interest payments, and sell warrants.

EESA includes a provision that GAO report at least every 60 days on 

TARP activities and performance.4 We have been monitoring, analyzing, 

and providing updates on TARP programs, including CPP, in response to 

 1

The Emergency Economic Stabilization Act of 2008 (EESA), Pub. L. No. 110-343, 122 

Stat. 3765 (codified as amended at 12 U.S.C. §§ 5201-5261), established the Office of 

Financial Stability within Treasury and provided Treasury with broad authority to purchase 

and guarantee certain types of troubled assets to stabilize the financial markets. 

2

§§ 3(9), 101, and 115(a), 122 Stat. at 3767 and 3780 (codified as amended at 12 U.S.C. 

§§ 5202(9), 5211, and 5225(a)). The Dodd-Frank Wall Street Reform and Consumer 

Protection Act reduced Treasury’s authority to purchase or insure troubled assets to a 

maximum of $475 billion. Pub. L. No. 111-203, § 1302, 124 Stat. 1376, 2133 (2010) 

(codified as amended at 12 U.S.C. § 5225(a)). 

3

A warrant is an option to buy shares of common stock or preferred stock at a 

predetermined price on or before a specified date. 

4

§ 116(a), 122 Stat. at 3783-85 (codified at 12 U.S.C. § 5226(a)).

Letter
Page 2 GAO-16-524 Capital Purchase Program

this provision.5 This report examines (1) the status of CPP, including 

repayments and other proceeds, as well as investments outstanding; (2) 

the financial condition of institutions remaining in CPP; and (3) Treasury’s 

strategy for winding down the program.

To assess the status of CPP, we analyzed data from Treasury. In 

particular, we used Treasury’s February 2016 Monthly Report to 

Congress to determine the dollar amounts of outstanding CPP 

investments, and the number and geographical distribution of remaining 

participants as of February 29, 2016. We used data from Treasury’s 

February 2016 Cumulative Dividends, Interest and Distributions report to 

determine the amount of dividends paid and the number of institutions 

that had made full repayments. We determined that the financial 

information used in this report is sufficiently reliable to assess the status 

of CPP based on the results of our audits of the financial statements for 

TARP (from fiscal years 2009 through 2015). As part of the financial 

statement audits, we tested Treasury’s internal controls over financial 

reporting. To assess the financial condition of the 16 institutions that 

remained in CPP as of February 29, 2016, we analyzed financial and 

regulatory data from SNL Financial, which provides comprehensive 

regulatory financial data on financial institutions. For example, we 

compared various indicators of financial health—such as return on 

average assets and reserves to nonperforming loans. We assessed the 

reliability of SNL Financial data for previous studies by testing required 

data elements, reviewing existing information about the data and the 

system that produced them, and interviewing SNL officials. We 

determined that the financial information we used is sufficiently reliable for 

this report. We also leveraged our past reporting on TARP to inform our 

assessments of the financial institutions. To determine Treasury’s 

strategy to exit CPP, we interviewed Treasury officials knowledgeable 

about the agency’s strategy.

 5

See GAO, Troubled Asset Relief Program: Opportunities Exist to Apply Lessons Learned 

from the Capital Purchase Program to Similarly Designed Programs and to Improve the 

Repayment Process, GAO-11-47 (Washington, D.C.: Oct. 4, 2010); Capital Purchase 

Program: Revenues Have Exceeded Investments, but Concerns about Outstanding 

Investments Remain, GAO-12-301 (Washington, D.C.: Mar. 8, 2012); Troubled Asset 

Relief Program: Treasury’s Use of Auctions to Exit the Capital Purchase Program, 

GAO-13-630 (Washington, D.C.: July 8, 2013); Troubled Asset Relief Program: Status of 

the Wind Down of the Capital Purchase Program, GAO-14-388 (Washington, D.C.: Apr. 7, 

2014); Troubled Asset Relief Program: Winding Down the Capital Purchase Program, 

GAO-15-367R (Washington, D.C.: Mar. 6, 2015); and Troubled Asset Relief Program: 

Status of Remaining Investment Programs, GAO-16-91R (Washington, D.C.: Nov. 3, 

2015).
Page 3 GAO-16-524 Capital Purchase Program

We conducted this performance audit from January 2016 to May 2016 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

CPP was created to help stabilize the financial markets and banking 

system by providing capital to qualifying regulated financial institutions 

through the purchase of preferred shares and subordinated debt.6 Rather 

than purchasing troubled mortgage-backed securities and whole loans, as 

initially envisioned under TARP, Treasury used CPP investments to 

strengthen the capital levels of financial institutions. Treasury determined 

that strengthening capital levels was the more effective mechanism to 

help stabilize financial markets, encourage interbank lending, and 

increase confidence in the financial system. On October 14, 2008, 

Treasury allocated $250 billion of the original $700 billion, later reduced to 

$475 billion, in overall TARP funds for CPP. In March 2009, the allocation 

was reduced to reflect lower estimated funding needs, as evidenced by 

actual participation rates. On December 31, 2009, the program was 

closed to new investments.

Under CPP, qualified financial institutions were eligible to receive an 

investment of 1–3 percent of their risk-weighted assets, up to $25 billion.7

In exchange for the investment, Treasury generally received preferred 

shares that would pay dividends.8 As of the end of 2014, all the 

 6

For CPP, qualifying financial institutions generally include stand-alone U.S.-controlled 

banks and savings associations, as well as bank holding companies and savings and loan 

holding companies. 

7

Risk-weighted assets are all assets and off-balance-sheet items held by an institution, 

weighted for risk according to the capital standards of the federal banking regulators. In 

May 2009, Treasury increased the maximum amount of CPP funding that small financial 

institutions (qualifying financial institutions with total assets of less than $500 million) could 

receive from 3 to 5 percent of risk-weighted assets. 

8

For S corporations, a federal business type that provides certain tax and other benefits, 

Treasury received subordinated debt rather than preferred shares in order to preserve the 

special tax status of these institutions. The Internal Revenue Code prohibits S 

corporations from having more than one class of stock outstanding. Interest rates for this 

debt are 7.7 percent for the first 5 years and 13.8 percent for the remaining years. 

Background
Page 4 GAO-16-524 Capital Purchase Program

institutions with outstanding preferred share investments were required to 

pay dividends at a rate of 9 percent, rather than the 5 percent rate in 

place for the previous 5 years. EESA requires that Treasury also receive 

warrants to purchase shares of common or preferred stock or a senior 

debt instrument to further protect taxpayers and help ensure returns on 

the investments. Institutions are allowed to repay CPP investments with 

the approval of their primary federal bank regulator, and after repayment, 

institutions are permitted to repurchase warrants on common stock from 

Treasury.

Treasury largely has wound down its CPP investments, and as of 

February 29, 2016, had received $226.7 billion in repayments and income

from its CPP investments, exceeding the amount originally disbursed by 

almost $22 billion. The repayments and income amounts included almost 

$200 billion in repayments and sales of original CPP investments, as well 

as about $12 billion in dividends and interest, almost $7 billion in 

proceeds in excess of costs, and about $8 billion from the sale of 

warrants (see fig.1). After accounting for write-offs and realized losses 

from sales totaling about $5 billion, CPP had almost $0.3 billion in 

outstanding investments as of February 29, 2016.9 Treasury’s most 

recent estimate of lifetime income for CPP (as of Nov. 30, 2015) was 

about $16 billion.10

 9

Write-offs and realized losses include losses sustained from investments in the 32 

institutions that have gone into bankruptcy or receivership and any losses sustained when 

Treasury sold its investments in CPP institutions. 

10Treasury, in conjunction with the Office of Management and Budget, estimates lifetime 

costs (or income) for CPP four times a year, using the aggregate value of investments at 

market prices. Estimated lifetime cost represents Treasury’s best estimate of what the 

program ultimately will cost the taxpayer. Treasury’s methodology for estimating lifetime 

costs includes a discount rate that reflects market risk for future cash flows. Treasury’s 

estimate of lifetime income for CPP is consistent with an estimate by the Congressional 

Budget Office.

CPP Largely Has 

Wound Down and 

Program Income 

Surpassed Original 

Investments
Page 5 GAO-16-524 Capital Purchase Program

Figure 1: Status of the Capital Purchase Program, as of February 29, 2016

a

The end date is the date on which the program stopped acquiring new assets and no longer received 

funding.

b

The total amount of repayments includes approximately $363 million from institutions that transferred 

to the Community Development Capital Initiative and $2.2 billion from institutions that transferred to 

the Small Business Lending Fund.

c

Amount is as of November 30, 2015.

As of February 29, 2016, 16 of the 707 institutions that originally 

participated in CPP remained in the program (see fig. 2).11 Of the 691 

institutions that had exited the program, 261 repurchased their preferred 

 11The information on CPP in this report is as of February 29, 2016, unless otherwise 

noted. As of April 19, 2016, 14 institutions remained in CPP, as 2 institutions recently 

exited the program—US Metro Bank of Garden Grove, California, on March 23, 2016 and 

HCSB Financial Corporation of Loris, South Carolina, on April 11, 2016.
Page 6 GAO-16-524 Capital Purchase Program

shares or subordinated debentures in full.12 Another 165 institutions 

refinanced their shares through other federal programs, 28 through the 

Community Development Capital Initiative (CDCI) and 137 through the 

Small Business Lending Fund (SBLF), another Treasury fund that was

separate from TARP.13 An additional 190 institutions had their 

investments sold through auction, 39 institutions had their investments 

restructured through non-auction sales, and 32 institutions went into 

bankruptcy or receivership.14 The remaining 4 merged with other 

institutions.

 12Preferred shares give the stockholder priority dividend and liquidation claims over 

common stockholders. Subordinated debentures are a form of debt security that rank 

below other senior claims on assets but have priority over all preferred and common 

shareholders.

13Twenty-eight of the institutions refinanced investments through CDCI, a TARP program 

that provides capital to Community Development Financial Institutions that have a federal 

depository institution supervisor. CDCI is structured like CPP, but it provides more 

favorable capital terms, and also covers credit unions. The other 137 institutions 

refinanced their shares through SBLF. SBLF, which closed in 2011, was a $30 billion 

program that provided capital to qualified community banks and community development 

loan funds with assets of $10 billion or less.

14When investments are restructured, Treasury receives cash or other securities, which

generally can be sold more easily than preferred stock, but Treasury’s investments are 

sometimes sold at a discount.
Page 7 GAO-16-524 Capital Purchase Program

Figure 2: Status of Institutions That Received Capital Purchase Program 

Investments, as of February 29, 2016

a

When investments are restructured, Treasury receives cash or other securities that generally can be 

sold more easily than preferred stock, but Treasury’s investments are sometimes sold at a discount.

As shown in figure 3, as of February 29, 2016, the remaining $257.1 

million in outstanding CPP investments was concentrated in half of the 

remaining 16 institutions. The institutions with the eight highest amounts 

of outstanding CPP investments accounted for 88 percent ($225.5 million) 

of the outstanding investments, while one institution accounted for 49 

percent ($124.97 million). The remaining $31.6 million (12 percent) was 

spread among the other eight institutions.
Page 8 GAO-16-524 Capital Purchase Program

Figure 3: Remaining Capital Purchase Program Investments, as of February 29, 2016

Our analysis of financial condition metrics over the past 4 years indicates 

that among the 16 institutions remaining in CPP as of February 29, 2016, 

several have continued to face challenges.15 Although the median return 

on average assets—a key indicator of a company’s profitability—was 

higher in the fourth quarter of 2015 than in 2011, 9 of the 16 institutions 

had negative returns in 2015.16 Furthermore, 6 of the 16 institutions had a 

lower return on assets in 2015 than they did at the end of 2011. The 

remaining institutions also had varying levels of reserves for covering 

losses, as measured by the ratio of reserves to nonperforming loans.17

For example, 6 of 15 institutions had lower levels of reserves for covering 

 15We analyzed financial and regulatory data from SNL Financial. All financial information 

in the analysis generally reflects quarterly regulatory filings as of December 31, 2015. 

16The median return on average assets measure shows how profitable a company is 

relative to its total assets and how efficiently management uses its assets to generate 

earnings. 

17Generally, a higher ratio of reserves to nonperforming loans demonstrates an 

institution’s ability to cover losses from nonperforming loans.

Most of the 

Remaining CPP 

Institutions Continue 

to Exhibit Signs of 

Financial Weakness
Page 9 GAO-16-524 Capital Purchase Program

losses in 2015 compared to 2011, while 9 institutions had higher levels.18

Treasury officials stated that the remaining CPP institutions generally had 

weaker capital levels and worse asset quality relative to institutions that 

had exited the program. They noted that this situation was a function of 

the lifecycle of the program, because stronger institutions had greater 

access to new capital and were able to exit, while the weaker institutions 

had been unable to raise the capital needed to exit the program.

Many of the remaining CPP institutions were on the “problem bank list” of 

the Federal Deposit Insurance Corporation (FDIC) and most have been 

delinquent on their dividend payments for several years. The problem 

bank list contains banks with demonstrated financial, operational, or 

managerial weaknesses that threaten their continued financial viability; 

the number of problem banks is publicly reported on a quarterly basis. 

Specifically, as of December 31, 2015, 11 of the then 17 remaining CPP 

institutions (65 percent) were on FDIC’s problem bank list.19 The

percentage of remaining CPP institutions on the problem bank list is 

higher than the number we reported for the previous 2 years: 47 of 83 (57 

percent) in 2013 and 20 of 34 (59 percent) in 2014.20

Of the 16 CPP institutions remaining as of February 29, 2016, 1 of the 14 

required to pay dividends made the most recent scheduled dividend or 

interest payment.21 The 13 institutions that are delinquent have missed an 

average of 23 quarterly dividend payments, with the fewest missed 

 18Our analysis of reserves to nonperforming assets included 15 of the 16 remaining 

institutions because one bank produced “not meaningful” results as defined by SNL 

Financial. The calculated ratio was above SNL Financial’s “meaningful” threshold of 1,000. 

Similar to prior TARP reports, “not meaningful” results were not included in the analysis.

19FDIC’s problem bank list does not include bank holding companies. Bank holding 

company recipients of CPP funds were accounted for if one or more of their subsidiary 

depositories were designated as problem banks. 

20See GAO-15-367R. 

21This excludes those institutions that made payments towards a past-due amount or 

payments made by institutions that exited the program as of February 29, 2016. CPP 

dividend and interest payments are due on February 15, May 15, August 15, and 

November 15 of each year, or on the first business day after those dates. The reporting 

period ends on the last day of the calendar month in which the dividend or interest 

payment is due. Therefore, payment data as of February 29, 2016, represent the most 

recently available information for this report. Two of the remaining CPP institutions are not 

required to pay dividends because Treasury exchanged its preferred shares in those 

institutions for common shares. 
Page 10 GAO-16-524 Capital Purchase Program

payments at 16 and the most missed payments at 29.22 Institutions can 

elect whether to pay dividends and may choose not to pay for a variety of 

reasons, including decisions they or their federal or state regulators make 

to conserve cash and capital. However, investors may view an 

institution’s ability to pay dividends as an indicator of its financial strength 

and may see failure to pay as a sign of financial weakness. Treasury 

officials told us that they regularly monitor and have direct and 

substantive conversations with the remaining 16 institutions, including 

discussions about their plans to exit the program.

Treasury officials expect most of the remaining CPP institutions to exit 

through restructurings but do not have a specific end date for exiting all 

their CPP investments and winding down the CPP program. EESA does 

not require Treasury to set a specific date on which the program will 

expire. Although Treasury has not changed its exit strategy, which 

consists of repayments, restructurings, and auctions, the extent to which 

each approach has been used has shifted over time.23

• Repayments. Repayments allow financial institutions, with the 

approval of their regulators, to redeem their preferred shares in full. 

Institutions have the contractual right to redeem their shares at any 

time. As of February 29, 2016, 261 institutions had exited CPP 

through repayments. Institutions must demonstrate that they are 

financially strong enough to repay the CPP investments to receive 

regulatory approval to proceed with a repayment exit.

• Restructurings. Restructurings allow troubled financial institutions to 

negotiate new terms or discounted redemptions for their investments. 

Raising new capital from outside investors (or a merger) is a 

prerequisite for a restructuring. With this option, Treasury receives 

cash or other securities that generally can be sold more easily than 

preferred stock, but the restructured investments are sometimes sold 

at a discount to par value. According to Treasury officials, Treasury 

facilitated restructurings as an exit from CPP in those cases in which 

 22Under CPP terms, institutions pay cumulative dividends on their preferred shares—

except for banks that are not subsidiaries of holding companies, which pay noncumulative 

dividends. Some other types of institutions, such as S corporations, received their CPP 

investments in the form of subordinated debt and pay interest rather than dividends. 

23Treasury announced its CPP exit strategy in May 2012. See GAO-13-630, GAO-14-388, 

and GAO-15-367R. 

Treasury Expects 

Most Remaining 

Institutions to Exit 

through 

Restructurings
Page 11 GAO-16-524 Capital Purchase Program

new capital investment and redemption of the CPP investment by the 

institutions otherwise was not possible. Treasury officials said that 

they approved the restructurings only if the terms represented a fair 

and equitable financial outcome for taxpayers. Treasury completed 39 

such restructurings through February 29, 2016.24

• Auctions. Treasury conducted the first auction of CPP investments in 

March 2012, and has continued to use this strategy to sell its 

investments. As of February 29, 2016, Treasury had conducted a total 

of 28 auctions of stock from 190 CPP institutions. Through these

transactions, Treasury received about $3 billion in proceeds, which 

was about 80 percent of the investment’s face amount. As we 

previously reported, Treasury has sold investments individually to 

date, but noted that combining smaller investments—into pooled 

auctions—remained an option.25 Whether Treasury sells stock 

individually or in pools, the outcome of this option will depend largely 

on investor demand for these securities and the quality of the 

underlying financial institutions.

The method by which institutions have exited the program has varied over 

time. As shown in figure 4, from 2009 through 2011, the majority of 

institutions exiting CPP did so through repayment or refinancing their 

shares through CDCI and SBLF. From 2012 to 2014, auctions were the 

predominant exit strategy. During that same period, restructurings also 

increased. For example, in 2012, 4 percent of exits (7 of 159) were 

restructurings. In 2014, 15 percent (8 of 52) used restructuring as an exit 

strategy. In 2015, restructurings remained a common strategy, 

representing 35 percent (6 of 17) of exits, while auctions dropped from 44 

percent (23 of 52) in 2014 to 29 percent (5 of 17) in 2015.

 24This number does not include two additional investments that were restructured when 

Treasury exchanged its preferred shares for common shares because these institutions 

remained in CPP.

25Unlike Treasury’s auctions of individual CPP preferred stock investments, in which 

multiple bidders could receive an allocation of the preferred stock at a single clearing 

price, Treasury’s pooled auctions likely would allow the single highest bidder to purchase 

all of the securities included in the pool. See GAO-13-630.
Page 12 GAO-16-524 Capital Purchase Program

Figure 4: Exits from the Capital Purchase Program, as of December 31, 2015

Treasury officials told us they expected restructurings to be the primary 

exit strategy in the future, but as noted earlier, auctions remain a possible 

exit strategy. Treasury expects to rely on restructurings and auctions 

because the overall financial condition of the remaining institutions makes 

full repayment unlikely. At this time, Treasury does not have any plans to 

fully write off any investments. Treasury officials anticipate that the 

current strategy to restructure or auction the remaining investments will 

result in a better return for taxpayers. According to officials, any savings 

achieved by writing off the remaining CPP assets and eliminating costs 

associated with maintaining CPP would be limited, because much of the 

TARP infrastructure will remain intact for several years to manage other 

TARP programs. Treasury officials also noted that writing off the 
Page 13 GAO-16-524 Capital Purchase Program

remaining assets could be seen as diminishing the equitable treatment of 

institutions across the program. That is, writing off the remaining assets, 

(and thereby not requiring repayment from the remaining institutions)

would be unfair to the institutions that already had repaid their investment 

and exited the program.

We provided Treasury with a draft copy of this report for review and 

comment. Treasury provided technical comments that we have 

incorporated as appropriate. 

We are sending copies of this report to the appropriate congressional 

committees. This report will be available at no charge on our website at 

http://www.gao.gov.

If you or your staff have any questions about this report, please contact 

me at (202) 512-8678 or garciadiazd@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report.

Daniel Garcia-Diaz

Director, Financial Markets and Community Investment

Agency Comments
Page 14 GAO-16-524 Capital Purchase Program

List of Committees

The Honorable Thad Cochran

Chairman

The Honorable Barbara Mikulski

Ranking Member

Committee on Appropriations

United States Senate

The Honorable Richard Shelby

Chairman

The Honorable Sherrod Brown

Ranking Member

Committee on Banking, Housing, and Urban Affairs

United States Senate

The Honorable Michael Enzi

Chairman

The Honorable Bernard Sanders

Ranking Member

Committee on the Budget

United States Senate

The Honorable Orrin G. Hatch

Chairman

The Honorable Ron Wyden

Ranking Member

Committee on Finance

United States Senate

The Honorable Harold Rogers

Chairman

The Honorable Nita Lowey

Ranking Member

Committee on Appropriations

House of Representatives
Page 15 GAO-16-524 Capital Purchase Program

The Honorable Tom Price

Chairman

The Honorable Chris Van Hollen

Ranking Member

Committee on the Budget

House of Representatives

The Honorable Jeb Hensarling

Chairman

The Honorable Maxine Waters

Ranking Member

Committee on Financial Services

House of Representatives

The Honorable Kevin Brady

Chairman

The Honorable Sander Levin

Ranking Member

Committee on Ways and Means

House of Representatives
Daniel Garcia-Diaz, (202) 512-8678 or garciadiazd@gao.gov

In addition to the contact named above, Karen Tremba (Assistant 

Director), Anne Akin (Analyst-in-Charge), Bethany Benitez, William R. 

Chatlos, Lynda Downing, Risto Laboski, Marc Molino, Barbara 

Roesmann, Christopher Ross, and Max Sawicky have made significant 

contributions to this report.

Appendix I: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(100587) Page 16 GAO-16-524 Capital Purchase Program
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