The Department of the Treasury

CITIZENS’ REPORT

Office of Financial Stability – Troubled Asset Relief Program

Fiscal year 2015

CITIZENS’ REPORT | FISCAL YEAR 2015

TABLE OF CONTENTS iii

Table of Contents

MESSAGE FROM THE DEPUTY ASSISTANT SECRETARY FOR FINANCIAL STABILITY................................ v

Background and OFS Organization Structure.........................................................................................1

OFS Operational Goals............................................................................................................................2

Operational Goal One: Complete the Wind-down of the Investment Programs...................................2

Operational Goal Two: Continue Helping Families in Need to Avoid Foreclosure.................................4

Operational Goal Three: Minimize Cost to Taxpayer.............................................................................6

Operational Goal Four: Continue to Operate with the Highest Standards of Transparency, 

Accountability, and Integrity ..................................................................................................................7

Fiscal Year 2015 and 2014 Financial Summary and Cumulative Net Income.......................................10

Appendix A: TARP Glossary ..................................................................................................................15

For the online version of this Report see www.FinancialStability.gov

and search on Reports by Frequency, Yearly 
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

iv MESSAGE FROM THE DEPUTY ASSISTANT SECRETARY
CITIZENS’ REPORT | FISCAL YEAR 2015

MESSAGE FROM THE DEPUTY ASSISTANT SECRETARY v

MESSAGE FROM THE DEPUTY ASSISTANT SECRETARY FOR

FINANCIAL STABILITY

November 23, 2015

I am pleased to present the Office of Financial Stability’s (OFS) Citizens’ Report for the Fiscal Year 

2015. This report describes our financial and performance results for the seventh year of the 

Troubled Asset Relief Program (TARP). The Emergency Economic Stabilization Act of 2008 (EESA) 

established OFS within the Office of Domestic Finance at the Department of the Treasury (Treasury) 

to implement the TARP. With the nation in the midst of the worst financial crisis since the Great 

Depression, TARP was created to “restore the liquidity and stability of the financial system.” It was 

an extraordinary response to an extraordinary crisis. 

Today, it is generally agreed that as a result of the forceful and coordinated response by the federal 

government through TARP and many other emergency programs, we helped avert what could have 

been a devastating collapse of our financial system. Although we are still repairing the damage from 

the crisis and many families still face challenges on a daily basis, the financial system is much more 

stable and our economy is growing, albeit not as fast as we would like. Credit is more available than 

would otherwise be the case for families, businesses, and local governments; banks are better 

capitalized; and we are implementing reforms to address the underlying causes of the crisis. 

OFS has made significant progress towards winding down TARP investments. As of September 30, 

2015, OFS had collected 103 percent of the $412.1 billion in program funds that were disbursed 

under TARP investment programs, as well as an additional $17.5 billion from Treasury’s equity

stake in AIG. Here is where we stand concerning the four categories of TARP investment programs: 

• Banking Programs. OFS has collected more than $275.4 billion (including $339 million 

collected in fiscal year 2015) for all TARP bank support programs through repayments, sales, 

dividends, interest, and other income, compared to $245.5 billion invested. As of September 

30, 2015, $714 million in banking program investments remained outstanding, primarily in 

community banks, and OFS is continuing to wind down these investments through 

repurchases by banks and asset sales. 

• Credit Market Programs. OFS has completed the wind-down of all of the TARP credit 

market programs, including investments made under the Public-Private Investment 

Program (PPIP), Term Asset-Backed Securities Loan Facility (TALF) program, and the SBA 

7(a) Securities Purchase Program. As of the end of fiscal year 2015, OFS has collected $23.6

billion compared to $19.1 billion disbursed under these programs.

• Auto Industry Financing Program. In December 2014, OFS completed the wind-down of the 

Auto Industry Finance Programs (AIFP) with the sale of its remaining 55 million shares of 

Ally Financial. In total, OFS collected $70.5 billion through sales, repayments, dividends, 

interest, recoveries, and other income, compared to $79.7 billion disbursed under the 

program. 

• American International Group. In fiscal year 2013, OFS exited all remaining holdings in the 

American International Group, Inc. (AIG). During the financial crisis, the peak amount of 

assistance committed by OFS and the Federal Reserve to prevent the collapse of AIG totaled 
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

vi MESSAGE FROM THE DEPUTY ASSISTANT SECRETARY

$182.3 billion, a portion of which was later canceled. As a result of the combined efforts of 

AIG, Treasury, and the Federal Reserve, $22.7 billion in excess of the total of funds 

disbursed to AIG was recovered through sales and other income. Of the $67.8 billion total 

disbursed to AIG by OFS, TARP’s cumulative net collections from repayments, sales, 

dividends, interest, and other income related to AIG assets totaled $55.3 billion. Treasury’s 

non-TARP AIG shares generated proceeds in excess of cost of $17.5 billion, resulting in net 

proceeds in excess of cost of $5.0 billion for Treasury as a whole.

While OFS carefully winds down the investment programs under TARP, we are continuing to 

implement and enhance the TARP Housing Programs to continue helping struggling homeowners 

avoid foreclosure, primarily through mortgage modifications and other forms of direct assistance. 

These programs (which include the government sponsored enterprises (GSE) programs) have also 

created new mortgage modification and consumer protection standards that have helped transform 

the mortgage servicing industry. During the past fiscal year, the Obama administration made a 

number of changes to strengthen the Making Home Affordable Program (MHA), including increasing 

borrower incentives and reducing documentation requirements, that will help more families qualify 

for MHA assistance.

The financial and performance data contained in this report are reliable and complete. For the 

seventh consecutive year, OFS has earned unmodified opinions from the Government Accountability 

Office (GAO) on its financial statements for TARP, and its internal control over financial reporting 

for TARP.

Sincerely,

Mark McArdle

Deputy Assistant Secretary for Financial Stability
CITIZENS’ REPORT | FISCAL YEAR 2015

ABOUT THE OFFICE OF FINANCIAL STABILITY 1

Background and OFS Organization Structure

Background

In response to the worst financial crisis since the 

Great Depression, the Troubled Asset Relief 

Program (TARP) was created on October 3, 2008 

pursuant to the Emergency Economic 

Stabilization Act (EESA). To carry out the 

authorities given to the Secretary of the 

Treasury to implement TARP, the U.S. 

Department of the Treasury (Treasury)

established the Office of Financial Stability 

(OFS) within the Office of Domestic Finance. 

EESA authorized the Secretary of the Treasury 

to establish TARP to “purchase, and to make 

and fund commitments to purchase, troubled 

assets from any financial institution, on terms 

and conditions as are determined by the 

Secretary” to restore the liquidity and stability 

of the financial system. The terms “troubled 

assets” and “financial institution” are defined 

within EESA, which can be found at: 

http://www.gpo.gov/fdsys/pkg/BILLS110hr1424enr/pdf/BILLS-110hr1424enr.pdf

In addition, Section 109 of EESA provides 

authority to assist homeowners.

The Dodd-Frank Wall Street Reform and 

Consumer Protection Act (the Dodd-Frank Act),

signed into law in July 2010, reduced total 

TARP purchase authority from $700 billion to a 

cumulative $475 billion. OFS’s authority to 

make new commitments under TARP expired on 

October 3, 2010. OFS is carefully managing the 

disposition of TARP financial assets to recover 

OFS’s outstanding investments while continuing 

to implement initiatives to help struggling 

homeowners avoid foreclosure.

OFS Organization Structure

OFS is currently headed by the Deputy 

Assistant Secretary for Financial Stability. 

Reporting to the Deputy Assistant Secretary are 

four major organizations: the Office of Finance 

and Operations, the Office of the Chief Home

Ownership Preservation Officer, the Office of the 

Chief Investment Officer, and the Office of the 

Chief Compliance Officer. A Chief Counsel’s 

Office and an Office of Financial Agents also 

reports to the Deputy Assistant Secretary as 

well as to other Departmental Officers.

The OFS organization chart follows:

OFS is not envisioned as a permanent 

organization, so to the maximum extent possible 

when economically efficient and appropriate, 

OFS utilizes private sector expertise to support 

the execution and liquidation of TARP 

programs. These firms assist in the areas of 

custodial services, accounting and internal 

controls, administrative support, legal advisory, 

financial advisory, and information technology.

Deputy Assistant Secretary for 

Financial Stability

Office of the 

Chief 

Investment 

Officer

Office of 

Financial 

Agents

Office of the 

Chief Home 

Ownership 

Preservation

Officer

Office of 

Finance and 

Operations

Chief 

Counsel

Office of the 

Chief 

Compliance 

Officer
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

2 OFS OPERATIONAL GOALS

OFS Operational Goals

OFS’s Operational Goals were developed by 

management to achieve our strategic objective to 

wind down emergency financial crisis response 

programs under our strategic goal of promoting

domestic economic growth and stability while 

continuing reforms of the financial system. The 

following discussion of OFS operational goals 

focuses on significant events that occurred 

during fiscal years 2015 and 2014. 

Operational Goal One: Complete the 

Wind-down of the Investment 

Programs

Banking Support Programs

OFS disbursed a total of $245.5 billion under the 

various TARP bank programs. As of September

30, 2015, OFS has collected more than $275.4

billion through repayments, dividends, interest, 

warrant sales, and other income, representing 

$29.9 billion in excess of disbursements. OFS is 

focused on recovering TARP funds in a manner 

that continues to promote the nation’s financial 

stability while maximizing returns on behalf of

the taxpayers. 

Capital Purchase Program (CPP)

In fiscal year 2015, OFS continued to make

substantial progress winding down the CPP 

according to its three-pronged exit strategy. 

Each dollar collected from CPP participants now 

represents additional collections in excess of 

disbursements on behalf of taxpayers. From 

inception of the program through September 30, 

2015, OFS has received $199.6 billion in CPP 

repayments/sales, along with $12.1 billion in 

dividends and interest, and $14.9 billion of 

proceeds in excess of cost, which totals $226.6

billion. As of September 30, 2015, $268 million 

in CPP gross investments remained outstanding

in 19 institutions.

OFS received preferred stock or debt in each 

bank in which it made an investment, as well as 

warrants. Under the terms of the CPP, 

participating financial institutions may repay 

the funds they received at any time, with the 

approval of their regulators. 

Throughout fiscal year 2015, OFS continued to 

implement the CPP exit strategy by periodically 

selling preferred stock and subordinated debt in 

CPP participants through private auctions. OFS

held two preferred placement auctions with 

combined net proceeds of $50 million during 

fiscal year 2015 compared to six auctions with 

$289 million in net proceeds in fiscal year 2014. 

During fiscal year 2015 and 2014, 22 and 62

investments were repurchased or sold for a total 

of $148 million and $1.5 billion, respectively.

Another component of OFS’s exit strategy for the 

CPP is to restructure certain investments in 

limited cases. This is typically done in 

connection with a merger or the bank’s plan to 

raise new capital and is generally proposed by 

the bank. 

Under the CPP, OFS has also received warrants 

to purchase common shares or other securities 

from the banks. OFS has followed a policy of 

disposing of warrants as soon as practicable if no 

agreement is reached on a repurchase. OFS 

held one warrant auction in fiscal year 2015, 

with net proceeds of $49 million. As of 

September 30, 2015, OFS has collected $8.1

billion in net proceeds from the sale of warrants

since inception. 

Additional information on the CPP, including 

details on the program’s purpose, overview, and 

status can be found at the following website:

http://www.treasury.gov/initiatives/financialstability/TARP-Programs/bank-investmentprograms/cap/Pages/default.aspx
CITIZENS’ REPORT | FISCAL YEAR 2015

OFS OPERATIONAL GOALS 3

Community Development Capital Initiative

(CDCI)

Unlike the CPP, OFS did not take substantial 

actions during fiscal year 2015 to wind down the 

CDCI because of the unique circumstances 

facing participating institutions. In particular, 

many CDCI participants lack the same access to 

capital markets that CPP institutions have, 

making it more challenging for them to repay 

the TARP investments in their institutions. 

OFS completed funding through this program in 

September 2010 with a total investment amount 

of $570 million for 84 institutions. Of this 

amount, $363 million (nearly $356 million from 

principal and nearly $8 million from warrants) 

represented exchanges by 28 CPP institutions 

converting into the CDCI. During fiscal years

2015 and 2014, OFS collected a total of $28

million and $20 million, respectively, in

repayments, dividends, and interest from

institutions in the CDCI program. As of 

September 30, 2015, $446 million in CDCI 

investments remained outstanding.

OFS will continue to closely monitor the 

performance of the CDCI and make decisions 

regarding the program’s wind-down at a later 

date. Additional information on CDCI, including 

details on the program’s purpose, overview, and 

status can be found at the following website:

http://www.treasury.gov/initiatives/financialstability/TARP-Programs/bank-investmentprograms/cdci/Pages/default.aspx

Credit Market Programs

OFS has now completed the wind-down of all 

three credit market programs that were 

launched under TARP. A total of $19.1 billion 

was disbursed through these programs, and a 

total of $23.6 billion has been collected through 

September 30, 2015.

Public Private Investment Program (PPIP)

OFS completed the wind-down of the PPIP

during fiscal year 2015, with no debt or equity 

investments outstanding after the final 

outstanding equity repayment was made in June 

2013. During fiscal year 2015, OFS received the 

final termination notice and distribution from 

the one remaining Public Private Investment 

Fund (PPIF) for a total of $63,311. From 

inception of the program through September 30, 

2015, OFS has received $2.4 billion in interest 

and investment income and $1.5 billion in net 

proceeds in excess of cost. The total of $22.5 

billion of repayments, sales, and investment 

income exceeds the original investment by $3.9

billion.

Additional information on PPIP, including 

details on fund performance can be found at the 

following website:

http://www.treasury.gov/initiatives/financialstability/reports/Pages/Public-PrivateInvestment-Program-Quarterly-Report.aspx

Term Asset-Backed Securities Loan Facility

(TALF)

OFS originally committed to provide credit 

protection of up to $20.0 billion in the form of a 

subordinated loan commitment to TALF, LLC to 

support up to $200.0 billion of lending by the

Federal Reserve Bank of New York (FRBNY). 

After subsequent reductions in OFS’s 

commitments in 2013, the commitment was 

$100 million – the initial loan amount disbursed 

by OFS to fund the TALF, LLC.

During fiscal year 2013, OFS’s original $100 

million loan disbursed was fully repaid with 

interest. As of September 30, 2015, all TALF 

loans provided by FRBNY have been repaid in 

full and the program is closed. Since inception, 

accumulated income earned from investments in 

TALF, LLC totaled $685 million, including $39 

million in fiscal year 2015.
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

4 OFS OPERATIONAL GOALS

Additional information on TALF, including 

details on the program’s purpose, overview, and 

status can be found at the following website:

http://www.treasury.gov/initiatives/financialstability/TARP-Programs/credit-marketprograms/talf/Pages/default.aspx

Automotive Industry Financing Program 

OFS fully wound down the AIFP during fiscal 

year 2015 selling its remaining stake in Ally 

Financial. OFS disbursed $79.7 billion in loans 

and equity investments to the auto industry 

through the AIFP. As of September 30, 2015, 

OFS has collected $70.5 billion through sales, 

repayments, dividends, interest, recoveries, and 

other income under this program.

OFS invested $17.2 billion in Ally Financial –

formerly known as GMAC – $16.3 billion in 

initial GMAC investments and an $884 million 

loan to Old GM on behalf of GMAC. 

OFS took significant action in fiscal years 2015 

and 2014 to exit its remaining investment in 

Ally Financial. During fiscal year 2014, OFS

sold Ally common stock through a private 

offering, an initial public offering, and a series of 

pre-arranged written trading plans. OFS held 

55 million shares of Ally common stock after the 

last trading plan, which ended in October 2014.

In December 2014, OFS sold all of its remaining 

shares in Ally Financial generating cumulative 

receipts of $19.6 billion or $2.4 billion in 

proceeds in excess of cost.

During fiscal year 2015, OFS collected $100

million in recoveries from the Old Carco 

Liquidation Trust, set up in accordance with the 

plan of liquidation for the debtors of Old 

Chrysler. 

Additional information on the AIFP, including 

details on the program’s purpose, overview, and 

status can be found at the following website:

http://www.treasury.gov/initiatives/financialstability/TARP-Programs/automotiveprograms/Pages/default.aspx

Operational Goal Two: Continue 

Helping Families in Need to Avoid 

Foreclosure

Making Home Affordable (MHA)

Consistent with OFS’s goal of continuing to help 

struggling homeowners find solutions to avoid 

foreclosure wherever possible, OFS is continuing 

to implement the MHA program and to reach as 

many homeowners as possible. As of September 

30, 2015, 77 servicers are participating in

Treasury’s MHA program for non-GSE loans. As 

of September 30, 2015, OFS has commitments to 

fund up to $29.8 billion in MHA payments and 

has disbursed $12.2 billion since inception.

OFS publishes quarterly assessments of servicer 

performance containing data on compliance with 

program guidelines as well as program results 

metrics. OFS believes that these assessments 

have set the standard for transparency about 

mortgage servicer efforts to assist homeowners 

at risk of foreclosure, and encourage servicers to 

improve processes and performance for 

foreclosure prevention activities.

MHA performance highlights for fiscal year 2015

can be found at: 

http://www.treasury.gov/initiatives/financialstability/reports/Pages/Making-HomeAffordable-Program-Performance-Report.aspx

The largest program within MHA is the Home 

Affordable Modification Program (HAMP). 

HAMP offers eligible homeowners at risk of 

foreclosure the opportunity to obtain reduced 

monthly mortgage payments that are affordable 

and sustainable over the long-term.
CITIZENS’ REPORT | FISCAL YEAR 2015

OFS OPERATIONAL GOALS 5

As of September 30, 2015, approximately 1.5

million homeowners have received permanent 

modifications through HAMP.2 Homeowners 

participating in HAMP have collectively 

experienced nearly a 35 percent median 

reduction in their mortgage payments—

representing more than $481 per month. MHA 

has also encouraged the mortgage industry to 

adopt similar programs that have helped 

millions more at no cost to taxpayers by 

establishing standards and best practices for 

loss mitigation evaluations.

In fiscal year 2015, OFS made changes to MHA 

programs to better assist homeowners avoid 

foreclosure and create a safety net for borrowers 

facing rate step-ups in a HAMP modification. 

Specifically, OFS enhanced borrower pay-forperformance incentives; required servicers to 

offer to recast a borrower’s loan which provides 

payment relief; reduced the HAMP Tier 2 

interest rate; and increased borrower relocation 

assistance for Home Affordable Foreclosure 

Alternative (HAFA) short sale or deed-in-lieu

transactions. In addition, OFS announced a 

streamlined modification process under HAMP

in July 2015 to assist homeowners who are 

seriously delinquent and have not completed a 

HAMP application.

Additional information on MHA, including 

details on the program’s purpose, overview, and 

status can be found at the following website:

http://www.treasury.gov/initiatives/financialstability/TARPPrograms/housing/mha/Pages/default.aspx

 

2

Includes modifications on both non-GSE loans and 

GSE loans. 923,226 of these modifications were OFS 

funded consisting of 893,568 non-GSE modifications 

and 29,658 GSE modifications.

Housing Finance Agency (HFA) Innovation 

Fund for the Hardest Hit Housing Markets 

(Hardest Hit Fund)

In addition to MHA, OFS operates the Hardest 

Hit Fund, which allows participating HFAs in 

the nation’s hardest hit housing and 

unemployment markets to design innovative, 

locally-targeted foreclosure prevention 

programs.

In fiscal year 2015, state HFAs continued to 

adapt their programs to best meet borrower 

needs in evolving economic and housing 

markets. A total of fifteen HFAs now offer 

principal reduction to induce a loan 

modification, refinance, or recast. In addition, 

Alabama, Tennessee, and South Carolina joined 

Illinois, Indiana, Ohio, and Michigan in 

allocating a portion of their HHF funds to blight 

elimination in an effort to stabilize 

neighborhoods and prevent foreclosures. 

Finally, Florida, Illinois, and North Carolina

now offer Down Payment Assistance Programs, 

making assistance available to moderate-income 

homebuyers in targeted counties that continue 

to demonstrate housing market distress. 

As of September 30, 2015, the 19 HFAs have 

collectively drawn approximately $5.7 billion (75

percent) of the $7.6 billion allocated under the 

program. For fiscal years 2015 and 2014, this 

program has disbursed $1.3 billion and $1.6

billion, respectively. Each state draws down 

funds as they are needed, but must have no 

more than five percent of their allocation on 

hand before they can draw down additional 

funds. States have until December 31, 2017 to 

enter into agreements with borrowers. As of 

September 30, 2015, seven HFAs had stopped 

accepting new applications for assistance in 

anticipation of full commitment of program 

funds: the District of Columbia, Illinois, New 

Jersey, Ohio, Oregon, Rhode Island and 

Tennessee.
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

6 OFS OPERATIONAL GOALS

Each HFA submits a quarterly report on the 

progress of its program. These reports measure 

the states’ performance against metrics set by 

OFS for various aspects of their programs. 

Direct links to each state’s most recent 

performance report can be found at:

http://www.treasury.gov/initiatives/financialstability/TARPPrograms/housing/Pages/ProgramDocuments.aspx

OFS also publishes a Quarterly Performance 

Summary, a companion reference to the HFAs’ 

Quarterly Performance Reports. The Summary 

contains performance data and trends, key 

economic and loan performance indicators, and 

brief program descriptions for each HFA. The 

Quarterly Performance Summary can be found 

at: 

http://www.treasury.gov/initiatives/financialstability/reports/Documents/FINAL%20Q1%202

014%20Hardest%20Hit%20Fund%20Program%2

0Performance%20Summary.pdf

Additional information on the Hardest Hit Fund, 

including details on the program’s purpose, 

overview, and status can be found at the 

following website:

http://www.treasury.gov/initiatives/financialstability/TARPPrograms/housing/hhf/Pages/default.aspx

FHA Refinance Program

On March 26, 2010, FHA and OFS announced 

enhancements to the Federal Housing 

Administration Refinance Program (FHA 

Refinance), designed to make homeownership 

more affordable for borrowers whose homes are 

worth less than the remaining amounts on their 

mortgage loans (negative equity). TARP funds 

were made available by OFS through an $8.0

billion letter of credit facility, in order to fund a 

share of the losses associated with this program

(subsequently reduced to $100 million as of

fiscal year 2015 due to low utilization). As of 

September 30, 2015, FHA has guaranteed 6,639

refinance loans with a total face value of almost 

$955 million, of which, 4,156 loans are subject to 

OFS coverage with a face value of $611 million. 

Operational Goal Three: Minimize 

Cost to Taxpayer

OFS manages TARP investments to minimize 

costs to taxpayers by managing the timely exit of 

these investments to reduce taxpayers’ exposure, 

return TARP funds to reduce the federal debt, 

and continue to replace government assistance 

with private capital in the financial system.

OFS has taken a number of steps during fiscal 

years 2015 and 2014 to dispose of OFS’s 

outstanding investments in a manner that 

balances the desire to exit these investments as 

quickly as practicable with maximizing returns 

on behalf of taxpayers. OFS continues to take 

steps to ensure that TARP recipients comply 

with any TARP-related statutory or contractual 

obligations such as executive compensation 

requirements and restrictions on dividend 

payments.

OFS takes a disciplined portfolio approach –

reviewing each investment and closely 

monitoring risk and performance. In addition to 

repayments by participants, OFS has disposed of 

investments to third parties through public and 

private offerings and auctions with approval 

from regulators. 

Risk Assessment

OFS has developed procedures to identify and 

mitigate investment risk. These procedures are 

designed to identify TARP recipients that face a 

heightened financial risk and determine 

appropriate responses to preserve OFS’s

investment on behalf of taxpayers, while 

maintaining financial stability. Specifically, 

OFS’s external asset managers review publicly 

available information to identify recipients for 

which pre-tax, pre-provision earnings and 
CITIZENS’ REPORT | FISCAL YEAR 2015

OFS OPERATIONAL GOALS 7

capital may be insufficient to offset future losses 

and maintain required capital. For certain 

institutions, OFS and its external asset 

managers engage in heightened monitoring and 

due diligence that reflects the severity and 

timing of the challenges. 

Compliance 

OFS monitors certain TARP-related statutory 

and contractual obligations of remaining TARP 

recipients. Statutory obligations include 

certification and disclosures related to executive 

compensation restrictions. Contractual 

obligations vary by investment type. For most of 

OFS’s preferred stock investments, TARP 

recipients must comply with restrictions on 

payment of dividends and on repurchases of 

junior securities. Recipients of exceptional 

assistance were required to comply with 

additional restrictions on executive 

compensation, lobbying, and corporate expenses. 

Ally Financial was the last such recipient, but is 

no longer subject to these restrictions since 

December 2014.

OFS also performs periodic reviews of the 19 

HFAs participating in the HHF program, to 

evaluate each HFA’s ongoing compliance with 

their contractual agreement with OFS, as well 

as compliance with HHF program terms and 

underwriting requirements.

In addition, all mortgage servicers participating 

in MHA are subject to program guidelines that

require the servicer to offer MHA assistance to 

all eligible borrowers and to have effective

systems, processes, and controls to administer 

the programs. Servicers are subject to periodic, 

on-site compliance reviews performed by OFS’s

compliance agent, Making Home AffordableCompliance (MHA-C), a separate, independent 

division of Freddie Mac, to monitor whether 

servicers’ obligations under MHA requirements 

are being met.

In fiscal year 2011, OFS began publishing 

quarterly assessments for the largest servicers 

that currently comprise approximately 86% of 

the HAMP mortgage servicing. These 

assessments have been used to ensure focus on 

emerging areas of interest, draw servicer 

attention to higher risk areas, and prompt the 

industry to improve its practices. As the 

program has evolved and servicers have 

significantly improved their performance, OFS 

has updated the assessment to ensure it 

includes metrics that address current areas of 

interest and concern. 

Beginning with the second quarter 2015, OFS 

transitioned to the third iteration of quarterly 

assessments which rely on enhanced loan file 

review testing. The updated assessment

provides additional insight into the impact of 

servicer performance on the borrower experience 

and fosters further improvement in servicer 

performance by tightening performance 

benchmarks. 

Operational Goal Four: Continue to 

Operate with the Highest Standards 

of Transparency, Accountability, and 

Integrity

To protect taxpayers and help ensure that every 

dollar is directed toward promoting financial 

stability, OFS established comprehensive 

accountability and transparency measures. OFS 

is committed to operating its investment and 

housing programs in full view of the public. This 

includes providing regular and comprehensive 

information about how TARP funds are being 

spent, who has received them and on what 

terms, and how much has been collected to date. 

All of this information, along with numerous 

reports of different frequencies, is posted in the 

Financial Stability section of the Treasury.gov 

website, which can be found at: 

http://www.treasury.gov/initiatives/financialstability/reports/Pages/default.aspx
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

8 OFS OPERATIONAL GOALS

These reports include: 

 A Monthly TARP Update (formerly the 

Daily TARP Update) that features 

detailed financial data related to each 

TARP investment program, including 

the status of disbursements and all 

collections by category;

 A monthly report to Congress that 

details how TARP funds have been used, 

the status of recovery of such funds by 

program, and information on the 

estimated cost of TARP;

 A monthly report on dividend and 

interest payments;

 A quarterly report on Making Home 

Affordable; 

 A report of each transaction (such as an 

investment or repayment) within two 

business days of each transaction;

 A quarterly report on the Hardest Hit 

Fund; and

 A quarterly report to Congress on 

administrative expense activities.

In addition, OFS regularly publishes data files 

related to MHA and transaction reports that 

show activity related to MHA and HHF. The 

release of the data file fulfills a requirement 

within the Dodd-Frank Act to make available 

loan-level data about the program. OFS updates

the file monthly. Researchers interested in 

using the MHA Data File can access the file and 

user guide at: 

http://www.treasury.gov/initiatives/financialstability/reports/Pages/mha_publicfile.aspx

Audited Financial Statements 

OFS prepares separate financial statements for 

TARP on an annual basis. This is the seventh

OFS Agency Financial Report (AFR), which 

includes the audited financial statements for the 

fiscal years ended September 30, 2015 and 

September 30, 2014. Additional reports for prior 

periods are available at: 

http://www.treasury.gov/initiatives/financialstability/reports/Pages/Annual-AgencyFinancial-Reports.aspx

In its seven years of operation, TARP’s financial 

statements have received seven unmodified 

audit opinions from its auditor, the GAO.

TARP Tracker

During fiscal year 2013, OFS launched an 

expanded version of its existing TARP Tracker, 

which is an online, interactive tool that allows 

users to track the flow of TARP funds in greater 

detail over the lifetime of each individual TARP 

investment area. The expanded capability 

allows users to view each investment area 

separately to get a clearer sense of what has 

occurred in a particular program, including a 

scroll of events, major transactions, and 

legislative actions that have impacted the 

program.

Readers are invited to refer to these documents 

at: http://www.treasury.gov/initiatives/financialstability/reports/Pages/default.aspx

Oversight by Three Separate Agencies

OFS activities are currently reviewed by three 

oversight entities:

 The Financial Stability Oversight Board, 

established by EESA Section 104;

 Specific responsibilities for the GAO as 

set out in EESA Section 116;

 The Special Inspector General for TARP, 

established by EESA Section 121.

OFS has productive working relationships with 

all of these bodies, and cooperates with each 

oversight agency’s effort to produce periodic 

audits and reports that focus on the many 

aspects of TARP. Individually and collectively, 

the oversight bodies’ audits and reports have 

made and continue to make important 
CITIZENS’ REPORT | FISCAL YEAR 2015

OFS OPERATIONAL GOALS 9

contributions to the development, strengthening, 

and transparency of TARP programs.

Congressional Hearings and Testimony

OFS officials have testified in numerous 

Congressional hearings since TARP was created. 

Copies of their written testimony are available 

at: 

http://www.treasury.gov/initiatives/financialstability/news-room/Pages/default.aspx
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

10 OFS FINANCIAL PERFORMANCE

Fiscal Year 2015 and 2014 Financial Summary and Cumulative Net 

Income

OFS’s fiscal year 2015 net cost of operations of 

$4.4 billion includes the reported net income 

related to TARP investment and FHA-Refinance 

programs, as well as expenses for the Treasury 

housing programs under TARP and 

administrative expenses. For the fiscal year 

ended September 30, 2015, OFS reported net 

subsidy income for 6 programs – [CPP, CDCI, 

PPIP, TALF, AIFP, and FHA-Refinance]. These 

programs collectively reported net subsidy 

income of $0.2 billion. Fiscal year 2015 expenses 

for the Treasury housing programs under TARP 

are $4.5 billion and administrative costs are 

$146 million. For the fiscal year ended 

September 30, 2014, the net cost of operations 

was $3.0 billion. These net cost amounts

reported in the financial statements reflect only 

transactions through September 30, 2015 and 

September 30, 2014, respectively, and therefore 

are different than lifetime cost estimates made 

for budgetary purposes. Over time the cost of 

TARP programs will change. As described later 

in the OFS audited financial statements, these 

estimates are based in part on currently 

projected economic factors. These economic 

factors will likely change, either increasing or 

decreasing the lifetime cost of TARP.

TARP Program Summary

Table 1 provides a financial summary for TARP 

programs since its inception on October 3, 2008, 

through September 30, 2015. For each program, 

the table provides utilized TARP authority 

(which includes purchases made, legal 

commitments to make future purchases, and 

offsets for guarantees made), the amount 

actually disbursed, repayments to OFS from 

program participants or from sales of the 

investments, write-offs and losses, net 

outstanding balance as of September 30, 2015, 

and cash inflows on the investments in the form 

of dividends, interest or other fees. 
CITIZENS’ REPORT | FISCAL YEAR 2015

OFS FINANCIAL PERFORMANCE 11

Table 1: TARP Summary1

From TARP Inception through September 30, 2015

(Dollars in millions)

Purchase 

Price or 

Guarantee 

Amounts

Total $ 

Disbursed

Investment 

Repayments

Write-offs 

and Losses6

Outstanding 

Balance7

Received 

from 

Investments

Bank Support Programs 

Capital Purchase Program2 $ 204,895 $ 204,895 $ (199,560)5 $ (5,067) $ 268 $ 27,080 

Targeted Investment 

Program 40,000 40,000 (40,000) 0 0 4,432 

Asset Guarantee Program 5,000 - - - - 4,126 

Community Development 

Capital Initiative 570 570 (117) (7) 446 52 

Credit Market Programs 

Public Private Investment 

Program 18,625 18,625 (18,625) 0 0 3,852 

Term Asset-Backed 

Securities Loan Facility 100 100 (100) 0 0 685 

SBA 7(a) Securities 

Purchase Program 367 367 (363) (4) 0 13 

Other Programs 

Automotive Industry 

Financing Program 79,692 79,692 (63,037) (16,655) 0 7,502 

American International

Group Investment 

Program3

 67,835 67,835 (54,350) (13,485) 0 959 

Sub-total for Investment 

Programs 

 417,085 412,085 (376,153) (35,218) 714 48,700 

Treasury Housing 

Programs under TARP 37,5074

 17,991 N/A N/A N/A - 

Total for TARP Program $ 454,591 $ 430,075 $ (376,153) $ (35,218) $ 714 $ 48,700 

1 This table shows TARP activity for the period from inception through September 30, 2015, on a cash basis. Received 

from investments includes dividends and interest income reported in the Statement of Net Cost, and Proceeds from sale 

and repurchases of assets in excess of costs.

2 OFS received $31.9 billion in proceeds from sales of Citigroup common stock, of which $25.0 billion is included at cost 

in investment repayments, and $6.9 billion of net proceeds in excess of cost is included in Received from Investments.

3 The amounts for AIG reflect only the operations of TARP and do not reflect proceeds received from the sale of shares of 

AIG common stock held by Treasury outside of TARP (additional Treasury shares). 

4 Individual obligation amounts are $29.8 billion for the Making Home Affordable Program, $7.6 billion for the Hardest 

Hit Fund, and $125 million committed for the FHA-Refinance Program.

5 Includes $2.2 billion of SBLF refinancing outside of TARP and CDCI exchanges from CPP of $363 million.

6 Losses represent proceeds less than cost on sales of assets, which are reflected in the financial statements within “net 

proceeds from sales and repurchases of assets in excess of (less than) cost”.

7 Total disbursements less repayments, write-offs and losses do not equal the total outstanding balance because the 

disbursements for the Treasury housing programs under TARP do not require (and OFS does not expect) repayments.
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

12 OFS FINANCIAL PERFORMANCE

Most TARP funds were used to make 

investments in preferred stock or to make loans. 

OFS has generally received dividends on the 

preferred stock and interest payments on the 

loans from the institutions participating in 

TARP programs. These payments represent 

additional proceeds received on OFS’s TARP 

investments. From inception through 

September 30, 2015 OFS received a total of 

$24.5 billion in dividends and interest. 

OFS has conducted several sales of its 

investments in banking institutions as part of its 

exit strategy for winding down TARP. OFS 

plans to continue to sell its investments in banks 

that are not expected to repay OFS in the 

foreseeable future. These sales are being 

conducted over time and in stages and include 

both common and preferred stock and 

debentures. During fiscal years 2015 and 2014, 

OFS sold its investments in 8 and 31 banks for 

combined principal receipts of $49 million and

$263 million, respectively, through individual 

private auctions. These auctions resulted in net

proceeds less than cost of $32 million and $73

million for those investments during fiscal years 

2015 and 2014, respectively.

OFS also received warrants in connection with 

most of its investments, which provides an 

opportunity for OFS on behalf of taxpayers to 

realize additional proceeds on investments. 

Since the program’s inception, through 

September 30, 2015, OFS has received $9.6

billion in gross proceeds from the disposition of 

warrants associated with 241 investments in 

CPP, TIP, AGP, and AIG, consisting of (i) $4.0

billion from issuer repurchases at agreed upon 

values and (ii) $5.6 billion from auctions. 

Summary of TARP Equity 

Investments

Table 2 provides information on the estimated 

values of TARP investment programs, as of the 

end of fiscal years 2015 and 2014. OFS housing 

programs under TARP are excluded from the 

chart because no repayments are expected. The 

Outstanding Balance column represents the 

amounts disbursed by OFS relating to the loans 

and equity investments that were outstanding 

as of September 30, 2015 and 2014. The 

Estimated Value of the Investment column 

represents the present value of net cash inflows 

that OFS estimates it will receive from the 

programs. These estimates include market risk 

assumptions. For equity investments, this 

amount represents fair value. The total 

difference of $232 million (2015) and $679

million (2014) between the two columns is 

considered the “subsidy cost allowance” under 

the Federal Credit Reform Act methods OFS 

follows for budget and accounting purposes.
CITIZENS’ REPORT | FISCAL YEAR 2015

OFS FINANCIAL PERFORMANCE 13

Table 2: Summary of TARP Equity Investments 

(Dollars in millions)

Program 

Outstanding 

Balance as of 

September 

30, 20151 

Estimated Value 

of Investment as 

of September 30, 

2015 

Outstanding 

Balance as of 

September 30, 

20141 

Estimated 

Value of 

Investment as 

of September 

30, 2014 

Bank Support Programs 

Capital Purchase Program $ 268 $ 99 $ 625 $ 281 

Community Development 

Capital Initiative 446 383 465 410 

Credit Market Programs 

Public Private Investment 

Program 0 0 0 0

Term Asset-Backed Securities 

Loan Facility 0 0 0 0

SBA 7(a) Securities Purchase 

Program 0 0 0 0

Other Programs 

Automotive Industry Financing 

Program 0 0 1,763 1,483

American International Group 

Investment Program 0 0 0 0

Total $ 714 $ 482 $ 2,853 $ 2,174 

1 Before subsidy cost allowance.

The ultimate cost of TARP will not be known for 

some time, but it is not expected to change 

significantly as only a few investment programs 

remain open with many of the original disbursed 

investments repaid. The financial performance 

of the remaining programs will depend on many 

factors, such as future economic and financial 

conditions and the business prospects of specific 

institutions. The cost estimates are sensitive to 

slight changes in model assumptions, such as 

general economic conditions, specific stock price 

volatility of the entities in which OFS has an 

equity interest, estimates of expected defaults, 

and prepayments. Wherever possible, OFS uses 

market prices of tradable securities to estimate 

the fair value of TARP investments. Use of 

market prices is possible for TARP investments 

that trade in public markets or are closely 

related to tradable securities. For those TARP 

investments that do not have direct analogs in 

private markets, OFS uses internal marketbased models to estimate the market value of 

these investments. All future cash flows are 

adjusted for market risk.
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

14 OFS FINANCIAL PERFORMANCE

Comparison of Estimated Lifetime 

TARP Costs over Time

Market conditions and the performance of 

specific financial institutions are critical 

determinants of TARP’s estimated lifetime 

cost. The changes in OFS estimates since 

TARP’s inception through September 30, 

2015, provide a good illustration of this 

impact. Table 3 provides information on how 

OFS’s estimated lifetime cost of TARP has 

changed over time. The cost estimates for the 

non-housing programs have fluctuated in 

large part due to changes in the market prices 

of common stock for AIG, GM and Ally. This 

table assumes that all expected investments 

and disbursements for Treasury housing 

programs under TARP are completed, and 

adhere to general government budgeting 

guidance. Table 3 is consistent with the 

estimated TARP lifetime cost disclosures on 

the OFS website at:

http://www.treasury.gov/initiatives/financialstability/Pages/default.aspx

The cost amounts in Table 3 are based on 

assumptions regarding future events, which 

are inherently uncertain.

Table 3: Estimated Lifetime TARP Costs (Income)1 

(Dollars in billions) 

 Estimated Lifetime Cost (Income) as of September 30 

Program 2009 5 2010 2011 2012 2013 2014 2015 

Bank Support Programs 

Capital Purchase Program ($14.6) ($11.2) ($13.0) ($14.9) ($16.1) ($16.1) ($16.3)

Targeted Investment Program (1.9) (3.8) (4.0) (4.0) (4.0) (4.0) (4.0)

Asset Guarantee Program2(2.2) (3.7) (3.7) (3.9) (4.0) (4.0) (4.0)

Community Development 

Capital Initiative 0.4 0.3 0.2 0.2 0.1 0.1 0.1 

Credit Market Programs 

Public Private Investment 

Program 1.4 (0.7) (2.4) (2.4) (2.7) (2.7) (2.7)

Term Asset-Backed Securities 

Loan Facility (0.3) (0.4) (0.4) (0.5) (0.6) (0.6) (0.6)

SBA 7(a) Securities Purchase 

Program N/A 0.0 0.0 0.0 0.0 0.0 0.0

Other Programs 

Automotive Industry 

Financing Program 34.5 14.7 23.6 24.3 14.7 12.2 12.1

American International Group 

Investment Program3

56.8 36.9 24.3 15.3 15.2 15.2 15.2 

Subtotal 74.1 32.1 24.6 14.1 2.6 0.1 (0.2)

Treasury Housing Programs 

under TARP4

50.0 45.6 45.6 45.6 37.7 37.4 37.4 

Total $124.1 $77.7 $70.2 $59.7 $40.3 $37.5 $37.2 

1 Estimated program costs (+) or savings (in parentheses) over the life of the program, including interest on reestimates and excluding administrative costs.

2 Prior to the termination of the guarantee agreement, OFS guaranteed up to $5.0 billion of potential losses on a $301.0 billion portfolio of loans.

3 The amounts for AIG reflect only the operations of TARP and do not reflect proceeds received from the sale of shares of AIG common stock held by Treasury outside 

of TARP (additional Treasury shares). 

4 The estimated lifetime cost for Treasury Housing Programs under TARP represent the total commitment except for the FHA Refinance Program, which is accounted 

for under credit reform. The estimated lifetime cost of the FHA Refinance Program represents the total estimated subsidy cost associated with total obligated amount.

5 Estimated lifetime cost for 2009 includes funds for projected disbursements and anticipated obligations.
CITIZENS’ REPORT | FISCAL YEAR 2015

APPENDIX A: TARP GLOSSARY 15

Appendix A: TARP Glossary

 

Asset-Backed Security (ABS): A financial 

instrument representing an interest in a pool 

of other assets, typically consumer loans. 

Most ABS are backed by credit card 

receivables, auto loans, student loans, or other 

loan and lease obligations.

 

Asset Guarantee Program (AGP): A TARP 

program under which OFS, together with the 

Federal Reserve and the FDIC, agreed to 

share losses on certain pools of assets held by 

systemically significant financial institutions 

that faced a high risk of losing market 

confidence due in large part to a portfolio of 

distressed or illiquid assets.

Automotive Industry Financing Program 

(AIFP): A TARP program under which OFS 

provided loans or equity investments in order 

to avoid a disorderly bankruptcy of one or 

more auto companies that would have posed a 

systemic risk to the country’s financial 

system.

Capital Purchase Program (CPP): A TARP 

program pursuant to which OFS invested in 

preferred equity securities and other 

securities issued by financial institutions.

Commercial Mortgage-Backed Securities 

(CMBS): A financial instrument representing 

an interest in a commercial real estate 

mortgage or a group of commercial real estate 

mortgages.

Community Development Capital Initiative 

(CDCI): A TARP program that provides lowcost capital to Community Development 

Financial Institutions to encourage lending to 

small businesses and help facilitate the flow of 

credit to individuals in underserved 

communities.

 

Community Development Financial 

Institution (CDFI): A financial institution 

that focuses on providing financial services to 

low- and moderate- income, minority and 

other underserved communities, and is 

certified by the CDFI Fund, an office within 

OFS that promotes economic revitalization 

and community development.

 

Emergency Economic Stabilization Act

(EESA): The law that created the Troubled 

Asset Relief Program (TARP).

Government-Sponsored Enterprises (GSEs): 

Private corporations created by the U.S. 

Government. Fannie Mae and Freddie Mac 

are GSEs.

Home Affordable Modification Program 

(HAMP): A TARP program OFS established 

to help responsible but struggling 

homeowners reduce their mortgage payments 

to affordable levels and avoid foreclosure.

 

Legacy Securities: CMBS and non-agency 

RMBS issued prior to 2009 that were 

originally rated AAA or an equivalent rating 

by two or more nationally recognized 

statistical rating organizations without 

ratings enhancement and that are secured 

directly by actual mortgage loans, leases or 

other assets and not other securities.

Making Home Affordable (MHA): A 

comprehensive plan to stabilize the U.S. 

housing market and help responsible, but 

struggling, homeowners reduce their monthly 

mortgage payments to more affordable levels 

and avoid foreclosure. HAMP is part of MHA.

 

Mortgage-Backed Securities (MBS): A type of 

ABS representing an interest in a pool of 

similar mortgages bundled together by a 

financial institution.

 

Non-Agency Residential Mortgage-Backed 

Securities: RMBS that are not guaranteed or 

issued by Freddie Mac, Fannie Mae, any other 

GSE, Ginnie Mae, or a U.S. federal 

government agency.
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

16 APPENDIX A: TARP GLOSSARY

Preferred Stock: Equity ownership that 

usually pays a fixed dividend and gives the 

holder a claim on corporate earnings superior 

to common stock owners. Preferred stock also 

has priority in the distribution of assets in the 

case of liquidation of a bankrupt company.

Public-Private Investment Fund (PPIF): An 

investment fund established to purchase 

Legacy Securities from financial institutions 

under PPIP.

 

Public-Private Investment Program (PPIP): A 

TARP program designed to support the 

secondary market in mortgage-backed 

securities. The program is designed to 

increase the flow of credit throughout the 

economy by partnering with private investors 

to purchase Legacy Securities from financial 

institutions.

Residential Mortgage-Backed Securities 

(RMBS): A financial instrument representing 

an interest in a group of residential real estate 

mortgages.

 

SBA: U.S. Small Business Administration.

SBA 7(a) Securities Purchase Program: A 

TARP program under which OFS purchased 

securities backed by the guaranteed portions 

of the SBA 7(a) loans.

 

Servicer: An administrative third party that 

collects mortgage payments, handles tax and 

insurance escrows, and may even bring 

foreclosure proceedings on past due mortgages 

for institutional loan owners or originators. 

The loan servicer also generates reports for 

borrowers and mortgage owners on the 

collections. 

 

Targeted Investment Program (TIP): A TARP 

program created to stabilize the financial 

system by making investments in institutions 

that are critical to the functioning of the 

financial system.

Term Asset-Backed Securities Loan Facility 

(TALF): A program under which the Federal 

Reserve Bank of New York made term nonrecourse loans to buyers of AAA-rated AssetBacked Securities in order to stimulate 

consumer and business lending. 

 

Troubled Asset Relief Program (TARP): The 

Troubled Asset Relief Program, which was 

established under EESA to stabilize the 

financial system and help prevent a systemic 

collapse.

Warrant: A financial instrument that 

represents the right, but not the obligation, to 

purchase a certain number of shares of 

common stock of a company at a fixed price.
Office of Financial Stability

Contact information:

Department of the Treasury – Office of Financial Stability

1500 Pennsylvania Avenue NW

Washington, DC 20220

Telephone 202-622-2000 - Treasury Press Office 202-622-2960

Websites:

www.FinancialStability.gov

www.MAKINGHOMEAFFORDABLE.gov

Additional References:

Monthly Reports to Congress

http://www.treasury.gov/initiatives/financial-stability/reports/Pages/Monthly-Report-to-Congress.aspx

The Financial Crisis Response in Charts – April 2012

http://www.treasury.gov/resource-center/data-chart-center/Documents/20120413_FinancialCrisisResponse.pdf.

Anniversary Reports 

http://www.treasury.gov/initiatives/financial-stability/reports/Pages/TARP-Annual-Retrospectives.aspx

Agency Financial Reports, including 2015, 2014, 2013, 2012, 2011, 2010 and 2009:

http://www.treasury.gov/initiatives/financial-stability/reports/Pages/Annual-Agency-Financial-Reports.aspx

Housing Scorecard:

http://portal.hud.gov/hudportal/HUD?src=/initiatives/Housing_Scorecard 

Making Home Affordable Monthly Reports:

http://www.treasury.gov/initiatives/financial-stability/reports/Pages/Making-Home-Affordable-ProgramPerformance-Report.aspx
www.financialstability.gov