The Department of the Treasury

CITIZENS’ REPORT

Office of Financial Stability – Troubled Asset Relief Program

Fiscal year 2014
2013 CERTIFICATE OF EXCELLENCE
CITIZENS’ REPORT | FISCAL YEAR 2014

TABLE OF CONTENTS iii

Table of Contents

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

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

Background........................................................................................................................................................................ 1

OFS Organization Structure......................................................................................................................................... 1

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

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

Capital Purchase Program.................................................................................................................................... 2

Community Development Capital Initiative ................................................................................................. 3

Public Private Investment Program................................................................................................................. 4

Term Asset-Backed Securities Loan Facility ................................................................................................ 4

Automotive Industry Financing Program...................................................................................................... 5

American International Group (AIG) Investment Program ................................................................... 6

Operational Goal Two: Continue Helping Families in Need to Avoid Foreclosure............................... 7

Operational Goal Three: Minimize Cost to Taxpayer........................................................................................ 9

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

Accountability, and Integrity ....................................................................................................................................10

Fiscal Year 2014 and 2013 Financial Summary and Cumulative Net Income......................................12

Appendix A: TARP Glossary ......................................................................................................................................17

WEBSITES.........................................................................................................................................................................19
TABLE OF CONTENTS iv
CITIZENS’ REPORT | FISCAL YEAR 2014

MESSAGE FROM THE DEPUTY ASSISTANT SECRETARY FOR FINANCIAL STABILITY v

MESSAGE FROM THE DEPUTY ASSISTANT SECRETARY FOR 

FINANCIAL STABILITY

December 16, 2014

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

Report for the Fiscal Year 2014. This report describes our financial and 

performance results for the sixth year of the Troubled Asset Relief Program 

(TARP). The Emergency Economic Stabilization Act (EESA) of 2008 

established OFS within the Office of Domestic Finance at the Department of 

the Treasury (Treasury) to implement 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, 

2014, 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 $275.0 billion (including $1.7 billion 

collected in fiscal year 2014) for all TARP bank support programs through repayments, sales, 

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

30, 2014, $1.1 billion 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 substantially 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 SBA 7(a) Securities Purchase Program. As of the end of fiscal year 2014, OFS collected 

$23.6 billion as compared to $19.1 billion of disbursements under these programs.

• Auto Industry Financing Program. As of September, 30 2014, OFS collected $68.9 billion 

through sales, repayments, dividends, interest, and other income, compared to the $79.7

billion in funds that were disbursed under the Automotive Industry Financing Program 

(AIFP). Chrysler exited the program in July 2011 and the wind-down of the General Motors 

(GM) stake was completed in December 2013. In November 2013, OFS received a repayment 

of $5.9 billion from Ally Financial Inc. (Ally) under an agreement announced in August 2013.
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

vi MESSAGE FROM THE DEPUTY ASSISTANT SECRETARY FOR FINANCIAL STABILITY

In January 2014, OFS collected $3.0 billion from a sale of Ally stock to private investors. The 

company executed a successful initial public offering in April 2014, which brought in $2.4

billion in proceeds on behalf of taxpayers, plus $181 million associated with the overallotment option that was exercised in May 2014. OFS has since begun selling its remaining 

stake through a series of pre-defined written trading plans. As of September 30, 2014, OFS 

collected approximately $18.1 billion on the Ally investment, roughly $923 million more than 

the original $17.2 billion investment.

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

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

assistance provided by OFS and the Federal Reserve to prevent the collapse of AIG totaled 

$182.3 billion, a part of which was later cancelled. 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 has been 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 the TARP Housing Programs to help millions of struggling homeowners avoid foreclosure, 

primarily through mortgage modifications and other forms of assistance. These programs have also 

set new mortgage modification and consumer protection standards which have helped to transform 

the mortgage servicing industry and thereby helped millions more families. On June 26, 2014, the 

Obama Administration announced the extension of the application deadline for the Making Home 

Affordable Program through at least December 2016 in order to provide struggling homeowners 

additional time to access sustainable mortgage relief.

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

consecutive year, OFS has earned unmodified opinions on its financial statements and its internal 

control over financial reporting from the GAO. In 2014, OFS was also awarded its fifth consecutive 

Certificate of Excellence in Accountability Reporting by the Association of Government Accountants.

Sincerely, 

Timothy J. Bowler

Deputy Assistant Secretary for Financial Stability
CITIZENS’ REPORT | FISCAL YEAR 2014

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 pursuant to the 

Emergency Economic Stabilization Act (EESA) 

on October 3, 2008. 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 

five major organizations the: Office of the Chief 

Investment Officer, Office of Finance and 

Operations, Office of the Chief of Home 

Ownership Preservation, Office of Financial 

Agents, and Office of the Chief Compliance 

Officer. A Chief Counsel’s Office also reports to 

the Deputy Assistant Secretary and to the Office 

of the General Counsel in the Department of the 

Treasury.

OFS is not envisioned as a permanent 

organization, so to the maximum extent possible 

when economically efficient and appropriate, 

OFS utilizes private sector expertise in support 

of 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.

The OFS organization chart follows:

Deputy Assistant Secretary for 

Financial Stability

Office of the 

Chief 

Investment 

Officer

Office of 

Financial 

Agents

Office of the 

Chief of 

Home 

Ownership 

Preservation 

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 to promote 

domestic economic growth and stability while 

continuing reforms of the financial system. The 

following discussion of OFS operational goals 

focuses on the active programs and significant 

events that occurred during fiscal years 2014

and 2013. 

Operational Goal One: Complete the 

Wind-down of the Investment 

Programs

Banking Support Programs

By late September 2008, several major financial 

institutions had already failed. Many others 

were at risk of failure and people were rapidly 

losing confidence in the nation’s financial system 

as a whole. Therefore beginning in early 

October 2008, OFS launched five bank support 

programs to help stabilize the nation’s banking 

institutions, disbursing a total of $245.5 billion 

in investments. As of September 30, 2014, OFS 

has collected more than $275.0 billion through 

repayments, dividends, interest, warrant sales, 

and other income, representing $29.5 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. 

Two bank programs remained active in fiscal 

year 2014, and are discussed in greater detail 

below. Historical information on the completed 

bank programs can be found at:

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

Capital Purchase Program

The Capital Purchase Program (CPP) was 

launched in October 2008 to help stabilize the 

financial system by providing capital to viable 

financial institutions of all sizes throughout the 

nation. Based on market indicators at the time, 

it was clear that financial institutions needed 

additional capital to absorb losses and restart 

the flow of credit.

With the additional capital, CPP participants 

were better equipped to undertake new lending 

and continue to provide other services to 

consumers and businesses, even while absorbing 

write-downs and charge-offs on non–performing

assets. OFS received preferred stock or debt 

securities in exchange for the CPP investments. 

Most financial institutions participating in the 

CPP initially paid OFS a five percent dividend 

on preferred shares for the first five years and a 

nine percent rate thereafter.

In addition, OFS received warrants to purchase

common shares or other securities from the 

banks at the time of the CPP investment. The 

purpose of the additional securities was to 

enable OFS to receive additional returns on its 

investments as banks recovered. Participating 

financial institutions may repay the funds they 

received at any time, so long as they have the 

approval of their regulators.

Under this program, OFS provided capital to 

707 financial institutions in 48 states, Puerto 

Rico, and DC, including more than 450 small 

and community banks and 22 CDFIs. The 

largest investment was $25.0 billion and the 

smallest was $301,000. 

In fiscal year 2014, OFS continued to make

substantial progress winding down the CPP 

according to the three-pronged exit strategy 

announced in May 2012. Each dollar collected 

from CPP participants now represents an 
CITIZENS’ REPORT | FISCAL YEAR 2014

OFS OPERATIONAL GOALS 3

additional positive return on behalf of taxpayers. 

From inception of the program through 

September 30, 2014, OFS has received $199.4

billion in CPP repayments/sales, along with 

$12.1 billion in dividends and interest, and $14.9

billion of proceeds in excess of cost totaling 

$226.4 billion. As of September 30, 2014, $625

million in CPP gross investments remained 

outstanding.

Throughout fiscal year 2014, OFS continued to 

implement the CPP exit strategy by periodically 

selling preferred stock and subordinated debt in 

CPP participants through private auctions. OFS 

held six auctions with combined proceeds of 

$289 million during fiscal year 2014 compared to 

14 auctions with $1.5 billion in proceeds in fiscal 

year 2013. During fiscal year 2014 and 2013, 62 

and 173 investments were repaid or sold for a 

total of $1.5 billion and $4.8 billion, respectively. 

OFS has also followed a policy of disposing of 

warrants as soon as practicable if no agreement 

is reached on a repurchase. As of September 30, 

2014, OFS has collected $8.0 billion in net 

proceeds from the sale of warrants since 

inception. 

Another component of OFS’s exit strategy for the 

CPP is to restructure certain investments in 

limited cases when the terms result in the best 

return for taxpayers. 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. OFS agrees to receive cash 

(sometimes at a discount to the original par 

value of the investment) or other securities, 

which can be more easily sold. 

Additional information on the CPP, including 

details on the programs 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

Community Development Capital Initiative

OFS created the Community Development 

Capital Initiative (CDCI) on February 3, 2010, to 

help viable certified Community Development 

Financial Institutions (CDFIs) and the 

communities they serve cope with effects of the 

financial crisis. It was put in place to help keep 

day-to-day financing available to families and 

businesses in hard-hit communities that are 

underserved by traditional banks. 

Unlike the CPP, OFS did not take substantial 

actions during fiscal year 2014 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 

2014 and 2013, OFS collected a total of $20

million and $97 million, respectively, in 

repayments, dividends and interest from 

institutions in the CDCI program. As of 

September 30, 2014, $465 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
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

4 OFS OPERATIONAL GOALS

Credit Market Programs

As the financial crisis reached its peak, banks 

were not making new loans to businesses, or 

even to one another. As a result, many 

businesses could not get loans for 

new investments, municipalities and state 

governments could not issue bonds at reasonable

rates, and families could not get credit. The 

securitization markets—which provide financing 

for credit cards, student loans, auto loans, and 

other consumer loans as well as small business 

loans—had basically stopped functioning.

OFS launched three programs in 2009 to help 

unfreeze these markets and bring down the cost 

of borrowing for families and businesses. 

Although the specific goals and implementation 

methods of each program differed, the overall 

goal of these three programs was the same—to 

restart the flow of credit to meet the critical 

needs of small businesses and consumers. OFS 

has now substantially 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, 2014. 

Public Private Investment Program

OFS launched the Legacy Securities PublicPrivate Investment Program (PPIP) in March 

2009 to help restart the market for non-agency 

residential mortgage-backed securities (RMBS) 

and commercial mortgage-backed securities 

(CMBS), thereby allowing banks and other 

financial institutions to re-deploy capital and 

extend new credit to households and businesses. 

The purpose of PPIP was to draw new private 

capital into the market for legacy RMBS and 

CMBS by providing financing on attractive 

terms as well as a matching equity investment 

from OFS. Using up to $22.1 billion of TARP 

funds alongside equity capital raised from 

private investors, PPIP was designed to 

generate significant purchasing power and 

demand for troubled RMBS and CMBS. This in 

turn would help to increase the amount of credit 

available to consumers and small businesses.

OFS completed the wind-down of the PPIP

during fiscal year 2013, with no debt or equity 

investments outstanding after the final 

outstanding equity repayment was made in June 

2013. During fiscal year 2014, OFS received 

termination notices from five Public Private 

Investment Funds (PPIFs), leaving only 1 of the 

original 9 PPIFs in the process of winding down 

as of September 30, 2014. From inception of the 

program through September 30, 2014, 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, with all 

future PPIP payments providing additional 

profit to OFS.

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

The Term Asset-Backed Securities Loan Facility 

(TALF) was a joint OFS-Federal Reserve 

program that was designed to restart the assetbacked securities (ABS) and commercial 

mortgage-backed securities (CMBS) markets 

that had ground to a virtual standstill during 

the early months of the financial crisis. Under 

the TALF, the Federal Reserve Bank of New 

York (FRBNY) provided non-recourse funding to 

any qualified borrower that owned eligible 

collateral.

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 

FRBNY. After subsequent reductions in OFS’s 

commitments in 2013, the commitment was 
CITIZENS’ REPORT | FISCAL YEAR 2014

OFS OPERATIONAL GOALS 5

$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, 2014, the balance 

of outstanding TALF loans provided by FRBNY 

had declined to $14 million from $101 million on 

September 30, 2013, due to scheduled and 

voluntary prepayments by borrowers. All loans 

that have not been repaid-in-full are current in 

their payments of principal and interest and are 

fully collateralized by the residual balance held 

by the TALF, LLC. As of September 30, 2014, 

accumulated income earned from investments in 

TALF, LLC totaled $645 million, all of which 

occurred during fiscal years 2014 and 2013. 

Additional information on TALF, including 

details on the programs 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

The Automotive Industry Financing Program 

(AIFP) was launched in December 2008 to help 

prevent the disorderly liquidations of General 

Motors (GM) and Chrysler, and thus significant 

disruption of the U.S. auto industry. The 

potential for such a disruption at that time 

posed a significant risk to financial market 

stability and threatened the overall economy. 

Recognizing that both GM and Chrysler were on 

the verge of collapse, OFS extended loans to both 

companies and their financing entities.

In 2009, OFS agreed to provide additional funds 

conditioned on each company and its 

stakeholders participating in a fundamental 

restructuring. In total, OFS disbursed $79.7 

billion in loans and equity investments to GM, 

Chrysler, and General Motors Acceptance 

Corporation (now known as Ally Financial). As 

a result, General Motors Company (New GM), 

Chrysler Group LLC (New Chrysler), and Ally 

are more competitive and viable companies, 

supporting American jobs and the economy. 

Operating results have improved, the industry 

added jobs, and TARP investments have largely 

been repaid.

OFS continued to make substantial progress in 

the wind-down of the AIFP during fiscal year 

2014, including the exit from its investment in 

GM. As of September 30, 2014, OFS has 

collected $68.9 billion through sales, 

repayments, dividends and interest under this 

program.

OFS disbursed a total of $12.4 billion to 

Chrysler related entities including Old Chrysler 

and New Chrysler. During fiscal year 2011, 

OFS fully exited its loans and investment 

relating to Chrysler entities, six years ahead of 

the scheduled maturity of its loans. Of the $12.4 

billion that was disbursed to Chrysler related 

entities under TARP, OFS collected more than 

$11.1 billion through principal repayments, sale 

of investments, and interest. While OFS retains 

a right to receive proceeds from a liquidation 

trust, no significant future cashflows are 

expected. 

In December 2013, OFS fully exited its 

investment in GM, completing the disposition of 

its remaining shares of GM common stock. The 

total amount collected for fiscal year 2014 was 

$3.8 billion, raising to $39.7 billion the total 

collected by Treasury from its original GM 

investment (excludes $884 million loan to GM 

which was converted to GMAC common stock).

OFS invested $17.2 billion ($16.3 billion in 

initial GMAC investments and $884 million loan 

to Old GM which was converted to GMAC stock)

in Ally Financial (Ally) under TARP. As of 

September 30, 2014, OFS’s outstanding 

investment in Ally stood at $1.8 billion. During 

fiscal year 2014, Ally completed the two 

strategic initiatives OFS previously said were 

critical to maximize recovery of the investment 

– the Chapter 11 proceeding of Ally’s mortgage 

subsidiary, Residential Capital LLC (“ResCap”), 
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

6 OFS OPERATIONAL GOALS

to address Ally’s legacy mortgage liabilities and 

the sale of its international auto finance 

operations. During fiscal year 2013, Ally, 

ResCap, and ResCap’s major creditors agreed on 

terms for a plan of reorganization and the 

settlement of certain claims against Ally. In 

December 2013, the bankruptcy court approved 

ResCap’s final plan to liquidate and exit 

bankruptcy, thus allowing Ally to cut its ties to 

ResCap. Ally also has sold or entered into 

agreements to sell all of its international auto 

finance operations for a total of $9.2 billion. All 

related transactions have closed with the 

exception of one joint venture that is awaiting a 

foreign government’s regulatory approval. 

On August 19, 2013, Ally entered into private 

placement agreements with investors of Ally 

common stock for an aggregate price of $1.0 

billion (later increased to $1.3 billion in 

November 2013). Concurrently, Ally also 

entered into agreements with OFS to repurchase 

all of the outstanding MCP stock and terminate 

the MCP’s Share Adjustment Right (SAR), 

which provided OFS with the right to receive 

additional common stock of Ally under certain 

circumstances if certain events occurred prior to 

December 30, 2016. Ally repurchased all of its 

MCP stock from OFS for $5.2 billion in 

November 2013. In addition, OFS received an 

additional $725 million for the elimination of the 

SAR.

OFS took significant action in fiscal year 2014 to 

reduce its remaining investment in Ally. In 

January 2014, Treasury sold Ally common stock 

in a private offering for approximately $3.0 

billion. In April 2014, Treasury sold common 

stock as part of Ally’s initial public offering 

(IPO) for almost $2.4 billion and $181 million 

associated with the over-allotment option that 

was exercised by the selling agent in May 2014. 

On August 14, 2014, OFS commenced the 

disposition of its remaining 75 million common 

shares of Ally common stock through a series of 

pre-arranged written trading plans. These sales 

increased the total amount collected by OFS on 

behalf of taxpayers to $18.1 billion, which is 

$923 million more than the original investment 

in Ally. OFS is actively seeking to wind-down 

the remaining investment in Ally, which 

represents approximately 13.4 percent of Ally’s 

common stock as of September 30, 2014.

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

American International Group (AIG) 

Investment Program

In fiscal year 2013, OFS exited all remaining 

holdings in AIG through the sale of common 

stock and AIG’s repurchase of warrants. During 

the financial crisis, the OFS’s and the FRBNY’s 

peak support for AIG totaled $182.3 billion. 

That included $69.8 billion that OFS committed 

and $112.5 billion committed by the FRBNY, 

including $22.1 billion of these commitments 

which were later cancelled. As a result of the 

combined efforts of AIG, OFS, and the Federal 

Reserve, $22.7 billion in excess of the total of 

funds disbursed were recovered through sales 

and other income. OFS’s cumulative net 

proceeds from repayments, sales, dividends, 

interest, and other income related to AIG assets 

totaled $55.3 billion. While TARP recovered less 

than its $67.8 billion total investment, this was 

offset by the proceeds from the additional 

Treasury shares of AIG, resulting in overall 

proceeds exceeding disbursements by $5.0 billion

for Treasury.

Additional information on the AIG Investment 

Program, 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/aig/Pages/default.aspx
CITIZENS’ REPORT | FISCAL YEAR 2014

OFS OPERATIONAL GOALS 7

Operational Goal Two: Continue 

Helping Families in Need to Avoid 

Foreclosure

OFS established several housing programs 

under TARP to address the historic housing 

crisis and help struggling homeowners avoid 

foreclosure wherever possible. These programs 

have helped homeowners avoid foreclosure and 

introduced important new reforms for the 

mortgage servicing industry to help make 

mortgage modifications become more 

sustainable and affordable. 

Making Home Affordable (MHA)

In early 2009, OFS launched the Making Home 

Affordable® Program (MHA) to help struggling 

homeowners avoid foreclosure and stabilize the 

housing market. MHA is aimed at helping 

homeowners who are experiencing financial 

hardships remain in their homes until their 

financial position improves or they relocate to a 

more sustainable living situation. At the same 

time, MHA protects the interests of taxpayers by 

disbursing funds only when transactions are 

completed and only as long as those contracts 

remain in place. Therefore, funds will be 

disbursed over many years. On June 26, 2014, 

the Administration announced that the 

application deadline for MHA programs would 

be extended to December 31, 2016, allowing 

additional families to benefit while maintaining 

clear standards and accountability for the 

servicing industry.

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, 2014, 81 non-GSE (government sponsored 

enterprise) servicers are participating in MHA. 

As of September 30, 2014, OFS has 

commitments to fund up to $29.8 billion in MHA 

payments and has disbursed $9.3 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 2014

can be found at: 

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

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

Home Affordable Modification Program 

(HAMP)

The largest program within MHA is the Home 

Affordable Modification Program (HAMP). 

HAMP offers eligible homeowners who are at 

risk of foreclosure the opportunity to obtain 

reduced monthly mortgage payments that are 

affordable and sustainable over the long-term. 

As of September 30, 2014, approximately 1.4

million homeowners have received permanent 

modifications through HAMP.1 This includes 

modifications on both non-GSE loans (for which 

the cost is paid by TARP) and GSE loans (for 

which the cost is paid by the GSEs). 

Homeowners participating in HAMP have 

collectively experienced nearly 42 percent 

median reduction in their mortgage payments—

representing more than $540 per month. MHA 

has also encouraged the mortgage industry to 

 1 783,301 of these modifications were OFS funded.
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

8 OFS OPERATIONAL GOALS

adopt similar programs that have helped 

millions more at no cost to taxpayers by 

establishing standards and best practices for 

loss mitigation evaluations. . 

Housing Finance Agency (HFA) Innovation 

Fund for the Hardest Hit Housing Markets 

(Hardest Hit Fund)

In addition to MHA, OFS also 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. As of September 30, 2014, all 19 

HFAs are fully operational and have created 

extensive infrastructures to operate these 

programs, including selecting and training 

networks of housing counselors to assist with 

applications, creating homeowner portals to aid 

homeowners in applying for assistance, and 

hiring underwriters and other staff to review 

and approve applications. The five largest 

servicers (Bank of America, JPMorgan Chase, 

Wells Fargo, Citibank, and Ocwen) are currently 

participating in programs in all 19 jurisdictions, 

primarily through mortgage payment assistance 

and mortgage loan reinstatement assistance. 

As of September 30, 2014, the 19 HFAs have 

collectively drawn approximately $4.5 billion (59

percent) of the $7.6 billion allocated under the 

program. For fiscal years 2014 and 2013, this 

program has disbursed $1.6 billion and $1.4 

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 

have entered into agreements with borrowers. 

As of September 30, 2014, 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 HFA quarterly report, including the states’ 

performance on metrics set by OFS on various 

aspects of their programs can be found at:

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

OFS Quarterly Performance Summary, a 

companion reference to the HFAs’ Quarterly 

Performance Reports 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:

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

FHA Refinance Program 

On March 26, 2010, HUD and Treasury 

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 $1.0 billion in fiscal year 2013 due to 

low utilization). As of September 30, 2014, FHA 

guaranteed 2,069 Refinance loans with a total 

face value of almost $292 million covered under 

OFS’s letter of credit facility. 
CITIZENS’ REPORT | FISCAL YEAR 2014

OFS OPERATIONAL GOALS 9

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 2014 and 2013 to dispose of OFS’s 

outstanding investments in a manner that 

balances the need 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.

In disposing of TARP investments, 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 by 

regulators. Utilizing auctions promotes 

competition and produces prices that are 

market-driven. 

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 

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 takes steps to ensure that TARP recipients 

comply with their TARP-related statutory and 

contractual obligations. Statutory obligations 

include 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 (currently Ally) must comply with 

additional restrictions on executive 

compensation, lobbying, and corporate expenses. 

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 Treasury, as 

well as compliance with HHF program terms 

and underwriting requirements.

In addition, all mortgage servicers participating 

in MHA are subject to program guidelines,

which require the servicer to offer MHA 

assistance to all eligible borrowers and to have 

systems that can process all MHA-eligible loans. 

Servicers are subject to periodic compliance 

reviews performed by OFS’s compliance agent, 

Making Home Affordable-Compliance (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 of the largest servicers that 

currently comprise approximately 88% of the 

HAMP mortgage servicing market and 

continued publishing these quarterly 

assessments throughout fiscal year 2014. These 

assessments have helped prompt the industry to 

improve its practices.
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

10 OFS OPERATIONAL GOALS

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, ranging from a 

Daily TARP Update, which provides detailed 

financial updates for each TARP program, to 

quarterly status reports on administrative 

activities and individual housing programs, 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

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. The 2014 Agency 

Financial Report includes the audited financial 

statements for the fiscal years ended September 

30, 2014 and September 30, 2013. Additional 

reports for prior periods are available at: 

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

In its six years of operation, TARP’s financial 

statements have received unmodified audit 

opinions from its auditor, the GAO. OFS also 

received a Certificate of Excellence in 

Accountability Reporting (CEAR) from the 

Association of Government Accountants for 

fiscal years 2013, 2012, 2011, 2010 and the 

period ending September 30, 2009.

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 
CITIZENS’ REPORT | FISCAL YEAR 2014

OFS OPERATIONAL GOALS 11

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 

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

12 OFS FINANCIAL PERFORMANCE

Fiscal Year 2014 and 2013 Financial Summary and Cumulative Net Income

OFS’s fiscal year 2014 net cost from operations 

of $3.0 billion includes the reported net income 

related to loans, equity investments, and other 

credit programs, as well as expenses for the 

Treasury housing programs under TARP and 

administrative expenses. For the fiscal year 

ended September 30, 2014, OFS reported net 

subsidy income for 5 programs –CPP, CDCI, 

TALF, AIFP, and FHA-Refinance. These 

programs collectively reported net subsidy 

income of $1.5 billion. Fiscal year 2014 expenses 

for the Treasury housing programs under TARP 

are $4.3 billion and administrative costs are

$186 million. For the fiscal year ended 

September 30, 2013, the net income from 

operations was $7.7 billion. These net cost and

income amounts reported in the financial 

statements reflect only transactions through 

September 30, 2014 and September 30, 2013, 

respectively, and therefore are different than 

lifetime cost estimates made for budgetary 

purposes. 

TARP Program Summary

Table 1 provides a financial summary for TARP 

programs since its inception on October 3, 2008, 

through September 30, 2014. 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, 2014, 

and cash inflows on the investments in the form 

of dividends, interest or other fees. 
CITIZENS’ REPORT | FISCAL YEAR 2014

OFS FINANCIAL PERFORMANCE 13

Table 1: TARP Summary1

From TARP Inception through September 30, 2014

(Dollars in billions)

Purchase 

Price or 

Guarantee 

Amounts

Total $ 

Disbursed

Investment 

Repayments

Write-offs 

and Losses6

Outstanding 

Balance7

Received 

from 

Investments

Bank Support Programs

Capital Purchase Program2 $ 204.9 $ 204.9 $ (199.4)

5 $ (4.9) $ 0.6 $ 27.0

Targeted Investment Program 40.0 40.0 (40.0) - - 4.4

Asset Guarantee Program 5.0 - - - - 4.1

Community Development Capital 

Initiative

0.6 0.6 (0.1) - 0.5 0.1

Credit Market Programs

Public-Private Investment Program

18.7 18.6 (18.6) - - 3.9

Term Asset-Backed Securities Loan 

Facility

0.1 0.1 (0.1) - - 0.6

SBA 7(a) Securities Purchase 

Program

0.4 0.4 (0.4) - - -

Other Programs

Automotive Industry Financing 

Program

79.7 79.7 (61.8) (16.1) 1.8 7.1

American InternationalGroup 

Investment Program3 67.8 67.8 (54.3) (13.5) - 1.0

Sub-total for Investment Programs 417.2 412.1 (374.7) (34.5) 2.9 48.2

Treasury Housing Programs under 

TARP

38.54 13.8 N/A N/A N/A N/A

Total for TARP Program $ 455.7 $ 425.9 $ (374.7) $ (34.5) $ 2.9 $ 48.2 1

This table shows TARP activity for the period from inception through September 30, 2014, 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 $1.0 billion 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 generally do not require (and OFS does not expect) repayments.
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

14 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, 2014 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 2014 and 2013, 

OFS sold its investments in 31 and 113 banks 

for combined proceeds of $263 million and $1.5

billion, respectively, through individual public 

and private auctions. These auctions resulted in 

net proceeds less than cost of $73 million and 

$455 million for those investments during fiscal 

years 2014 and 2013, 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, 2014, OFS has received $9.6

billion in gross proceeds from the disposition of 

warrants associated with 216 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. TARP’s Warrant 

Disposition Report is posted on the OFS website 

at the following link:

http://www.treasury.gov/initiatives/financialstability/reports/Pages/Warrant-DispositionReports.aspx

Summary of TARP Equity 

Investments

Table 2 provides information on the estimated 

values of TARP direct loan and equity 

investments by program, as of the end of fiscal 

years 2014 and 2013. 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, 2014 and 2013. The 

Estimated Value of the Investment column 

represents the present value of net cash inflows 

that OFS estimates it will receive from the loans 

and equity investments. These estimates 

include market risk assumptions. For equity 

investments, this amount represents fair 

value. The total difference of $679 million 

(2014) and $5.6 billion (2013) 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 2014

OFS FINANCIAL PERFORMANCE 15

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, 2014, 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. The future value of OFS’s remaining

investment in Ally will be determined based on 

market prices of Ally common stock, which could 

be influenced by industry and macroeconomic 

factors. This table assumes that all expected 

investments and disbursements for Treasury 

housing programs under TARP are completed, 

and adhere to general government budgeting 

guidance. This table will not tie to the financial 

statements since it includes repayments and 

disbursements expected to be made in the 

future. Table 3 is consistent with the estimated 

TARP lifetime cost disclosures on the OFS web 

site 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.

Key Trends/Factors Affecting TARP Future 

Activities and Ultimate Cost

TARP investment programs are nearly wound 

down with only $2.9 billion of the $412.1 billion 

still outstanding, representing 61 million shares 

of Ally Financial and 111 small banks in the 

CPP and CDCI portfolios. The lifetime costs of 

Table 2: Summary of TARP Equity Investments

(Dollars in billions)

Program

Outstanding 

Balance as of 

September 30, 

20141

Estimated Value 

of Investment as 

of September 

30, 2014

Outstanding 

Balance as of 

September 30, 

20131

Estimated Value 

of Investment as 

of September 

30, 2013

Bank Support Programs

Capital Purchase Program $ 0.6 $ 0.3 $ 3.1 $ 1.8

Community Development 

Capital Initiative 0.5 0.4 0.5 0.4 

Credit Market Programs

Public-Private Investment 

Program 0 0 0 0

Term Asset-Backed 

Securities Loan Facility 0 0 0 0.1

SBA 7(a) Securities 

Purchase Program 0 0 0 0

Other Programs

Automotive Industry 

Financing Program 1.8 1.5 19.9 15.6

American International 

Group Investment Program 0 0 0 0

Total $ 2.9 $ 2.2 $ 23.5 $ 17.9 1 Before subsidy cost allowance.
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

16 OFS FINANCIAL PERFORMANCE

investment programs are currently $67 million

and unlikely to fluctuate significantly in the 

future. Going forward, the expenditures for 

Treasury housing programs under TARP are 

expected to most significantly affect changes to 

the lifetime cost of TARP. The ultimate cost of 

Treasury housing programs will depend on 

macroeconomic factors, including real-estate 

values, financing available in capital markets, 

and the market demand for housing.

Table 3: Estimated Lifetime TARP Costs (Income)1

(Dollars in billions)

Estimated Lifetime Cost (Income) as of September 30

Program 20095 2010 2011 2012 2013 2014

Bank Support Programs

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

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

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

Community Development Capital 

Initiative 0.4 0.3 0.2 0.2 0.1 0.1

Credit Market Programs

Public-Private Investment 

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

Term Asset-Backed Securities 

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

SBA 7(a) Securities Purchase 

Program N/A --- --- --- --- ---

Other Programs

Automotive Industry Financing 

Program 34.5 14.7 23.6 24.3 14.7 12.3

American International Group 

Investment Program3 56.8 36.9 24.3 15.3 15.2 15.2

Subtotal 74.1 32.1 24.6 14.1 2.6 0.1

Treasury Housing Programs under 

TARP4 50.0 45.6 45.6 45.6 37.7 37.5

Total $ 124.1 $ 77.7 $ 70.2 $ 59.7 $ 40.3 $ 37.5 1 Estimated program costs (+) or savings (in parentheses) over the life of the program, including interest on re-estimates 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). For further details, see the discussion of the 

American International Group Investment Program, beginning on page 6. 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 2014

APPENDIX A: TARP GLOSSARY 17

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.

Mandatory Convertible Preferred (MCP): 

Preferred stock that includes an option for the 

holder to convert the preferred shares into a 

fixed number of common shares, usually any 

time after a predetermined date.

 

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

18 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 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
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

20 APPENDIX A: TARP GLOSSARY