THE DEPARTMENT OF THE TREASURY| OFFICE OF FINANCIAL STABILITY
CITIZENS’ REPORT | FISCAL YEAR 2017

TABLE OF CONTENTS 3

Table of Contents

MESSAGE FROM THE CHIEF FINANCIAL OFFICER FOR FINANCIAL STABILITY................................. 4

Program Background and OFS Organization Structure................................................................................... 6

OFS Operational Goals .................................................................................................................................................11

Operational Goal One: Complete the Wind-down of the Investment Programs..................................................................... 11

Operational Goal Two: Continue Helping Families in Need to Avoid Foreclosure................................................................... 13

Operational Goal Three: Minimize Cost to Taxpayer .............................................................................................................. 14

Operational Goal Four: Continue to Operate with the Highest Standards of Transparency, Accountability, and Integrity .... 16

Analysis of Fiscal Years 2017 and 2016 Financial Summary and Cumulative Net Income............18

TARP Glossary.................................................................................................................................................................24

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

4 MESSAGE FROM THE CHIEF FINANCIAL OFFICER

MESSAGE FROM THE CHIEF FINANCIAL OFFICER FOR THE OFFICE 

OF FINANCIAL STABILITY

November 21, 2017

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

2017. This report describes our financial and performance results for the ninth 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 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. 

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

2017, 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 American International Group, Inc. Of the original ten investment programs, eight are 

effectively closed. Investment programs with remaining outstanding balances include the Capital 

Purchase Program ($48 million) and the Community Development Capital Initiative ($75 million). 

OFS continues to wind-down those positions as quickly as practicable. 

In addition to winding down the investment programs under TARP, TARP’s largest housing 

program, Making Home Affordable (MHA), closed to new applications as of December 30, 2016, as 

required by the Consolidated Appropriations Act, 2016 (the Act). More than 2.9 million homeowner 

assistance actions have taken place through the MHA, including 1.7 million permanent 

modifications through the Home Affordable Modification Program (HAMP). In addition, MHA has 

indirectly assisted millions more by setting new standards and changing industry practices that led 

to more affordable and sustainable private modifications. MHA has also demonstrated that a 

mortgage modification can be a sustainable option for homeowners seeking to avoid foreclosure. As 

we continue to execute the MHA wind-down, we are actively engaged with stakeholders on what the 

future of loss mitigation should include to ensure a smooth and successful transition for the 

mortgage servicing industry to life after MHA. 

To date, our efforts through the Hardest Hit Fund (HHF) have assisted approximately 319,000 

American homeowners in preventing avoidable foreclosures, and helped stabilize neighborhoods in 

18 states and the District of Columbia. In the last year alone, HHF programs assisted

approximately 50,000 households. Notwithstanding these accomplishments and recent 

improvements in the economy, the recovery of the housing market remains uneven. While state 

unemployment rates and home prices have generally improved, many homeowners and 

neighborhoods continue to face obstacles. Many of the states participating in the HHF continue to 

exceed the national average for underemployment and negative equity and many experience higher 

than average rates of serious mortgage delinquency. In addition, blighted and vacant properties 

depress property values in many communities that would otherwise benefit from the rise in home 

prices, while other communities are unable to attract new homebuyers to stimulate market activity. 

Recognizing the current and persistent need among HHF states, the Act included a provision that 

allowed OFS to commit an additional $2.0 billion in TARP funds to the program. On February 19, 
CITIZENS’ REPORT | FISCAL YEAR 2017

MESSAGE FROM THE CHIEF FINANCIAL OFFICER 5

2016, OFS announced that the $2.0 billion would be allocated to existing HHF program participants. 

By June 2016, OFS had completed the allocation process and made available the additional funds to 

Housing Finance Agencies (HFAs).

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

consecutive year, OFS has earned an unmodified opinion from the GAO on its financial statements 

for TARP, and its internal control over financial reporting for TARP.

Sincerely, 

Lorenzo Rasetti

Chief Financial Officer for the Office of Financial Stability
THE DEPARTMENT OF THE TREASURY| OFFICE OF FINANCIAL STABILITY

6 ABOUT THE OFFICE OF FINANCIAL STABILITY

Program Background and OFS Organization Structure

Program Background

Legal Authority

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 the 

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 $700.0 billion to 

a cumulative $475.0 billion. OFS’s authority to 

make new program commitments under TARP 

originally expired on October 3, 2010. The 

Consolidated Appropriations Act, 2016 (the Act), 

gave the Secretary of the Treasury the ability to 

commit an additional $2.0 billion in TARP funds 

to current Hardest Hit Fund (HHF) participants. 

The additional $2.0 billion was obligated by 

Treasury as of June 2016. OFS currently does 

not have the authority to commit new program 

funds.

Bank Support Programs (CPP, TIP, AGP, 

CDCI, SCAP)

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. With the additional capital that OFS 

offered, CPP participants were better equipped 

to undertake new lending and continue to 

provide other services to consumers and 

businesses. OFS received preferred stock or 

subordinated debt securities in exchange for the 

CPP investments. Most financial institutions 

participating in the CPP issued preferred stock 

with an initial dividend rate of five percent for 

the first five years, stepping up to a nine percent 

rate thereafter. In addition, OFS received 

warrants to purchase common shares or other 

securities from the banks to enable OFS to 

receive additional returns on its investments as 

banks recovered. OFS continues to wind-down 

the remaining CPP investments through 

repayments by those institutions that are able to 

repay, restructurings and sales of common stock, 

where OFS’s investment shares were converted 

to common stock holdings.

Targeted Investment Program

OFS established the Targeted Investment 

Program (TIP) in December 2008. OFS invested 

a total of $40.0 billion in two institutions – Bank 

of America (BofA) and Citigroup – under the 

TIP. Similar to the CPP, OFS invested in 

preferred stock and received warrants to 

purchase common stock in each institution. The 

TIP investments provided for annual dividends 

of eight percent. The program also imposed 
CITIZENS’ REPORT | FISCAL YEAR 2017

ABOUT THE OFFICE OF FINANCIAL STABILITY 7

greater reporting requirements and other 

restrictions on BofA and Citigroup. OFS 

completed the wind-down of the TIP in 

December 2009 when both BofA and Citigroup 

repaid their TIP investments in full. OFS 

received net proceeds of $4.4 billion in excess of 

disbursements.

Asset Guarantee Program

Under the Asset Guarantee Program (AGP), 

TARP commitments were used to support two 

institutions – BofA and Citigroup. BofA, 

however, ultimately decided not to participate in 

this program, and paid OFS a termination fee of 

$276 million. In January 2009, OFS, the 

Federal Reserve, and the Federal Deposit 

Insurance Corporation (FDIC) agreed to share 

potential losses on a $301.0 billion pool of 

Citigroup’s covered assets. As a premium for the 

guarantee to Citigroup, OFS received $4.0 

billion of Citigroup preferred stock, which was 

reduced by $1.8 billion upon early termination of 

the agreement. OFS completed the wind-down of 

the AGP in February 2013, and received more 

than $4.1 billion in proceeds from the AGP 

without disbursing any claim payments.

Community Development Capital Initiative

On February 3, 2010, OFS created the 

Community Development Capital Initiative 

(CDCI) to help viable certified Community 

Development Financial Institutions (CDFIs) and 

the communities they serve cope with effects of 

the financial crisis. Since many CDFIs don’t 

have the same access to capital markets as 

larger banks, the program was designed with 

more generous terms than the CPP. Under this 

program, CDFI banks, thrifts, and credit unions 

received investments aggregating $570 million

in capital with an initial dividend or interest 

rate of two percent. To encourage repayment 

while recognizing the unique circumstances 

facing CDFIs, the dividend rate increases to nine 

percent after eight years. In August 2016, OFS 

announced an early repurchase option for CDCI 

institutions to allow remaining participants to 

repurchase their outstanding securities at a fair 

value ahead of the dividend rate step-ups 

currently set to take place in 2018. OFS 

completed the last of the early repurchases in 

January 2017. In total, there were 27 full and 

partial repurchases at fair value under the early 

repurchase option.

Supervisory Capital Assessment Program

In 2009, Treasury worked with federal banking 

regulators to develop a comprehensive “stress 

test” known as the Supervisory Capital 

Assessment Program (SCAP). The purpose of 

the SCAP was to determine the health of the 

nation’s 19 largest bank holding companies with 

unprecedented transparency and thereby help 

restore confidence in the banking system. In 

conjunction with the SCAP, Treasury announced 

that it would provide capital under TARP 

through the Capital Assistance Program (CAP) 

to those institutions that needed additional 

capital but were unable to raise it through 

private sources. The CAP closed on November 9, 

2009, without making any investments.

For additional information on the bank support 

programs please visit the OFS website at: 

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

Credit Market Programs (PPIP, TALF, SBA 

7(a))

OFS has 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.
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

8 ABOUT THE OFFICE OF FINANCIAL STABILITY

Public-Private Investment Program

On March 23, 2009, OFS launched the Legacy 

Securities Public-Private Investment Program 

(PPIP) to help restart the market for non-agency 

residential mortgage-backed securities (RMBS) 

and commercial mortgage-backed securities 

(CMBS). 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. OFS 

completed the wind-down of the PPIP during 

fiscal year 2015, with no debt or equity 

investments outstanding after the final equity 

repayment was made in June 2013. OFS 

received $22.5 billion of repayment, sales and 

investment income that exceeded the original 

investment by $3.9 billion.

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 

markets for asset-backed securities (ABS) and 

CMBS, which had ground to a virtual standstill 

during the early months of the financial crisis. 

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). 

In 2013, the commitment was reduced to $100 

million – the loan amount that was ultimately 

disbursed by OFS to fund the TALF, LLC. As of 

September 30, 2015, all TALF loans provided by 

FRBNY had been repaid in full and the program 

closed. Since inception, accumulated income 

earned from investments in TALF, LLC totaled 

$685 million.

Small Business Administration 7(a) 

Securities Purchase Program

OFS launched the Small Business 

Administration (SBA) 7(a) Securities Purchase 

Program to help facilitate the recovery of the 

secondary market for small business loans, and 

thus help free up credit for small businesses. 

Under this program, OFS purchased securities 

comprised of the guaranteed portion of SBA 7(a) 

loans, which finance a wide range of small 

business needs. OFS invested approximately 

$367 million in 31 SBA 7(a) securities between 

March and September 2010. Investments under 

the SBA 7(a) program were fully liquidated by 

January 2012, resulting in proceeds in excess of 

cost of $9 million.

For additional information on the credit market 

programs, please visit the OFS website at: 

http://www.treasury.gov/initiatives/financialstability/TARP-Programs/credit-marketprograms/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, which would have 

resulted in a significant disruption of the U.S. 

auto industry. Recognizing that both GM and 

Chrysler were on the verge of collapse, OFS 

disbursed $79.7 billion in loans and equity 

investments to GM, Chrysler, and General 

Motors Acceptance Corporation (now known as 

Ally Financial). As of September 30, 2017, OFS 

has collected $70.5 billion through sales, 

repayments, dividends, interest, recoveries, and 

other income, compared to the original 

disbursement. Recoveries from the bankruptcy 

liquidation of Old Chrysler and Old GM remain 

possible.

For additional information on the AIFP, please 

visit the OFS website at: 

http://www.treasury.gov/initiatives/financialstability/TARP-Programs/automotiveprograms/Pages/default.aspx
CITIZENS’ REPORT | FISCAL YEAR 2017

ABOUT THE OFFICE OF FINANCIAL STABILITY 9

American International Group, Inc. 

Investment Program

In 2008, with American International Group, 

Inc. (AIG) facing potentially fatal liquidity 

problems and with the crisis threatening to 

intensify and spread more broadly throughout 

the economy, Treasury and the Federal Reserve 

provided assistance to AIG. In December 2012, 

Treasury exited all remaining holdings in AIG

through the sale of common stock and AIG’s 

repurchase of warrants. During the financial 

crisis, the Treasury’s and the FRBNY’s peak 

support for AIG totaled $182.3 billion. That 

included $69.8 billion in TARP funds that OFS 

committed and $112.5 billion committed by the 

FRBNY, including $22.1 billion in commitments 

which were later canceled. As a result of the 

combined efforts of AIG, Treasury, and the 

FRBNY, $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 in excess of disbursements of $5.0 

billion for Treasury as a whole.

For additional information on the AIG 

Investment Program, please visit the Office of 

Financial Stability website at: 

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

Housing Programs

Making Home Affordable

In early 2009, OFS launched MHA to help 

struggling homeowners avoid foreclosure and 

stabilize the housing market. OFS has 

committed $27.8 billion to the MHA program.

MHA is aimed at helping homeowners 

experiencing financial hardships to 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 contracts remain in place. 

The cornerstone of MHA is the Home Affordable 

Modification Program (HAMP), which provides 

eligible homeowners the opportunity to reduce 

their monthly mortgage payments to more 

affordable and sustainable levels to avoid 

foreclosure. In addition to HAMP, OFS

introduced programs under MHA to help 

homeowners who are unemployed, “underwater” 

on their loan (i.e. those who owe more on their 

home than it is currently worth), or are 

struggling with a second lien. MHA also includes 

options for homeowners who would like to 

transition to a more affordable living situation 

through a short sale or deed-in-lieu of 

foreclosure. 

In accordance with provisions of the Act, MHA 

terminated on December 31, 2016, except with 

respect to certain loan modification applications 

made before such date. Therefore, while 

applications submitted before the deadline 

continue to be evaluated and servicers may 

continue to offer HAMP trials (in accordance 

with program guidelines), the program is now 

closed to new applications. MHA has set new 

standards for mortgage assistance and consumer 

protection, which have contributed to millions of 

homeowners receiving assistance to avoid 

foreclosure through other government programs 

and proprietary mortgage modifications.

In addition to HAMP, MHA includes programs 

to help homeowners address specific types of 

mortgages, in conjunction with the Federal 

Housing Administration (FHA) and the United 

States Department of Agriculture (USDA).
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

10 ABOUT THE OFFICE OF FINANCIAL STABILITY

Housing Finance Agency Innovation Fund 

for the Hardest Hit Housing Markets 

(Hardest Hit Fund)

The HHF was established in February 2010 to 

provide targeted aid to homeowners in states hit 

hardest by the economic and housing market 

downturn. In an effort to restore stability to 

housing markets, the HHF provides funding for 

state Housing Finance Agencies (HFAs) to 

develop locally-tailored foreclosure prevention 

solutions in areas that have been hardest hit by 

home price declines and high unemployment. In 

total, $9.6 billion in HHF funds has been 

allocated among 18 states and the District of 

Columbia. Seven years after program inception, 

homeowners continue to face ongoing economic 

challenges including negative equity and 

underemployment in hardest hit states in the 

wake of the financial crisis. 

HHF programs vary state to state, but may 

include such programs as mortgage payment 

assistance for unemployed or underemployed 

homeowners, reinstatement to bring 

homeowners current on their mortgage or 

property taxes, principal reduction to help 

homeowners modify or refinance into more 

affordable mortgages, funding to eliminate 

homeowners’ second lien loans, funding for 

blight elimination activities, funding for down 

payment assistance to homebuyers, and help for 

homeowners who are transitioning out of their 

homes into more affordable living situations.

For additional information on the housing 

programs, please visit the OFS website at:

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

Support for FHA-Refinance Program

In March 2010, enhancements were made to an 

existing FHA program that permitted lenders to 

provide additional refinancing options to 

homeowners who owe more than their homes are 

worth because of large declines in home prices in 

their local markets. This program, known as the 

FHA-Refinance program, is intended to provide 

more opportunities for qualifying mortgage loans 

to be restructured and refinanced into FHAinsured loans. On December 31, 2016, the 

application period for the FHA-Refinance 

Program ended. TARP funds have been made 

available up to $27 million to cover the 

maximum total amount of OFS coverage for the 

loans in the program.

OFS Organization Structure

OFS is currently headed by OFS’s Chief 

Financial Officer (CFO). In the absence of an 

Assistant Secretary for Financial Stability

(ASFS), OFS’s CFO has been formally delegated 

the authorized duties of the ASFS. Reporting to 

the CFO are three major organizations: the 

Office of Finance and Operations, the 

Homeownership Preservation Office, and the 

Chief Investment Office. The Office of General

Counsel and the Office of Financial Agents also 

report to the CFO as well as to other 

Departmental Offices.

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, program compliance, and 

information technology.
CITIZENS’ REPORT | FISCAL YEAR 2017

OFS OPERATIONAL GOALS 11

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 year 2017. 

Operational Goal One: Complete the 

Wind-down of the Investment 

Programs

Bank Support Programs

OFS disbursed a total of $245.5 billion under the 

various TARP bank programs. As of September 

30, 2017, OFS has collected more than $275.8 

billion through repayments, dividends, interest, 

warrant sales, and other income, representing 

$30.4 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

In fiscal year 2017, OFS continued to make 

progress winding down the CPP. 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, 2017, OFS has 

received $199.7 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 $226.8 billion1. As of 

September 30, 2017, $48 million in CPP gross 

 1 Totals may not equal due to rounding.

investments remained outstanding in 6 

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. 

However, since the majority of the institutions 

currently in the CPP portfolio remain a going 

concern, OFS continues to work with CPP

institutions to restructure certain investments

that will allow them to exit TARP. 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. 

During fiscal years 2017 and 2016, one and two 

investments were repaid in full for a total of $2 

million and $4 million, respectively. In addition, 

five and five investments were restructured 

resulting in proceeds of $80 million and $20 

million in fiscal years 2017 and 2016, 

respectively.

At the beginning of the fiscal year, OFS held two 

of its remaining CPP positions in common stock, 

First Bancorp-Puerto Rico (FB-PR) and 

Broadway Financial Corporation (Broadway). 

During the fiscal year, OFS sold its remaining 

common stock in FB-PR for net proceeds of $58 

million. In addition, OFS sold 7,450,998 shares 

of its Broadway common stock for total net 

proceeds of $13 million.

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 has 

received net warrant proceeds of $8.1 billion to 

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

12 OFS OPERATIONAL GOALS

Additional information on the CPP, including 

details on the program’s purpose, overview, and 

status can be found at the following link:

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

Community Development Capital Initiative

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 ($356 million from 

principal and $8 million from warrants) 

represented exchanges by 28 CPP institutions 

converting into the CDCI. During fiscal years 

2017 and 2016, OFS collected a total of $327 

million and $35 million, respectively, in 

repayments, early repayments, dividends, and 

interest from institutions in the CDCI program. 

As of September 30, 2017, $75 million in CDCI 

investments remained outstanding in 22 

institutions.

In keeping with OFS’s goal of exiting its crisisera programs in a timely and responsible 

manner, in August 2016, OFS announced that it 

was offering an early repurchase option to 

eligible CDCI participants. Under the early 

repurchase option, CDCI institutions were 

permitted to submit proposals requesting early 

repurchase of between half and all of their 

outstanding CDCI securities held by OFS. 

These proposals were evaluated by a committee 

using fair market valuation estimates. CDCI 

institutions had until November 18, 2016 to 

submit their final proposals. By the end of 

January 2017, OFS completed 27 full and partial 

repurchases at fair value under the early 

repurchase option for a total of $268 million in 

repayments. The early repurchase option 

allowed OFS to dispose of investments at fair 

value in a manner that helped eliminate longer 

term credit and market risk exposure to 

taxpayers from the portfolio.

Additional information on CDCI, including 

details on the program’s purpose, overview, and 

status can be found at the following link:

http://www.treasury.gov/initiatives/financialstability/TARP-Programs/bank-investmentprograms/cdci/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, 2017, 

OFS has collected $70.5 billion through sales, 

repayments, dividends, interest, recoveries, and 

other income. This includes $5 million collected 

during fiscal year 2017, related to the Motors 

Liquidation Company Debtor-in-Possession 

(DIP) Lenders Trust.

To further maximize the recovery of TARP funds 

for taxpayers, OFS, along with Export 

Development Canada (EDC), which jointly 

financed administration of the General Motors 

bankruptcy, entered into a settlement with the 

Unsecured Creditors Committee of General 

Motors Corporation to split any proceeds of the 

Avoidance Action Trust (AAT) litigation, with 

OFS and EDC receiving 30 percent and the 

unsecured creditors receiving 70 percent. As a 

condition of the settlement, OFS and EDC 

provided an advance of $15 million ($13 million 

provided by OFS) in September 2016 to the AAT 

to fund the ongoing litigation against certain 

lenders to Old GM. This settlement yields the 

most favorable attainable economic outcome to 

ensure OFS is repaid some portion of any assets 

recovered through the pending lawsuit.

Additional information on the AIFP, including 

details on the program’s purpose, overview, and 

status can be found at the following link:

http://www.treasury.gov/initiatives/financialstability/TARP-Programs/automotiveprograms/Pages/default.aspx
CITIZENS’ REPORT | FISCAL YEAR 2017

OFS OPERATIONAL GOALS 13

Operational Goal Two: Continue 

Helping Families in Need to Avoid 

Foreclosure

Making Home Affordable

Consistent with OFS’s goal of continuing to help 

struggling homeowners find solutions to avoid 

foreclosure whenever possible, OFS has 

developed and is implementing a process to 

seamlessly transition the program from an 

active to steady state, while assisting as many 

homeowners as possible that applied by the 

program’s statutory sunset date of December 31, 

2016. As of September 30, 2017, 65 servicers are 

participating in OFS’s MHA program for nonGovernment Sponsored Enterprise (GSE) loans. 

As of September 30, 2017, OFS has

commitments to fund up to $27.8 billion in MHA 

payments and has disbursed $17.9 billion since 

inception.

OFS publishes assessments of servicer 

performance containing data on compliance with 

program guidelines, as well as metrics on 

program results. OFS believes that these 

assessments have set a new standard for 

transparency about mortgage servicer efforts to 

assist homeowners at risk of foreclosure, and 

have helped encourage servicers to improve 

processes and performance of their foreclosure 

prevention activities.

MHA performance highlights for fiscal year 2017

can be found at: 

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

The largest program within MHA is HAMP. 

HAMP offered eligible homeowners at risk of 

foreclosure the opportunity to modify their 

monthly mortgage payments to a more 

affordable and sustainable level. 

As of September 30, 2017, approximately 1.7

million homeowners have received permanent 

modifications through HAMP2. Homeowners 

participating in HAMP have collectively 

experienced nearly a 35 percent median 

reduction in their mortgage payments—

representing more than $466 per month. MHA 

has also encouraged the mortgage industry to 

offer their own similar programs, which have 

helped millions more at no cost to taxpayers.

Additional information on MHA, including 

details on the program’s purpose, overview, and 

status can be found at the following link:

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

Hardest Hit Fund

In addition to MHA, OFS operates the HHF, 

which allows participating state HFAs in the 

nation’s hardest hit housing and unemployment 

markets to design innovative, locally-targeted 

foreclosure prevention programs.

In fiscal year 2017, state HFAs continued to 

adapt their programs to best meet borrower 

needs in evolving economic and housing 

markets. Notwithstanding the HFAs’ efforts 

and recent improvements in the economy, the 

recovery of the housing market remains uneven. 

Recognizing the current and persistent need 

among HHF states, the Act included a provision 

that allowed OFS to commit an additional $2.0 

billion in TARP funds to current HHF program 

participants.

 

A total of 16 HFAs offer principal reduction to 

facilitate a loan modification, refinance, recast, 

or eliminate subordinate liens. Seven HFAs

offer property tax reinstatement for elderly 

 2 Includes modifications on both non-GSE loans and GSE 

loans. 1,194,261 of these modifications are OFS funded 

consisting of 1,072,312 non-GSE modifications and 121,949 

GSE modifications.
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

14 OFS OPERATIONAL GOALS

homeowners with reverse mortgages. 

Additionally, eight HFAs allocate a portion of 

their HHF funds to blight elimination in an 

effort to stabilize neighborhoods and prevent 

foreclosures. Finally, nine HFAs 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, 2017, the 19 HFAs have 

collectively drawn approximately $8.4 billion (88 

percent) of the $9.6 billion allocated under the 

program. For fiscal years 2017 and 2016, this 

program has disbursed $1.7 billion and $1.0 

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, 2021 to 

utilize all HHF funding. 

Each HFA submits a quarterly report on the 

progress of its programs. 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: 

https://www.treasury.gov/initiatives/financialstability/reports/Pages/HHF.aspx

Additional information on the HHF, including 

details on the program’s purpose, overview, and 

status can be found at the following link:

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 FHA-Refinance Program,

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 (incrementally 

reduced to $27 million, OFS’s maximum liability 

for loans covered by the program as of December 

31, 2016), in order to fund a share of the losses 

associated with this program. The program 

closed to new borrowers on December 31, 2016; 

however, OFS will continue to cover potential 

loss claim payments through December 31, 2022. 

As of September 30, 2017, FHA has guaranteed 

7,234 refinance loans with a total face value of 

approximately $1.0 billion, of which 4,200 loans 

are subject to OFS coverage with a face value of 

$620 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 2017 and 2016 to dispose of OFS’s 

outstanding investments in a manner that 

balances speed of exit with maximizing returns 

for taxpayers. OFS continues to take steps to 

ensure that TARP recipients comply with any 

TARP-related statutory or contractual 

obligations such as executive compensation 
CITIZENS’ REPORT | FISCAL YEAR 2017

OFS OPERATIONAL GOALS 15

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 

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 need to comply with restrictions on 

payment of dividends and on repurchases of 

junior securities. Recipients of exceptional 

assistance (none of which remain in the 

program) were required to 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 OFS, as well 

as their 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 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 for the largest servicers 

that currently comprise approximately 83

percent 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.

Currently, OFS is utilizing its 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. Beginning in early 2018, 

compliance testing will transition to a delegated 

servicer testing model.
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

16 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 towards 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

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 ninth OFS 

Agency Financial Report (AFR), which includes 

the audited financial statements for the fiscal 

years ended September 30, 2017 and September 

30, 2016. Additional reports for prior periods 

are available at: 

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

In its nine years of operation, TARP’s financial 

statements have received nine unmodified audit

opinions from its auditor, the Government 

Accountability Office (GAO). 

TARP Tracker

Since 2013, OFS has offered an interactive tool 

called the TARP Tracker, which allows users to 

track the flow of TARP funds over the lifetime of 

each individual TARP investment area. The 

TARP Tracker allows users to view each 

investment area separately to get a clearer sense 

of what has occurred in a particular program, 

and includes a scroll of events, major 

transactions, and legislative actions that have 

impacted the program.
CITIZENS’ REPORT | FISCAL YEAR 2017

OFS OPERATIONAL GOALS 17

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; and

• 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 

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

18 OFS FINANCIAL PERFORMANCE

Analysis of Fiscal Years 2017 and 2016 Financial Summary and 

Cumulative Net Income

OFS’s fiscal year 2017 net cost of operations of 

$4.1 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, 2017, OFS reported net 

subsidy income for four programs – CPP, CDCI, 

AIFP and FHA-Refinance. These programs 

collectively reported net subsidy income of $14 

million. Fiscal year 2017 costs for the Treasury 

housing programs under TARP are $4.0 billion 

and administrative costs are $97 million. For 

the fiscal year ended September 30, 2016, the 

net cost of operations was $4.1 billion. These net 

cost amounts reported in the Agency Financial 

Report reflect only transactions through 

September 30, 2017 and September 30, 2016, 

and therefore are different than lifetime cost 

estimates made for budgetary purposes. Over 

time the cost of TARP programs will change. As 

described 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, 2017. 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, 2017, 

and cash inflows on the investments in the form 

of dividends, interest or other fees. 
CITIZENS’ REPORT | FISCAL YEAR 2017

OFS FINANCIAL PERFORMANCE 19

Table 1: TARP Summary1

From TARP Inception through September 30, 2017

(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 $ (199,663)5 $ (5,184) $ 48 $ 27,090

Targeted Investment 

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

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

Community Development 

Capital Initiative 570 570 (468) (27) 75 64

Credit Market Programs 

Public Private Investment 

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

Term Asset-Backed 

Securities Loan Facility 100 100 (100) - - 685 

SBA 7(a) Securities 

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

Other Programs 

Automotive Industry 

Financing Program 79,692 79,692 (63,037) (16,656) - 7,500

American International 

Group Investment 

Program3

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

Subtotal for Investment 

Programs 417,085 412,085 (376,606) (35,356) 123 48,719

Treasury Housing 

Programs under TARP 37,4254 26,410 N/A N/A N/A - 

Total for TARP Program $ 454,510 $ 438,494 $ (376,606) $ (35,356) $ 123 $ 48,719 

Note: Figures may not foot due to rounding. 1 This table shows TARP activity for the period from inception through September 30, 2017, 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 $27.8 billion for the Making Home Affordable Program, $9.6 billion for the Hardest 

Hit Fund, and $45 million committed for the FHA-Refinance Program.

5 Includes $2.2 billion of Small Business Lending Fund (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 under “net proceeds from sales and 

repurchases of assets in excess of (less than) cost” in Note 6 of the Agency Financial Report.

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

20 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, 2017 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. As of 

September 30, 2017, OFS has sold its 

investments in 190 banks for combined principal 

receipts of $3.1 billion through individual 

private auctions. These auctions resulted in net 

proceeds less than cost of to date of $774 million.

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, 2017, OFS has received $9.7

billion in gross proceeds from the disposition of 

warrants associated with 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 2017 and 2016. 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, 2017 and 2016. The 

Estimated Value of 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 $30 million (2017) and $140 million 

(2016) between the two columns is considered

the “subsidy cost allowance” under the Federal 

Credit Reform Act methods OFS follows for 

budget and accounting purposes. 

See Note 6 in the Agency Financial Report for 

further discussion.
CITIZENS’ REPORT | FISCAL YEAR 2017

OFS FINANCIAL PERFORMANCE 21

Table 2: Summary of TARP Equity Investments 

(Dollars in millions)

Program 

Outstanding 

Balance as of 

September 

30, 20171 

Estimated Value 

of Investment as 

of September 30, 

2017 

Outstanding 

Balance as of 

September 30, 

20161 

Estimated 

Value of 

Investment as 

of September 

30, 2016 

Bank Support Programs 

Capital Purchase Program $ 48 $ 35 $ 210 $ 111

Community Development 

Capital Initiative 75 58 420 379

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 0 0

American International Group 

Investment Program 0 0 0 0

Total $ 123 $ 93 $ 630 $ 490 

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 market-based models to 

estimate the market value of these 

investments. All future cash flows are 

adjusted for market risk. Further details on 

asset valuation can be found in Note 6 of the 

Agency Financial Report.
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

22 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, 

2017, 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. This table will not match the 

financial statements since the table 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 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 2016 2017 

Bank Support Programs 

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

Targeted Investment 

Program (1.9) (3.8) (4.0) (4.0) (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) (4.0) (4.0)

Community Development 

Capital Initiative 0.4 0.3 0.2 0.2 0.1 0.1 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) (2.7) (2.7)

Term Asset-Backed 

Securities Loan Facility (0.3) (0.4) (0.4) (0.5) (0.6) (0.6) (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) (0.0) (0.0)

Other Programs 

Automotive Industry 

Financing Program 34.5 14.7 23.6 24.3 14.7 12.2 12.1 12.2 12.2

American International 

Group Investment Program3 56.8 36.9 24.3 15.3 15.2 15.2 15.2 15.2 15.2

Subtotal 74.1 32.1 24.6 14.1 2.6 0.1 (0.2) (0.2) (0.3)

Treasury Housing Programs 

under TARP4 50.0 45.6 45.6 45.6 37.7 37.4 37.4 34.7 32.6

Total $124.1 $77.7 $70.2 $59.7 $40.3 $37.5 $37.2 $34.5 $32.3 

Note: Figures may not foot due to rounding.

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 consist of the MHA, HHF, and FHA-Refinance programs. The estimated lifetime cost of the FHA-Refinance Program 

(which is accounted for under credit reform) 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 2017

OFS FINANCIAL PERFORMANCE 23

Key Factors Affecting TARP Future 

Activities and Ultimate Cost

TARP investment programs are nearly wound 

down with only $123 million of the total 

$412.1 billion disbursed still outstanding, 

representing 28 small banks in the CPP and 

CDCI portfolios. The estimated lifetime 

income associated with investment programs 

is currently $254 million and may fluctuate 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. 
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

24 TARP GLOSSARY

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.

 

Consolidated Appropriations Act, 2016: The 

law which included provisions that i.) the 

MHA program will terminate on December 31, 

2016, except with respect to certain loan 

modification applications made before such 

date and ii.) allowed Treasury to commit an 

additional $2.0 billion in TARP funds to the 

HHF program.

 

Debtor-In-Possession (DIP): A debtor-inpossession in U.S. bankruptcy law has filed a 

bankruptcy petition but still remains in 

possession of its property. DIP financing 

usually has priority over existing debt, equity 

and other claims. 

 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act (Dodd-Frank Act): 

The law that limited Treasury’s authority to 

purchase or guarantee troubled assets to a 

maximum of $475.0 billion.

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.

Hardest Hit Fund (HHF): A TARP program

to help 18 hardest hit states, plus the District 

of Columbia, to develop locally-tailored 

programs to assist struggling homeowners in 

their communities.

 

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. 

 

Housing Finance Agencies (HFAs): Statecharted authorities established to help meet 

the affordable housing needs of the residents 

of their states. 
CITIZENS’ REPORT | FISCAL YEAR 2017

TARP GLOSSARY 25

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. 

 

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.

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.

 

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.
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

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CITIZENS’ REPORT | FISCAL YEAR 2017

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

Website Information

Treasury.........................................................................................................................................................www.treasury.gov

Office of Financial Stability ............................................................................................................... www.financialstability.gov

Making Home Affordable Program........................................................................................www.makinghomeaffordable.gov

Additional References

TARP Programs..................................... www.treasury.gov/initiatives/financial-stability/TARP-Programs/Pages/default.aspx

TARP Reports..................................................... www.treasury.gov/initiatives/financial-stability/reports/Pages/default.aspx

TARP Tracker............................................ www.treasury.gov/initiatives/financial-stability/reports/Pages/TARP-Tracker.aspx

Financial Reports ..... www.treasury.gov/initiatives/financial-stability/reports/Pages/Annual-Agency-Financial-Reports.aspx
THE DEPARTMENT OF THE TREASURY | OFFICE OF FINANCIAL STABILITY

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www.financialstability.gov