Report to Congress submitte

C

d pursua

of the Sm

Cost R

ant to Se

mall Busi

Repo

ection 410

iness Jobs

ort

06(2)

s Act
June 201

Cost R

Report to

of the Sm

Introduc

Small bus

the econo

Lending F

communit

of the SBL

and prom

This repor

Treasury t

operating

made wit

investmen

Investmen

$84 millio

addition,

the SBLF p

President

Estimate

Treasury i

investmen

institution

21, 2011,

statutory

As of Dece

their sma

In total, S

baseline2

,

                  

1 In this rep

with consol 2 As establis

were report

12

Report

o Congress s

mall Busines

tion

inesses are a

omic recovery

und (SBLF) is

ty developme

LF is to encou

mote economi

rt is submitte

to provide a s

g expenses, in

h respect to t

nts and the a

nts made thro

on in contrast

Treasury is cu

program, $2 m

’s Budget for

ed Cost of SB

invested over

nts of $3.9 bi

ns operate in

with subsequ

funding dead

ember 31, 20

ll business len

BLF participa

, and by $1.3

                       

ort, the terms “b

idated assets of

shed in the Act, t

ted for each of t

submitted p

ss Jobs Act o

vital part of t

y.  Established

a dedicated f

ent loan fund

urage Main St

c growth in c

ed pursuant to

semiannual w

ncluding comp

the SBLF prog

ctual operatin

ough the SBL

to an origina

urrently proje

million less th

fiscal year 20

BLF Investme

r $4.0 billion

llion in 281 co

over 3,000 lo

uent transact

dline.   

011, institutio

nding, helping

nts increased

billion over t

                   

banks” and “com

less than $10 bi

the baseline for

he four calenda

pursuant to S

of 2010

the American

d by the Smal

fund designe

ds (CDLFs) in o

treet banks an

ommunities a

o Section 410

written report

pensation for

gram.  This re

ng expenses f

F program ar

ally projected

ected to incur

han the opera

013.   

ents

in 332 institu

ommunity ba

ocations acro

tions complet

ons participati

g to support s

d their small b

he prior quar

mmunity banks”

illion as of Dece

measuring the c

r quarters ended

2

Section 4106

n economy, an

ll Business Jo

d to provide

order to enco

nd small busi

across the Na

06(2) of the A

t to Congress

r financial age

port reflects

for the progra

e presently e

cost of $1.3

r $23.6 millio

ating expense

tions through

anks and $104

ss 48 states.  

ted thereafte

ing in SBLF ha

small busines

business lend

rter.

encompass ban

mber 31, 2010.  

change in small

d June 30, 2010.

 

6(2)  

nd their succ

bs Act of 201

capital to qua

ourage small b

nesses to wo

ation.   

Act, which dire

on all project

ents and cont

the estimate

am as of Mar

expected to ge

billion, exclud

n in fiscal yea

e budget of $2

h the SBLF pro

4 million in 51

The initial SB

r until the pro

ad made impo

sses and loca

ing by $4.8 b

nks, thrifts, and b

  

business lending

.

 

ess is a critica

10 (the Act), t

alified comm

business lend

rk together, h

ects the Secre

ted costs and

tractors, and a

d cost of the

rch 31, 2012.

enerate a pos

ding administ

ar 2012 opera

25.6 million a

ogram.  Thes

1 CDLFs.  Coll

BLF funding o

ogram’s Sept

ortant progre

l economies a

illion over a $

bank and thrift h

g is the average

al component

he Small Busi

unity banks1

ding.  The pur

help create jo

etary of the

d liabilities, al

all transactio

program’s

sitive return o

trative costs.

ating expense

as presented

e amounts in

ectively, thes

ccurred on Ju

ember 27, 20

ess in increas

across the na

$36.0 billion

holding compan

of the amounts

t of

iness

and

pose

obs,

l

ns

of

In

es for

in the

nclude

se

une

011

ing

tion.  

ies

s that
Treasury c

return of

calculatio

Treasury e

(FCRA) me

with the e

subsidy ra

forecaste

Per FCRA

value bas

cumulativ

participan

SBLF inve

Operatin

Treasury i

while ach

for fiscal y

the costs

applicatio

2012, rep

participat

accounts,

The figure

Descriptio

                  

3 The foreca

percentage

the historica

Original e

President'

currently esti

$84 million fo

n of the estim

estimated the

ethodology u

expected futu

ate of 7.24 pe

d cumulative

requirement

is. Assumptio

ve default rat

nts’ dividend,

stments.  

ng Expenses

is committed

ieving the pro

year 2011, re

of establishin

ons, and fund

orted herein,

ting institutio

and managin

es shown in th

ons of operat

                       

asted cumulative

of all SBLF inves

al performance

estimate

's Budget for fi

mates that th

or the Treasu

mated cost of

E

e program’s b

sing actual pr

ure cash flows

ercent.  The c

default rate

s, the lifetime

ons used to es

e for program

interest, and

to implemen

ogram’s obje

ported in the

ng the SBLF p

ing investmen

, primarily ref

ns, reporting

ng the portfo

he following t

ing expenses

                   

e default rate re

stments.  The rat

of institutions ra

scal year 2013

he investmen

ry General Fu

f SBLF investm

Estimated Cos

(Doll

budget cost in

rogram data f

s, results in a

urrent estima

(i.e., lost prin

e cost and su

stimate futur

m participants

d other payme

nting the SBLF

ctives of enco

e previous Cos

rogram office

nt transaction

flect the costs

on program

lio and the di

table reflect o

follow the ta

presents the pro

te is estimated b

ated by the majo

S

3

3

nts made thro

und.  The figu

ments in the P

st of SBLF Inv

lars in millions)

n conformanc

for fiscal year

subsidy rate

ate of project

ncipal investm

bsidy rate of

e cash flows i

s, (2) the cash

ents, and (3)

F in a cost‐eff

ouraging sma

st Report pub

e, conducting

ns.  The proje

s of monitori

performance

sposition of s

operating exp

able on the ne

ojected investm

based on the fin

or ratings agenc

Subsidy Rate

7.24%

‐2.08%

 

ough SBLF wil

ures in the fol

President’s Bu

vestments

ce with the Fe

r 2011.  The f

of ‐2.08 perc

ted lifetime sa

ments) of 4.29

the SBLF pro

include, but a

h flows receiv

Treasury’s co

fective manne

all business le

blished in Feb

g outreach to

ected operati

ng the perfor

e and expense

securities pur

penses incurr

ext page.

ent amounts no

nancial condition

ies.

Projecte

Investmen

 

l generate a l

lowing table

udget for fisc

ederal Credit

fiscal year 201

cent compare

avings incorp

9 percent.3

gram is estim

are not limite

ved by Treasu

ost of raising f

er to protect

nding.  The o

bruary 2012, p

potential app

ng expenses

rmance and c

es, maintainin

rchased.   

red as of Mar

ot repaid by prog

n of program par

ed/Actual

t Amount

17,399

4,028

lifetime posit

reflect Treas

cal year 2013.

Reform Act

11 data, com

ed to an origin

porates a

mated on a pr

ed to: (1) the

ury from the

funds to mak

taxpayer inte

operating exp

primarily refle

plicants, revie

for fiscal year

compliance of

ng program

ch 31, 2012.

gram participant

rticipants relativ

Projected Lif

Cost (Sav

1

ive

ury’s

  

bined

nal

esent

ke

erests

enses

ected

ewing

r

f

ts as a

ve to

fetime

vings)

1,260

(84)
On Septem

staffed pr

and progr

expenditu

budget of

$33.3 mill

Travel exp

monitorin

Descriptio

Office of t

 Le

SB

co

 C

re

p

 A

an

la

Salaries and

Travel

Contracts an

Legal su

Custodia

Asset ma

Internal

Office of

Other (e

Subtotal (con

Total

[1] Representst

out expenditur

[2]Includes act

[3]Includes all f

[4]Includes all f

mber 27, 201

rimarily to mo

ram activities

ures represen

f $54.6 million

lion.   

penses in fisc

ng the compli

ons of costs re

the Inspector

egal Support:

BLF securities

osts are volum

ustodian and

espect to SBL

rocessing for

Asset Manage

nd applicable

argely volume

d benefits

nd other

pport

an and infrastruct

anagers

controls

f the Treasury Insp

equipment, supplie

ntracts and other)

the total budgeted exp

res by some ofthese lin

tual expendituresfrom

financial commitmen

financial commitmen

SBLF O

11, the SBLF p

onitor, manag

.  Treasury’s c

nts a 57% redu

n and a 29% r

al year 2012

ance of the S

elated to lega

r General (OIG

:  These expe

s and other tr

me‐dependen

d Infrastructu

F securities a

SBLF particip

ers:  These exp

e market rese

e‐ and activity

ture provider

pector General

es, rent)

)

pendituresfor the SBL

ne items.

m the start offiscal ye

nts, obligations, and e

nts, obligations, expe

Operating Ex

program’s cor

ge, and repor

current proje

uction in ann

reduction fro

relate primar

SBLF participa

al support, fin

G) are include

nses are for l

ransactions re

nt.  

ure Provider:

nd document

pants.  These

penses relate

arch regardin

y‐dependent.

Expe

fiscal y

4,

21,

25,

LF program in fiscal y

ear 2012 (10/1/11)thr

expendituresfrom the

enditures, and project

4

penses for Fi

e investment

rt on these inv

ection of incur

ual expenditu

m the progra

rily to asset m

nts with the

nancial agents

ed here:

egal services

elated to the

These expen

ts, outreach t

costs are larg

e to financial a

ng the commu

[1]

enditures

year 2012

budgeted

Actua

119,000

30,000

n/a

n/a

n/a

n/a

n/a

n/a

441,000

590,000

ear 2012 per the 2013

rough 3/31/12.

e start offiscal year 20

tionsfrom the start of

 

scal Year 201

t activities we

vestments an

rring $23.6 m

ures from the

am’s fiscal yea

management,

program term

s, internal co

incurred in c

management

nses relate to

to participatin

gely volume‐

analysis and m

unity banking

[2]

l expenditures

as of 3/31/12

2,213,338

8,535

0

2,366,250

767,475

586,031

449,036

110,579

4,279,370

6,501,243

3 President's Budget.

012 (10/1/11)throug

ffiscal year 2012 thro

 

12

ere completed

nd related par

million in oper

e program’s f

ar 2011 actua

internal cont

ms.   

ntrols, and th

connection w

t of the inves

bank custod

ng institution

and activity‐d

monitoring o

g sector.  The

[

Commitment

obligations, an

expenditure

as of 3/31/1

2,213,33

9,80

98,00

6,225,00

1,125,25

2,364,52

4,343,64

1,525,95

15,584,37

17,807,51

Note: The 2013 Presid

gh 3/31/12.

ugh 3/31/12.

d.  SBLF is no

rticipant lend

rating

iscal year 201

al expenditure

trols, and

he Treasury’s

ith repurchas

stments.  The

ial services w

ns, and payme

dependent.

f SBLF partici

se costs are

3]

ts,

nd

es

12

Expen

fiscal yea

pro

8 4,11

2 3

0 14

0 8,05

0 3,00

9 2,36

2 4,34

0 1,54

1 19,45

1 23,60

dent's Budget did not

w

ding

11

es of

ses of

se

with

ents

pants

[4]

ditures

ar 2012

ojected

19,000

30,000

47,000

56,572

01,429

64,529

43,642

40,950

54,122

03,122

break
 In

co

in

d

is

 O

Tr

th

to

nternal Contr

ontrols assoc

ncludes work

atabases, and

s not volume‐

Office of the T

reasury’s OIG

he SBLF no les

otal of $449,0

rols:  These ex

iated with set

performed b

d other docum

dependent.

Treasury Insp

G for audits of

ss than two t

036 was spent

xpenses relat

tting up the a

y consultants

mentation for

ector Genera

f the SBLF pro

imes each ye

t on audit rel

5

e principally t

asset manage

s regarding th

r monitoring

al:  These exp

ogram.  Per th

ar.  From Oct

ated activitie

 

to the design

ement structu

he developme

and managin

penses reflect

he Act, OIG is

tober 1, 2011

es.  This cost i

 

n of processes

ure for the SB

ent of proced

ng SBLF invest

t reimbursem

s required to i

1 through Ma

s not volume

s and interna

BLF.  This activ

ures, informa

tments.   This

ents to the

issue reports

rch 31, 2012,

e‐dependent.

l

vity

ation

s cost

on

a