Emergency Economic Stabilization Act Programs 

Program Summary by Budget Activity 

(Dollars in Thousands) 

FY 2009 FY 2010 

Purchase 

Cap1 

Obligations2 Purchase 

Cap1

Obligations2

Capital Purchase Program $218,000,000 $58,830,700 $0 $0

Public-Private Investment Program3, 4 $75,000,000 $24,997,500 $0 $0

Systemically Significant Failing Institutions 

Program 

$70,000,000 $57,946,000 $0 $0

Consumer and Business Lending Initiative3 

TALF 1.0 $20,000,000 $6,666,000 $0 $0

TALF Asset Expansion $35,000,000 $11,665,500 $0 $0

TALF for Legacy Securities $25,000,000 $8,332,500 $0 $0

Unlocking SBA Lending Markets $15,000,000 $4,999,500 $0 $0

Home Affordable Modification Program $50,000,000 $50,000,000 $0 $0

Targeted Investment Program $40,000,000 $19,540,000 $0 $0

Automotive Industry Financing Program and 

Auto Supplier Support Program 

$35,400,000 $18,235,070 $0 $0

Asset Guarantee Program5 $12,500,000 ($752,500) $0 $0

Estimate of Redemption ($25,000,000

)

NA $0 $0

Capital Assistance and Other TBD Programs3 $129,100,000 $43,029,030 $0 $0

Total $700,000,000 $303,489,300 $0 $0 1

Amount applied to the Section 115 Purchase Cap. 

2

Estimated program costs or savings do not include $1,998,749,041 in estimated modification costs due to revisions of 

the initial loan and equity purchase terms. 

3

Subsidy rate will be revised from the current 33.33% placeholder. 4

 The TALF for Legacy Securities program categorized under the Consumer and Business Lending Initiative in this 

table will be implemented under the Public-Private Investment program. 

5

 Loan Guarantees are expected to be $419 billion, but Treasury will be limited to a $12.5 billion second loss. 

Explanation of Budget Estimate 

_________________________________ 

The Office of Financial Stability (OFS) 

budget includes funding to carry out the 

authorities delegated to the OFS by the 

Secretary of the Treasury to implement 

the Troubled Assets Relief Program 

(TARP). These authorities were vested 

to the Treasury Secretary by the 

Emergency Economic Stabilization Act 

of 2008 (EESA), which authorized the 

Secretary of the Treasury to establish the 

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.” 

The EESA further authorized that the 

Secretary implement the TARP through 

an Office of Financial Stability. 

The purposes of the EESA are to — 

(1) immediately provide authority and 

facilities that the Secretary of the 

Treasury can use to restore liquidity and 

stability to the financial system of the 

United States; and 

(2) ensure that such authority and such 

facilities are used in a manner that — 

Department of the Treasury - Budget in Brief FY 2010 Page 69
(A) protects home values, college 

funds, retirement accounts, and 

life savings; 

(B) preserves homeownership 

and promotes jobs and economic 

growth; 

(C) maximizes overall returns to 

the taxpayers of the United 

States; and 

(D) provides public 

accountability for the exercise of 

such authority. 

Purpose of the Program 

Since the passage of EESA in October 

2008, the OFS has implemented a 

number of programs aimed to stabilize 

the financial system and restore the flow 

of credit to consumers and businesses. 

These include: 

Capital Purchase Program 

The Capital Purchase Program (CPP) 

was created to stabilize the financial 

system by building the capital base of 

healthy, viable U.S. financial 

institutions, which in turn will increase 

the capacity of those institutions to lend 

to businesses and consumers and support 

the economy. Under this program, 

Treasury is purchasing senior preferred 

shares from qualifying U.S. controlled 

banks, savings associations, and certain 

bank and savings and loan holding 

companies. 

Systemically Significant Failing 

Institution 

The Systemically Significant Failing 

Institution program (SSFI) is intended to 

provide stability and prevent disruptions 

to financial markets from the failure of a 

systemically significant institution. The 

Treasury will determine the eligibility of 

participants on a case-by-case basis. In 

determining whether an institution is 

systemically significant and at 

substantial risk of failure, Treasury may 

consider, among other things: 

1. The extent to which the 

failure of an institution could 

threaten the viability of its 

creditors and counterparties 

because of their direct exposures 

to the institution; 

2. Whether the institution is 

sufficiently important to the 

nation’s financial and economic 

system; or 

3. The extent and probability of 

the institution’s ability to access 

alternative sources of capital and 

liquidity. 

Targeted Investment Program 

The Targeted Investment Program (TIP) 

is designed to prevent a loss of 

confidence in financial institutions that 

could result in significant market 

disruptions, threatening the financial 

strength of similarly situated financial 

institutions, impairing broader financial 

markets, and undermining the overall 

economy. Treasury will consider 

institutions as candidates, based on a 

number of factors including the threats 

posed by destabilization of the 

institution, the risks caused by a loss of 

confidence in the institution, and the 

institution’s importance to the nation’s 

economy. 

Automotive Industry Financing 

Program 

 The Automotive Industry Financing 

Program (AIFP) is intended to prevent a 

significant disruption of the American 

automotive industry, which would pose a 

systemic risk to financial market 

Department of the Treasury - Budget in Brief FY 2010 Page 70
stability and have a negative effect on 

the economy of the United States. The 

program requires participating 

institutions to implement plans that will 

achieve long-term viability. 

Asset Guarantee Program 

The Asset Guarantee Program (AGP) 

provides guarantees for assets held by 

systemically significant financial 

institutions that face a risk of losing 

market confidence due in large part to a 

portfolio of distressed or illiquid assets. 

The AGP will be applied with extreme 

discretion in order to improve market 

confidence in the systemically 

significant institution and in financial 

markets broadly. Treasury does not 

anticipate that the program will be made 

widely available and notes that the 

EESA requires that premiums under 

section 102 be set to ensure that 

taxpayers are fully protected. 

The Consumer and Business Lending 

Initiative (CBLI) 

Term Asset-Backed Securities Loan 

Facility

The creation of the Term Asset-Backed 

Securities Loan Facility (TALF) was 

announced in November 2008 as a 

Federal Reserve facility to which 

Treasury will provide $20 billion in 

funding through the TARP. The Federal 

Reserve will lend on a non-recourse 

basis to holders of certain AAA-rated 

asset-backed securities (ABS) secured 

by newly and recently originated 

consumer and small business loans. 

TALF loans will have a term of three 

years and will be secured solely by 

eligible collateral. Haircuts (a 

percentage reduction used for collateral 

valuation) will be determined based on 

the riskiness of each type of eligible 

collateral and the maturity of the eligible 

collateral pledged to the Federal 

Reserve. The haircuts will provide 

additional protection to taxpayers by 

protecting the Federal Government from 

loss. 

Initiative to Unlock Credit for Small 

Businesses

In March, Treasury announced a 

program to unlock credit for small 

businesses as part of the Consumer and 

Business Lending Initiative. As part of 

the program, Treasury will make up to 

$15 billion in TARP funds available to 

make direct purchases to unlock the 

secondary market for the governmentguaranteed portion of SBA 7(a) loans as 

well as first-lien mortgages made 

through the 504 program. These 

purchases, combined with higher loan 

guarantees and reduced fees 

implemented under the American 

Recovery and Reinvestment Act of 

2009, will help provide lenders with the 

confidence that they need to extend 

credit, knowing that if they make an 

SBA loan, they will be able to sell it and 

access the liquidity necessary to do 

further lending. 

Making Home Affordable 

Making Home Affordable includes two 

separate programs: the Home Affordable 

Refinance Program and the Home 

Affordable Modification Program. 

Together, these programs will assist as 

many as nine million homeowners 

making a good-faith effort to stay 

current on their mortgage payments and 

will also work to prevent the destructive 

impact of foreclosures on families and 

communities. 

Department of the Treasury - Budget in Brief FY 2010 Page 71
Capital Assistance Program 

The Capital Assistance Program (CAP) is 

designed to ensure the continued ability of 

U.S. financial institutions to lend to 

creditworthy borrowers in the face of a 

weaker than expected economic 

environment and larger than expected 

potential losses. The CAP consists of two 

elements aimed at restoring confidence in 

the conditions of the U.S. banking system: a 

supervisory exercise and a new capital 

access program for qualifying financial 

institutions. 

Public-Private Investment Program 

To address the challenge of legacy assets, 

Treasury – in conjunction with the FDIC 

and the Federal Reserve – is announcing the 

Public-Private Investment Program (PPIP) 

as part of its efforts to repair balance sheets 

throughout our financial system and ensure 

that credit is available to the households and 

businesses, large and small, that will help 

drive us toward recovery. 

Legislative Proposals 

____________________________________ 

The TARP has no legislative proposals in 

FY 2010. 

Performance Measures 

_________________________________ 

Performance metrics are currently in 

development for the Troubled Assets Relief 

Programs and will be available by FY 2010. 

Department of the Treasury - Budget in Brief FY 2010 Page 72