Office of Financial Stability

Program Summary

(Dollars in billions)

As of December 31, 2012

Cumulative

Obligated

Cumulative

Disbursed

Cumulative 

Outstanding 

(Includes 

Realized 

Losses)

Total 

Cumulative

Income

Total 

Cumulative

Repayments

Total 

Estimated 

Lifetime 

Costs

 

Bank Support Programs $250 $245 $8 $34 $268 ($23)

Credit Market Programs $23 $19 $4 $2 $18 ($3)

AIG Investment Program (AIG) $68 $68 $0 $1 $55 $15 *

Automotive Industry Financing 

Program 

$80 $80 $29 $6 $46 $20

Treasury Housing Programs $46 $6 N/A N/A N/A $38

Total for TARP Programs $466 $418 $40 $43 $387 $48

Additional AIG Common Shares Held 

by Treasury

N/A N/A N/A $18 $18 ($18)*

Total for TARP Programs and 

Additional AIG Shares $466 $418 $40 $61 $405 $30

*If all Treasury AIG Investments are combined, we currently estimate a net loss of $2.3 billion on those shares.

Summary and Explanation of Programs

The Emergency Economic Stabilization Act 

(ESSA) was enacted in October 2008 in 

response to one of the worst financial crises in 

United States history. To address the crisis, 

EESA established the Office of Financial 

Stability (OFS) within the Treasury 

Department to implement the Troubled Asset 

Relief Program (TARP). EESA vested 

authority in the Secretary of the Treasury to 

“purchase, and to make and fund commitments 

to purchase, troubled assets from any financial 

institution, on such terms and conditions as are 

determined by the Secretary.” OFS supports 

Treasury’s strategic goal to repair and reform 

the financial system and support recovery in 

the housing market. 

The Dodd-Frank Wall Street Reform and 

Consumer Protection Act (Dodd-Frank Act) 

enacted on July 21, 2010, reduced the TARP 

authority to purchase troubled assets to $475 

billion from an original $700 billion; required 

that repayments of amounts invested under 

TARP cannot be used to increase the purchase 

authority and are dedicated to reducing the 

federal debt; and prohibited new obligations 

for any program or initiative that was not 

already initiated prior to June 25, 2010. 

As a result of improved financial conditions 

and careful stewardship of the program, the 

ultimate cost to the taxpayers of TARP 

investments has dropped from the FY 2009 

estimate of $341 billion to $48.57 billion as of 

December 31, 2012 ($30 billion if Treasury’s 

non-TARP AIG receipts are included). 

In FY 2014, OFS plans to obligate $201

million for administrative expenses and use 

126 FTE, a decrease of $105 million and 35

FTE from the FY 2013 estimates.

Legislative Proposals

OFS has no legislative proposals for FY 2014.
Description of Performance

Bank Support Programs

Capital Purchase Program (CPP)

The CPP - OFS’s largest program - was 

launched to stabilize and build confidence in 

the financial system by bolstering the capital 

position of viable institutions. Treasury

ultimately provided a total of $205 billion in 

capital to 707 institutions in 48 states, 

including more than 450 small and community 

banks and 22 Community Development 

Financial Institutions (CDFIs). 

As of December 31, 2012, the CPP has 

generated $26.48 billion in net proceeds for 

taxpayers with 212 institutions remaining in 

the program for a total of $7.4 billion in capital 

outstanding.

Targeted Investment Program (TIP)

OFS established the TIP in December 2008 to 

prevent a loss of confidence in critical 

financial institutions, which could impair 

broader financial markets, and undermine the 

overall economy. Treasury invested $20 

billion each in Bank of America and Citigroup 

under the TIP. As of December 31, 2009, the 

TIP was closed. Both Citigroup and Bank of 

America fully redeemed the Government's TIP 

investments of $40 billion plus $3 billion in 

dividends and $1.43 billion in warrants during 

2010, which generated $4.43 billion in net 

proceeds for taxpayers. 

Asset Guarantee Program (AGP)

OFS established the AGP which was used in 

conjunction with the TIP to support the value 

of certain assets held by Bank of America and 

Citigroup by agreeing to absorb a portion of 

the losses on those assets. The AGP closed in 

December 2009 without paying any claims and 

has generated $4.13 billion in net proceeds for 

taxpayers. 

Community Development Capital Initiative 

(CDCI)

To help mitigate the adverse impact that the 

financial crisis had on communities 

underserved by traditional banks, Treasury 

launched CDCI to provide capital to banks, 

thrifts, and credit unions that qualified as 

Community Development Financial 

Institutions (CDFIs) in February 2010. Under 

this program, CDFI banks and thrifts received 

investments of capital with an initial dividend 

or interest rate of two percent, compared to the 

five percent rate offered under the CPP. 

Treasury invested a total of $570 million in 84 

CDFIs. As of December 31, 2012, six 

institutions have fully repaid their investment 

and one has been taken into receivership. The 

program has approximately $523 million in 

capital outstanding. 

Credit Market Programs

Public-Private Investment Program (PPIP)

Treasury launched PPIP to support credit 

market functioning and facilitate price 

discovery in the markets for commercial and 

residential mortgage financing. Using TARP 

funds alongside equity capital raised from 

private investors, PPIP was designed to 

generate a significant purchasing power and 

demand for RMBS and CMBS. Treasury 

originally committed approximately $22.1 

billion of equity and loans to the nine PublicPrivate Investment Funds (PPIFs). As of 

December 31, 2012, the PPIFs could no longer 

draw capital or make new investments. Five of 

the nine funds have now been effectively 

wound down and four funds remain in the 

program. Future debt, equity and interest 

payments from the outstanding PPIFs will 

provide an additional return for taxpayers. As 

of December 31, 2012, $3.6 billion remained 

outstanding in the program.
Term Asset-Backed Securities Loan Facility 

(TALF)

The TALF was a joint Federal ReserveTreasury program that was designed to restart 

the asset-backed securities (ABS) markets that 

provide credit to consumers and small 

businesses, which had ground to a virtual 

standstill during the early months of the 

financial crisis. 

Treasury originally committed to provide $20 

billion in the form of subordinated debt to 

TALF, LLC to support a $200 billion loan 

portfolio. This commitment was reduced twice 

to $4.3 billion in June 2010 and $1.4 billion in 

June 2012 as the outstanding loan portfolio 

decreased. On January 15, 2013, the 

commitment was eliminated. On February 6, 

2013, Treasury was fully repaid all 

disbursements and will continue to receive 

residual payments in the future. 

Small Business Administration (SBA) 7(a) 

Securities Purchase Program 

In March 2010, OFS announced the SBA 7(a) 

Securities Purchase Program to encourage

financial institutions to increase small business 

lending and to ensure that credit flows to 

entrepreneurs and small business owners. 

Treasury invested in a total of 31 SBA 7(a) 

securities with a value of approximately $367 

million (excluding purchased accrued interest) 

between March and September 2010. In 

January 2012, Treasury concluded winding 

down the program in total, collecting $376 

million through sales, principal payments, 

interest payments over the life of the program, 

representing cash collections of approximately 

$9 million more than its original investment of 

$367 million.

American International Group, Inc. (AIG) 

Investment Program

During the financial crisis, the federal 

government provided assistance to prevent the 

collapse of AIG. This assistance came from 

the Federal Reserve Bank of New York 

(FRBNY) and Treasury. The consequences of 

AIG failing at that time and in those 

circumstances would have been catastrophic to 

American families, businesses, and the larger 

economy. Therefore, the government took 

action to protect the U.S. financial system. 

The government's overall support for AIG 

peaked at approximately $182 billion. That 

amount included $70 billion that Treasury 

committed through TARP, and $112 billion 

committed by the FRBNY. As a result of the 

combined efforts of AIG, Treasury, and the 

FRBNY, the government’s support for AIG 

was substantially reduced during 2012 and 

taxpayers began to see a positive return on 

their overall investment in the company. As of 

December 31, 2012, the $182 billion 

committed to stabilize the company had been 

fully recovered – plus an additional positive 

return of $22.7 billion. Treasury continued to 

hold warrants to purchase approximately 2.7 

million shares of AIG common stock. On 

March 1, 2013, AIG purchased the remaining 

warrants and Treasury has fully exited its 

investment in AIG.

Automotive Industry Financing Program 

(AIFP)

OFS established the AIFP on December 19, 

2008, to help prevent a significant disruption 

to the American automotive industry, which 

would have posed a substantial disruption to 

financial market stability and would have had 

a negative effect on the economy. Under the 

AIFP, OFS allocated $82 billion, of which 

almost $80 billion was disbursed and $2 

billion was cancelled, in emergency loans and 

other investments to General Motors 

Corporation (GM), Chrysler LLC (Chrysler), 

and their financing affiliates.

Treasury provided approximately $50 billion 

of TARP funds to GM in 2008 and 2009. By 

the end of 2012, Treasury had sold more than 
two-thirds (612 million) of the 912 million 

shares of GM common stock it originally held. 

On December 19, 2012, OFS announced that 

GM intended to purchase 200 million shares of 

GM common stock and that Treasury intended

to fully exit its remaining GM investment 

within 12-15 months, subject to market 

conditions. GM purchased the common stock 

on December 21, 2012, at $27.50 per share (10 

percent above the three-day average of the 

previous closing prices) resulting in proceeds 

received of $5.5 billion. In January 2013, OFS 

began the process of selling its shares into the 

market under a pre-arranged written trading 

plan. 

Treasury committed a total of $12.4 billion to 

Chrysler and Chrysler Financial under TARP. 

In July 2011, Treasury fully exited its 

investment in Chrysler, six years ahead of 

schedule. Of the $12.4 billion disbursed to 

Chrysler under TARP, Treasury recovered 

more than $11.1 billion for taxpayers through 

principal repayments, interest, and cancelled 

commitments. 

As of December 31, 2012, Treasury’s 

outstanding investment in Ally Financial 

(Ally), formerly General Motors Acceptance 

Corporation (GMAC), stood at $13.75 billion, 

having recovered about one-third of the 

original $17.2 billion investment. As Ally 

completes a number of strategic initiatives that 

were previously announced, OFS expects to 

begin monetizing its remaining investment, 

subject to market conditions.

Treasury Housing Programs Under TARP

OFS established two central programs under 

TARP – the Making Home Affordable (MHA) 

program and the Housing Finance Agency 

Innovation Fund for the Hardest Hit Housing 

Markets (HHF) – to help prevent avoidable 

foreclosures and preserve homeownership. 

OFS has also provided support for the Federal 

Housing Administration’s Short Refinance 

Program to assist borrowers who are current 

on their mortgage but owe more than their 

home is worth, in refinancing into an FHAinsured loan.

Making Home Affordable Program (MHA)

MHA includes sub programs that assist 

borrowers in modifying first and second 

mortgages, including benefits for unemployed 

homeowners, as well as modification 

alternatives. Through December 31, 2012, 

there were nearly 1.5 million homeowner 

assistance actions granted through MHA. 

Funds are paid out over the length of the 

modifications, and as of December 31, 2012, 

Treasury disbursed $4.6 billion out of a 

possible $29.9 billion of incentive fees under 

MHA.

Housing Finance Agency (HFA) Hardest-Hit 

Fund

The HFA Hardest-Hit Fund was implemented 

in FY 2010 and provides targeted aid to 

families in the states hit hardest by the housing 

market downturn and unemployment. 

Eighteen states and the District of Columbia 

have developed custom programs targeted to 

address the specific needs and economic 

conditions of their state. There was substantial 

growth in the program in 2012, both in the 

numbers served and the dollars spent. With 

recent program and operational changes made 

by HFAs working closely with Treasury, OFS 

expects the pace of assistance to continue to 

accelerate throughout 2013. As of December 

31, 2012, Treasury disbursed $1.76 billion out 

of a possible $7.6 billion under the HFA 

Hardest-Hit Fund.

Federal Housing Administration (FHA)-

Refinance Program

Treasury also continues to support the Federal 

Housing Administration Short Refinance 

Program. Under this program, eligible 

borrowers who are current on their mortgage 

or complete a trial payment plan but owe more 
than their home is worth, can refinance into an 

FHA-insured loan if the lender writes off at 

least 10 percent of the existing loan. As of 

December 31, 2012, 2,153 loans had been 

refinanced and no claim payments have been 

made under this program. On March 4, 2013, 

OFS reduced the letter of credit facility from

$8.1 billion to $1.0 billion. Due to limited 

take up, reduced defaults, and increased FHA 

program fees Treasury’s cost estimate for this 

program decreased from $8.1 billion to 

approximately $200 million.