Emergency Economic Stabilization Act Programs

Program Summary

Dollars in Billions

As of November 30, 2011

Cumulative

Obligated

Cumulative

Disbursed

Cumulative 

Outstanding 

(Includes 

Realized 

Losses)

Total 

Cumulative

Income

Total 

Cumulative

Repayments

Total 

Estimated 

Lifetime 

Costs

As of 

11/30/11

Bank Support Programs $250 $245 $18 $33 $225 ($21)

Credit Market Programs $27 $18 $17 $1 $2 ($3)

AIG Investment Program (AIG) $68 $68 $50 $0 $16 $22 *

Automotive Industry Financing 

Program $80 $80 $37 $5 $35 $24 

Treasury Housing Programs $46 $3 N/A N/A N/A $46 

Total for TARP Programs $470 $414 $121 $40 $278 $68 

Additional AIG Common 

Shares Held by Treasury N/A N/A N/A N/A N/A ($14) *

Total for TARP Programs and 

Additional AIG Shares $470 $414 $121 $40 $278 $54 

* If all Treasury AIG Investments are combined, we currently estimate a net loss of $8.8 billion on those shares.

Summary and Explanation of Programs

The Emergency Economic Stabilization Act 

(EESA) 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 from 

$700 billion to $475 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. 

Over the past three years, emergency actions 

taken through TARP and other financial 

stability initiatives have helped stabilize the 

financial sector; unfreeze the markets for 

credit and capital; and bring down the cost of 

borrowing. These actions have helped restore 

confidence in the financial system and restart 

economic growth. The conditions of most 

security markets and large financial 

institutions have improved substantially since 

2008. Borrowing costs for large banks, 

nonfinancial businesses, and state and local 

governments have returned to near normal 

levels. Frozen securities markets have 

reopened. Prices for legacy securities have 

improved. Large banks are better capitalized 

than before the crisis, and restructuring in the 

financial industry is well underway.

As a result of improved financial conditions 

and careful stewardship of the program, the 

ultimate cost to the taxpayer of TARP 

investments has dropped from the FY 2009

estimate of $341 billion to $67.8 billion as of 

November 30, 2011.
In FY 2013, OFS plans to obligate $283

million for administrative expenses and use 

165 FTE, a decrease of $43 million and 42

FTE from the FY 2012 estimates. 

Legislative Proposals

The OFS programs have no legislative 

proposals for FY 2013.

Description of Performance

Bank Support Programs

Capital Purchase Program (CPP)

The CPP was launched to stabilize the 

financial system and build confidence in the 

financial system by bolstering the capital 

position of viable financial institutions. With 

the additional capital, CPP participants were 

better equipped to undertake new lending (or 

reduce lending by less than otherwise would 

have occurred) and absorb write downs and 

charge-offs on loans that were not performing. 

OFS 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 

November 30, 2011, there are 379 institutions 

remaining in the program for a total of $17.06 

billion in capital outstanding.

Targeted Investment Program (TIP)

OFS established the TIP under the TARP in 

December 2008. Through TIP, OFS sought to 

prevent a loss of confidence in critical 

financial institutions, which could result in 

significant financial market disruptions, 

threaten the financial strength of similarly 

situated financial institutions, impair broader 

financial markets, and undermine the overall 

economy. OFS invested $20 billion each in 

Bank of America and Citigroup under the TIP. 

As of December 31, 2009, the TIP was closed 

as part of Treasury’s effort to wind down 

TARP. 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 profits 

for taxpayers.

Asset Guarantee Program (AGP)

Pursuant to section 102 of EESA, OFS 

established the AGP with the objective of 

preserving financial market stability. The 

AGP provided protection against the risk of 

significant losses in pools of assets held by 

Citigroup and Bank of America. The AGP 

helped these institutions maintain the 

confidence of their depositors and other 

funding sources while continuing to meet the 

credit needs of households and businesses. 

The AGP closed in December 2009 without 

paying any claims and generated $3.04 billion 

in revenue for taxpayers.

Community Development Capital Initiative 

(CDCI)

In February 2010, OFS announced the CDCI 

to lower the cost of capital in CDFIs that lend 

to small businesses in the country’s hardest-hit 

communities. CDFI banks and thrifts, which 

target more than 60 percent of their small 

business lending and other economic 

development activities to underserved 

communities, are eligible to receive 

investments of capital with an initial dividend 

rate of 2 percent. CDFIs participated in CPP 

and were in good standing were eligible to 

exchange those investments into this program. 

As of November 30, 2011, OFS has invested 

$570 million in 84 CDFIs. 

Credit Market Programs

Public-Private Investment Program (PPIP)

OFS, the Federal Reserve, and the Federal 

Deposit Insurance Corporation announced the 

PPIP on March 23, 2009. OFS made equity 

and debt investments in newly-formed 

investment vehicles, Public Private Investment 

Funds (PPIF), established by private 

investment managers for the purpose of

purchasing legacy securities. These 

investments ensure that credit is available to 

households and businesses and help restart 
credit markets. As of November 30, 2011, 

OFS has disbursed $17.66 billion out of 

$21.86 billion allocated to the PIPP.

Term Asset-Backed Securities Loan Facility 

(TALF)

The TALF was created by the Federal Reserve 

Board (FRB) to restart the asset-backed 

securitization market by providing low cost 

funding to investors in certain classes of Asset 

Backed Securities (ABS). The TALF’s 

objective was to stimulate investor demand for 

certain types of eligible ABS, specifically 

those backed by loans to consumers and small 

businesses, and ultimately to bring down the 

cost and increase the availability of new credit 

to consumers and businesses. OFS originally 

provided up to $20 billion of TARP funds in 

liquidity and credit protection to the FRB for 

first-losses arising under TALF loans. On July 

20, 2010, OFS’ commitment was reduced to 

$4.3 billion. As of November 30, 2011, OFS 

has experienced no losses under the program.

Small Business Administration (SBA) 7(a) 

Security Purchase Program 

In March 2010, Treasury 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. 

OFS purchased $368.1 million of guaranteed 

securities backed by SBA 7(a) loans (7(a) 

Securities). As of November 30, 2011, OFS

continues to hold 8 SBA 7(a) securities with a 

current face value of approximately $59.1 

million and sold 23 SBA 7(a) securities 

through three Bids Wanted in Competition for 

$271.7 million, which represents total gains 

and income to OFS of $7.5 million.

American International Group, Inc. (AIG) 

Investment Program

In September 2008, AIG - the largest provider 

of conventional insurance in the world, the 

largest issuer of commercial paper, and the 

second largest holder of U.S. municipal bonds 

- was on the brink of failure. To avoid a 

negative impact on global financial and 

insurance markets, the government provided 

financial assistance to AIG, initially in the 

form of loans by the Federal Reserve Bank of 

New York (FRB-NY) and later under TARP. 

At its peak, the government committed 

approximately $180 billion to AIG, with $70 

billion committed by OFS. The government 

has recovered a majority of the funds and is 

working to recover the remaining assistance.

OFS purchased $40 billion in cumulative 

preferred stock from AIG under the TARP, the 

proceeds were used to repay a Federal Reserve 

loan in part. In April 2009, OFS exchanged 

the $40 billion in cumulative preferred stock 

for $41.6 billion in non-cumulative preferred 

stock. OFS also created an additional equity 

capital facility, under which AIG could draw 

up to $29.8 billion as needed in exchange for 

issuing additional preferred stock to OFS.

On September 30, 2010, the Treasury, 

FRBNY, and AIG announced plans for a 

restructuring of the federal government’s 

investments in AIG. The components of the 

capital restructuring plan closed in January 

2011 with OFS receiving 1.092 billion AIG 

common shares and AIG drawing an 

additional $20.3 billion from OFS. Under the 

re-structuring, Treasury received an additional 

allotment of AIG common stock from the trust 

created by the FRBNY that is outside of the 

TARP AIG investments. In February 2011, 

AIG sold two subsidiaries and repaid $2.1 

billion, which reduced OFS’ preferred equity 

interest in the AIG owned Special Purpose 

Vehicles (SPV) from $20.3 billion to $18.2 

billion. In March 2011, AIG repaid OFS an 

additional $6.9 billion. In May 2011, Treasury 

completed the sale of 200 million shares of 

AIG common stock at $29.00 per share for 

$5.8 billion, with $3.8 billion in proceeds to 

Treasury. In August 2011, AIG repaid OFS 

$2.2 billion, including $0.2 billion in preferred 

interest returns recognized as dividends, which 
further reduced OFS’ preferred equity interest 

in the SPVs from $11.3 billion to $9.3 billion. 

As of November 30, 2011, OFS’ remaining 

gross outstanding TARP AIG related 

investments amounted to $49.95 billion, which 

consists of 960 million shares of AIG common 

stock, and approximately $8.15 billion of 

preferred equity interests. Treasury holds an 

additional 495 million AIG common shares. 

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 negatively impacted financial 

market stability and 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 to assist these 

companies through orderly restructurings and 

achieve viability.

In November and December 2010, OFS

received $13.5 billion for the sale of over 400 

million GM shares, reducing OFS’s ownership 

percentage of GM common stock from 60.8

percent to 32 percent. OFS also accepted an 

offer from GM to repurchase $2.1 billion of 

preferred stock, a deal which was closed in 

December 2010. As of September 30, 2011, 

OFS held 500 million shares of common stock 

in General Motors Company (New GM). 

Chrysler has repaid all outstanding debt, and 

OFS has canceled the remaining $2.1 billion 

undisbursed obligation. Fiat paid $560 million 

to OFS for its remaining stake in Chrysler and 

rights under an agreement with the United 

Auto Workers retirement trust pertaining to the 

trust's shares in Chrysler. OFS is unlikely to 

recover the outstanding $1.3 billion lent to 

“old” Chrysler which is in bankruptcy 

liquidation.

Treasury Housing Programs Under TARP

The Treasury Housing Programs under TARP 

assist homeowners who are experiencing 

financial hardships to remain in their homes 

until their financial position improves or they 

relocate to a more sustainable living situation. 

Making Home Affordable Program (MHA)

MHA includes sub programs that assist 

borrowers in refinancing first and second 

mortgages, including benefits for unemployed 

homeowners, as well as modification 

alternatives. In FY 2010, additional programs 

were introduced under MHA: options for 

Federal Housing Administration guaranteed 

loans and expanded second lien benefits. 

Funds are paid out over the length of the 

modifications, and as of November 30, 2011, 

OFS disbursed $2.1 billion out of a possible 

$29.9 billion of incentive fees under MHA.

Housing Finance Agency (HFA) HardestHit Fund

The HFA Hardest-Hit Fund was implemented 

in FY 2010 and provides 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. As of November 30 2011, OFS 

disbursed $672 million out of a possible $7.6 

billion under the HFA Hardest-Hit Fund.

Federal Housing Administration (FHA)-

Refinance Program

The FHA-Refinance Program is a joint 

initiative with the Department of Housing and 

Urban Development which is intended to 

encourage refinancing of existing underwater 

mortgage loans not currently insured by FHA 

into FHA-insured mortgages. As of 

November 30, 2011, 491 loans had been 

refinanced and no claim payments have been 

made under this program.