Treasury established several programs under TARP to help stabilize the U.S. financial system, restart economic growth, and prevent avoidable foreclosures.
Although Congress initially authorized $700 billion for TARP in October 2008, that authority was reduced to $475 billion by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Of that, the following amounts were committed through TARP's five program areas:
- Approximately $250 billion was committed in programs to stabilize banking institutions ($5 billion of which was ultimately cancelled).
- Approximately $27 billion was committed through programs to restart credit markets.
- Approximately $82 billion was committed to stabilize the U.S. auto industry ($2 billion of which was ultimately cancelled).
- Approximately $70 billion was committed to stabilize American International Group (AIG) ($2 billion of which was ultimately cancelled).
- Approximately $46 billion was committed for programs to help struggling families avoid foreclosure, with these expenditures being made over time.
The Emergency Economic Stabilization Act of 2008 established OFS within the Office of Domestic Finance at the Department of the Treasury to implement TARP. OFS was not envisioned as a permanent organization. The authority to make new commitments through TARP ended October 3, 2010, at which time Treasury shifted focus to the orderly wind-down of TARP. As of September 30, 2023, all TARP programs have closed, and there are no remaining troubled assets held by OFS. During fiscal year 2023, OFS completed the wind down of its remaining housing programs under TARP and sold its last troubled assets from the Capital Purchase Program and Community Development Capital Initiative. This will be the last set of financial statements produced for TARP as there is no longer a legal requirement to produce future financial statements (12 U.S.C. § 5226(e)). OFS is also dissolving as an entity with only administrative functions remaining. Under the direction of Treasury, OFS will use fiscal year 2024 appropriations to carry out these administrative functions and completely wind down the entity. Further, Treasury will continue to monitor TARP’s Fund Balance with Treasury until the funding is transferred to the General Fund.
As of September 30, 2023, the total amount disbursed for TARP programs was $443.5 billion and OFS collected $425.5 billion (or $443.1 billion if including the $17.5 billion in proceeds from the additional Treasury American International Group, Inc. [AIG] shares) through repayments, sales, dividends, interest, and other income. After considering the interest expense of $13.1 billion, the net cost of TARP programs was $31.1 billion.
Table 1 provides a financial summary for TARP programs since its inception on October 3, 2008, through September 30, 2023.
| Table 1: TARP Summary1 | |||||||
|---|---|---|---|---|---|---|---|
| From TARP Inception through September 30, 2023 | |||||||
| (Dollars in millions) | |||||||
| Purchase Price or Guarantee Amounts | Total $ Disbursed | Investment Repayments | Write-offs and Losses4 | Received from Investments | Interest Expense | Net Cost (Income) | |
| Programs Closed During Fiscal Year 2023 | |||||||
| Bank Support Programs | |||||||
| Capital Purchase Program2 | $ 204,895 | $ 204,895 | $ (199,675) | $ 5,220 | $ (27,106) | $ 5,579 | $ (16,307) |
| Community Development Capital Initiative | 570 | 570 | (527) | 43 | (67) | 91 | 68 |
| Sub-total for Investment Programs | 205,465 | 205,465 | (200,201) | 5,263 | (27,173) | 5,670 | (16,240) |
| Treasury Housing Programs under TARP | 31,447 | 31,447 | - | - | - | (1) | 31,446 |
| Sub-total | $ 236,912 | $ 236,912 | $ (200,201) | $ 5,263 | $ (27,173) | $ 5,669 | $ 15,207 |
| Programs Closed in Fiscal Years 2022 or Prior | |||||||
| Bank Support Programs | |||||||
| Targeted Investment Program | $ 40,000 | $ 40,000 | $ (40,000) | $ - | $ (4,432) | $ 433 | $ (3,998) |
| Asset Guarantee Program | 5,000 | - | - | - | (4,126) | 125 | (4,001) |
| Credit Market Programs | |||||||
| Public Private Investment Program | 18,625 | 18,625 | (18,625) | - | (3,852) | 1,118 | (2,735) |
| Term Asset-Backed Securities Loan Facility | 100 | 100 | (100) | - | (685) | 79 | (606) |
| SBA 7(a) Securities Purchase Program | 367 | 367 | (363) | 4 | (13) | 4 | (4) |
| Other Programs | |||||||
| Automotive Industry Financing Program | 79,692 | 79,692 | (63,037) | 16,656 | (7,589) | 3,004 | 12,071 |
| American International Group Investment Program3 | 67,835 | 67,835 | (54,350) | 13,485 | (959) | 2,652 | 15,179 |
| Sub-total | $ 211,620 | $ 206,620 | $ (176,475) | $ 30,145 | $ (21,654) | $ 7,414 | $ 15,905 |
| Total for TARP Programs | $ 448,532 | $ 443,532 | $ (376,676) | $ 35,407 | $ (48,827) | $ 13,083 | $ 31,111 |
| Note: Figures may not foot due to rounding. 1 This table shows TARP activity for the period from inception through September 30, 2023, 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 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 financial statements. | |||||||
Table 2 provides information on how OFS’s ultimate lifetime cost of TARP has changed over time.
| Table 2: Lifetime TARP Costs (Income)1 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in billions) | |||||||||||||||
Program | Lifetime Cost (Income) as of September 30 | ||||||||||||||
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
| Bank Support Programs | |||||||||||||||
| Capital Purchase Program | ($14.6) | ($11.2) | ($13.0) | ($14.9) | ($16.1) | ($16.1) | ($16.3) | ($16.3) | ($16.3) | ($16.3) | ($16.3) | ($16.3) | ($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) | (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) | (4.0) | (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 | 0.1 | 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) | (2.7) | (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) | (0.6) | (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 | 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 | 12.2 | 12.1 | 12.1 | 12.1 | 12.1 | 12.1 |
| American International Group Investment Program3 | 56.8 | 36.9 | 24.3 | 15.3 | 15.2 | 15.2 | 15.2 | 15.2 | 15.2 | 15.2 | 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) | (0.3) | (0.3) | (0.3) | (0.3) | (0.3) | (0.3) |
| Treasury Housing Programs under TARP | 50.0 | 45.6 | 45.6 | 45.6 | 37.7 | 37.4 | 37.4 | 34.7 | 32.6 | 32.5 | 32.8 | 32.4 | 32.3 | 32.2 | 31.4 |
| Total | $124.1 | $77.7 | $70.2 | $59.7 | $40.3 | $37.5 | $37.2 | $34.5 | $32.3 | $32.3 | $32.4 | $32.1 | $32.0 | $31.8 | $31.1 |
| Note: Figures may not foot due to rounding. | |||||||||||||||
| 1 Program costs (+) or income (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). | |||||||||||||||
TARP Programs
Auto IndustryTARP helped prevent the collapse of the American auto industry, saving more than a million American jobs. | Bank Investment ProgramsTARP helped stabilize America's banking system during the financial crisis. |
Credit Market ProgramsTARP helped restart the secondary credit markets which are essential to keeping credit flowing to households and businesses. | Executive CompensationTreasury issued standards governing executive compensation at financial institutions that received assistance under TARP. These standards are implemented and are overseen by the Office of the Special Master. |
HousingTARP helped prevent avoidable foreclosures and keeps families in their homes. | Investment in AIGThe Federal Reserve and Treasury took action to stabilize AIG because its failure during the financial crisis would have had a devastating impact on our financial system and the economy. |