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GAO-24-107033 1 (2023-12-07)

handle is hein.gao/gaopoo0001 and id is 1 raw text is: TARP-Funded Program Costs TARP's Major Programs EESA originally authorized TARP to purchase or guarantee up to $700 billion in assets. The Dodd- Frank Wall Street Reform and Consumer Protection Act of 2010 reduced that amount to $475 billion. Taken as a whole, the final cost of TARP was significantly less than its original authorization. As of September 30, 2023, the total amount disbursed under TARP-funded programs was $443.5 billion. However, after repayments, sales, dividends, interest, and other income, the lifetime cost of TARP- funded programs was $31.1 billion. While there will be no impact to the net cost, TARP has over $14.2 billion in unused funds that it will return to Treasury at the end of fiscal year 2025. Figure 1 summarizes the lifetime cost of TARP by program. Figure 1: Lifetime Cost of TARP-Funded Programs Total $31A Bilio Source: GAO analysis of Department of the Treasury data. I GAO-24-107033 Note: These program costs do not include cumulative Office of Financial Stability (OFS) administrative costs totaling $2.1 billion from inception through September 30, 2023. OFS will continue to incur costs in fiscal year 2024 as it winds down all remaining administrative matters. aThe AIG Investment Program cost only reflects the Troubled Asset Relief Program (TARP) cost and does not include $17.5 billion in proceeds from the sale of AIG common stock held by the Department of the Treasury outside of TARP. OFS established several programs under TARP to help stabilize the U.S. financial system, restart economic growth, and prevent avoidable foreclosures. Below is a brief summary of the TARP- funded programs and costs. Capital Purchase Program (CPP) CPP was launched in October 2008 to help stabilize the financial system by providing capital to viable financial institutions of all sizes nationwide. Under CPP, OFS received preferred stock or debt, as well as stock warrants, in return for its investment. According to program terms, participating financial institutions were to repay the funds they received, subject to the approval of their regulators. Through CPP, Treasury disbursed a total of $204.9 billion to 707 institutions in 48 states, Puerto Rico, and the District of Columbia. After repayments, sales, dividends, and interest, however, the program resulted in a net gain of $16.3 billion. Community Development Capital Initiative (CDCI) CDCI was created in February 2010 to help viable certified community development financial institutions and the communities they serve cope with the effects of the financial crisis. Under CDCI, 84 financial institutions received investments with an initial dividend or interest rate of 2 percent. To encourage repayment while recognizing the unique circumstances these institutions faced, the program's terms stated that the dividend rate would increase to 9 percent after 8 years. Though CDCI disbursed a total of $570.1 million, the final cost of the program- after repayments, sales, dividends, and interest- was $67.5 million. GAO-24-107033 | Lifetime Cost of TARP Page 1

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