ABA Media Contact: Jeff Sigmund
Phone: (202) 663-5439
Last updated: May 29, 2013
The TARP was a program created by the Emergency Economic Stabilization Act (EESA), which was signed by President Bush on October 3, 2008. It authorized the Treasury Department to spend as much as $700 billion to purchase troubled assets – as the name implies – from financial institutions in order to strengthen the financial sector.
Within days after enactment of EESA, policy shifted to putting capital in U.S. banks and the leaders of nine institutions were called to Washington and "requested" to accept capital injections under a program that became the Capital Purchase Program (CPP). Other TARP programs included the Targeted Investment Program, the Asset Guarantee Program, and those programs designed to rescue the auto industry and insurer AIG.
TARP's bank programs will ultimately provide a profit to the taxpayer of over $22 billion, according to the Special Inspector General. TARP's bank programs, often misperceived as causing losses, have already provided a significant return of 10 percent according to the Congressional Oversight Panel. With the expiration of TARP funding authorization, no new investments can be made. It's important to note that all of TARP's losses originate from non-bank programs.