June 2, 2009
Authored by: Robert Klingler
On May 21, 2009, the Treasury Department (without any fanfare) published a FAQ on the expansion of the TARP Capital Purchase Program for small community banks. The FAQ expands slightly on Secretary Geithner’s remarks to the ICBA announcing the expansion.
Highlights of the FAQ include:
- Available to banks with less than $500 million in total assets (inclusive of all subsidiary banks for multiple bank holding companies);
- Deadline to apply is November 21, 2009;
- Maximum Capital Purchase Program investment is 5% of risk weighted assets;
- Institutions that currently have preliminary approval for 3% can seek expedited approval to receive up to 5%;
- No additional warrants need be issued beyond the warrants required for the investment of up to 3% of risk weighted assets; and
- Institutions will have six months from preliminary approval (but no later than December 31, 2009) to decide whether or not to accept the investment.