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10 Year Anniversary of the TARP Capital Purchase Program

October 15, 2018

Authors

Robert Klingler

10 Year Anniversary of the TARP Capital Purchase Program

October 15, 2018

by: Robert Klingler

Ten years ago, on October 13, 2008, the U.S. Treasury Secretary Henry Paulson effectively locked the CEO’s of the nine largest banks in the United States in a conference room and demanded that they accept an investment from the U.S. Government. Although we had front row seats for much of the activity over the ensuing years, reading the New York Times summary of that meeting from the following day still provides a sense of just how shocking all of this was.

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Trapped by TARP – An Update on the Capital Purchase Program

January 30, 2012

Authors

Robert Klingler

Trapped by TARP – An Update on the Capital Purchase Program

January 30, 2012

by: Robert Klingler

On January 26, 2012, the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) released its latest Quarterly Report to Congress.  At 302 pages, I can’t say that it’s recommended reading for anyone, but there are portions of it that may be of significant interest to those in the industry.

One of the central themes of the SIGTARP report is that TARP will continue to exist for years.  In addition to programs designed to support the housing market and certain securities markets that are scheduled to last until as late as 2017, 371 banks remain

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Can We Stop Using the Term Bailout?

April 1, 2011

Authors

Robert Klingler

Can We Stop Using the Term Bailout?

April 1, 2011

by: Robert Klingler

On March 30, 2011, the Treasury announced that the TARP Capital Purchase Program has now generated more money for taxpayers than it originally cost.  Through March 30, 2011, the Treasury had collected, on behalf of the U.S. taxpayers, over$251 billion from the financial institutions that Treasury invested in through repayments, dividends, interest, and other income.

This exceeds the original investment Treasury made in these banks by approximately $6 billion, and Treasury currently estimates that the bank programs under TARP will ultimately provide a lifetime profit of approximately $20 billion to taxpayers.

We have attempted to emphasize the investment nature

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Senate Considering $30 Billion Small Business Lending Fund for Community Banks

July 6, 2010

Authors

Barry Hester and Bryan Cave Leighton Paisner

Senate Considering $30 Billion Small Business Lending Fund for Community Banks

July 6, 2010

by: Barry Hester and Bryan Cave Leighton Paisner

On June 29, 2010, the Senate voted to commence debate on the Small Business Jobs and Credit Act of 2010, a bill passed by the House on June 17, 2010 which includes a $30 billion fund for small business lending through the provision of capital to community banks. This legislation would implement the program described in President Obama’s State of the Union address earlier this year.  Obama has promoted the program by saying that it “takes money repaid by Wall Street banks to provide capital for community banks on Main Street” that can in turn help small businesses

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TARP Use of Capital Survey Due Thursday, April 15, 2010

April 12, 2010

Authors

Robert Klingler

TARP Use of Capital Survey Due Thursday, April 15, 2010

April 12, 2010

by: Robert Klingler

The Treasury Department is conducting a survey on how all TARP CPP recipients used the capital provided by TARP during 2009.  Specifically, the Treasury is seeking to collect information to understand what actions institutions took, or were able to avoid taking, because of CPP funding.  In addition to collecting feedback through the surveys, the Treasury will also publish summary balance sheet and income statement information from each institution’s regulatory filings.

Survey responses are due Thursday, April 15, 2010.

While responding to the survey is not required under the TARP CPP agreements or regulations, banks failing to respond are likely

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TARP Special Master Requests Historical Compensation Data

March 30, 2010

Authors

Robert Klingler

TARP Special Master Requests Historical Compensation Data

March 30, 2010

by: Robert Klingler

On March 23, 2010, the Special Master for TARP Executive Compensation issued a letter to all financial institutions that received TARP CPP funds prior to February 17, 2009.  The letter requests compensation data to permit the Special Master to review all bonuses, retention awards and other compensation paid to the institution’s senior executive officers and next 20 most highly-compensated employees from the receipt of TARP CPP funds through February 17, 2009.

In the event the Special Master determines that such compensation is inconsistent with the purposes of TARP or otherwise contrary to the public interest, the Treasury shall seek

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Treasury Expands TARP Program for CDFI's; Contemplates Private Matching Investments

February 4, 2010

Authors

Robert Klingler

Treasury Expands TARP Program for CDFI's; Contemplates Private Matching Investments

February 4, 2010

by: Robert Klingler

On February 3, 2010, the Treasury Department announced enhancements to the TARP Capital Purchase Program for Community Development Financial Institutions (CDFIs).  In addition to significant improvements for CDFIs, for the first time the Treasury Department has formally announced that it will consider private matching investments to determine bank viability – which could be a significant signal of how the Treasury might treat community banks under the proposed $30 billion Small Business Lending Fund.

Basic Program Terms

President Obama Proposes $30 Billion Small Business Lending Fund

February 2, 2010

Authors

Robert Klingler

President Obama Proposes $30 Billion Small Business Lending Fund

February 2, 2010

by: Robert Klingler

Carrying through with his announcement in the State of the Union, on February 2, 2010, President Obama provided the outlines of a proposed $30 billion Small Business Lending Fund to provide capital to community banks, with incentives to increase small business lending.  As proposed, the program will require Congressional approval to move the funds outside of TARP, which should remove the applicability of the executive compensation and governance restrictions and is also hoped to remove the stigma associated with TARP funds.

Based on the initial fact sheet, the terms appear generally comparable to the financial terms under the

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State of the Union – TARP Money for Community Banks

January 28, 2010

Authors

Robert Klingler

State of the Union – TARP Money for Community Banks

January 28, 2010

by: Robert Klingler

In his January 27, 2010 State of the Union address, President Obama renewed his call for using some of the TARP money for community banks in an effort to drive small business lending.

So tonight, I’m proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat.

This proposal would be consistent with President Obama’s speech last October in which he stated the broad outlines of a new program to provide additional capital to community banks in an effort

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TARP Programs Completed

January 25, 2010

Authors

Bryan Cave Leighton Paisner

TARP Programs Completed

January 25, 2010

by: Bryan Cave Leighton Paisner

Two of the more commonly discussed programs that Treasury implemented pursuant to its discretion under TARP, the Capital Purchase Program (the “CPP”) and the Capital Assistance Program (the “CAP”), have been closed.

According to the Treasury’s FAQs, as of December 31, 2009, the Treasury will not make any additional investments under the CPP.  Over 700 institutions participated in the CPP, representing institutions from every state, except Montana and Vermont, and from Puerto Rico and Washington D.C.  California’s institutions were most highly represented, with 72 institutions receiving CPP funds.  Illinois and Missouri followed with 47 and 32 institutions, respectively, receiving CPP funds.

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