Press Releases
Treasury Releases Capital Purchase Program Term Sheets
for Mutual Holding Companies
April 7, 2009
Washington - The U.S. Department of the Treasury today released three term sheets for qualifying financial institutions (QFIs) applying to the Capital Purchase Program (CPP) that are bank or savings and loan holding companies in mutual organization or their stock holding company subsidiaries.
The first term sheet provides for issuance of preferred stock at publicly-traded subsidiary holding companies. The second term sheet provides for issuance of preferred stock at privately held subsidiary holding companies. The third term sheet provides for issuance of debt by top-tier mutual holding companies that do not have subsidiary holding companies. Treasury has also released a set of frequently asked questions and answers about these three term sheets.
The application deadline is May 7, 2009, and all applications must be submitted to the appropriate federal banking agency. QFIs should use the standardized CPP application form, which is available on the public web sites of each federal banking agency and on http://www.financialstability.gov.
Through the CPP, Treasury has invested in 542 institutions, including small, community, regional, and national banks, as well as Community Development Financial Institutions in 48 states, Puerto Rico, and the District of Columbia. The largest investment was $25 billion, and the smallest investment was $301,000. Treasury established the CPP to stabilize the financial system by providing capital to healthy banks, enabling them to continue lending to consumers and businesses during this unprecedented crisis. Results of Treasury's monthly Lending Snapshots illustrate that the largest recipients of CPP investments have continued to lend since Treasury launched the CPP in October 2008, despite significant headwinds. Lending levels would likely have been much lower were it not for the additional capital provided by Treasury through the CPP.
Treasury has designed the CPP to encourage participation by a broad range of financial institutions, which are diverse in terms of size, business focus, customer base, geographic coverage and product and service offerings. This approach allows Treasury to reach as many communities across the country as possible, enabling faster economic recovery. In addition to today's issuance of three term sheets, Treasury has already issued program terms for publicly-held institutions, privately-held institutions and S corporations, touching almost every banking market in the country. The federal banking agencies are evaluating all submitted CPP applications and continue to send qualifying applications to Treasury for approval.
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