Programs
Financial Stability Programs: Making Home Affordable Program Consumer and Business Lending Initiative |
What is EESA?
The Emergency Economic Stabilization Act of 2008 (EESA) was signed into law on October 3, 2008, during a time of tremendous financial upheaval and economic uncertainty.
The Troubled Assets Relief Program (TARP) was established under the EESA with the specific goal of stabilizing the United States financial system and preventing a systemic collapse. Treasury has established several programs under the TARP to stabilize the financial system and has now created the Financial Stability Program to further stabilize the financial system, restore the flow of credit to consumers and businesses and tackle the foreclosure crisis to keep millions of Americans in their homes.
How is TARP Promoting Financial Stability?
Making Home Affordable Program – Help Families Stay in Their Homes
The Making Home Affordable Program will help up to 5 million responsible homeowners refinance to keep their mortgages affordable, and create a $75 billion loan modification program to help up to 4 million families avoid foreclosure. The plan establishes guidelines to help bring order and consistency to the home loan process and keep more American families in their homes. Read more…
The Capital Purchase Program (CPP) is a voluntary program in which the U.S. Government, through the Department of Treasury, invests in preferred equity securities issued by qualified financial institutions. Participation is reserved for viable institutions that are recommended by their federal banking regulator. Treasury’s intent is to provide immediate capital to stabilize the financial and banking system, and to support the economy. It is vital that lending be available to families and businesses that need access to credit, to pay for college or to invest and create jobs. A necessary precursor to lending and economic recovery is a stable, healthy financial system. Read more...
Over the past two years we have faced the most severe financial crisis since the Great Depression. Americans across the nation are struggling with unemployment, failing businesses, falling home prices, and declining savings. These challenges have forced the government to take extraordinary measures to revive our financial system so that people can access loans to buy a car or home, pay for a child's education, or finance a business. Read more...
Consumer and Business Lending Initiative – Unfreeze Secondary Credit Markets
Under the CBLI, the Treasury and the Federal Reserve are working together to provide an initial $200 billion in financing to private investors to help unfreeze and lower interest rates for loans for students, small businesses, and others. This program has the potential to unlock up to $1 trillion of new lending and unfreeze currently frozen credit markets. Read more…
Public-Private Investment Program – Addressing the Challenge of Legacy Assets
To address the challenge of legacy assets, Treasury – in conjunction with the Federal Deposit Insurance Corporation and the Federal Reserve – has created the Public-Private Investment Program as part of its efforts to repair balance sheets throughout our financial system and ensure that credit is available to the households and businesses, large and small, that will help drive us toward recovery. Read more…
Capital Assistance Program – Ensure Banks Have Adequate Capital
Treasury has announced details of its Capital Assistance Program to restore confidence in our financial institutions and ensure that they have the capital to continue to lend even in a more adverse environment. The supervisors are conducting stress tests of the nation’s major financial institutions to determine whether they need additional capital to continue lending and absorb the potential losses that could result from a more severe decline in the economy than projected. Eligible financial institutions can can either raise the necessary capital in the private markets, or issue convertible preferred stock to the government through CAP. Read more…
Under the Asset Guarantee Program (AGP), Treasury will guarantee certain assets held by the qualifying financial institution. The set of insured assets is selected by the Treasury and its agents in consultation with the financial institution receiving the guarantee. In accordance with section 102(a), assets to be guaranteed must have been originated before March 14, 2008. Read more...
Treasury created the Targeted Investment Program (TIP) to stabilize the financial system by making investments in institutions that are critical to the functioning of the financial system. This program focuses on the complex relationships and reliance of institutions within the financial system. Investments made through the TIP seek to avoid significant market disruptions resulting from the deterioration of one financial institution that can threaten other financial institutions and impair broader financial markets and pose a threat to the overall economy. Through the TIP, Treasury is working to stabilize the financial system by reducing the chance that one firm’s distress will threaten otherwise financially-sound businesses, institutions, and municipalities, which could cause an adverse spillover effect on employment, output, and incomes. Read more...
Automotive Industry Financing Program
The objective of this program is to prevent a significant disruption of the American automotive industry that poses a systemic risk to financial market stability and will have a negative effect on the economy of the United States. The program will require steps be taken by participating firms to implement plans that achieve long-term viability. Read more...
Systemically Significant Failing Institution Program (SSFI) was established to provide stability and prevent disruptions to financial markets from the failure of institutions that are critical to the functioning of the nation’s financial system.
