GAO issues report on status of Community Development Capital Initiative

This story appeared in Bank Digest.

The Government Accountability Office has issued a report on the status of the Troubled Asset Relief Program's Community Development Capital Initiative, which was established in 2010 to help banks and credit unions certified as Community Development Financial Institutions maintain services to underserved communities after the 2007-2009 financial crisis.

The GAO found that as of Sept. 30, 2016, the Treasury Department had approximately $420 million, or 75 percent, of the original CDCI investment of $570 million outstanding. In addition, 55 of the original 84 participating institutions remained in the program, and Treasury has received about $144 million in principal repayments and about $61 million in dividend and interest payments from program participants.

The report also said that as part of its ongoing effort to wind down TARP, Treasury began offering participating CDCI institutions an opportunity to repurchase their outstanding securities owned by Treasury at fair value. The GAO made no new recommendations in the report.