WASHINGTON — The Capital Purchase Program was more than $6 billion in the black as of the end of January, but there are continued concerns over some institutions still not repaying CPP funds, according to a report issued Thursday by the Government Accountability Office.
The GAO said Treasury had taken in $211.5 billion through the CPP — a central piece of the Troubled Asset Relief Program mandated in 2008 — compared to the nearly $205 billion disbursed. But despite the government's returns, $16.7 billion of Treasury's original investment is still outstanding, and the number of institutions that are missing interest and dividend payments has risen sharply.
"Institutions that continue to miss payments and problems institutions may have difficulty ever fully repaying their CPP investments," said the GAO, which under the legislation creating Tarp is required to report on its progress every 60 days.
The report said the unpaid disbursements appeared to be concentrated in a relatively small number of banks. As of Jan. 31, 67% of the still-outstanding amount was in just 25 institutions. Meanwhile, the 158 institutions that had missed a quarterly dividend or interest payment as of Nov. 30 was a huge increase from just eight in February 2009. The 130 CPP participants designated as troubled in December was 175% greater than the amount of problem institutions two years earlier.
Of the 707 eligible institutions that received CPP investments between 2008 and December 2009, 341 have since exited the program, the GAO said.
