To qualify, a bank or credit union had to have been certified as a community development financial institution by Treasury's Community Development Financial Institutions Fund  and be declared in good financial condition by its regulator.

The report found the cost of the program had dropped because some of the original 84 banks and credit unions had left the program, either because they no longer needed the money, or in the case of two credit unions, they had been conserved or had merged with another institution. It also found improving economic and market conditions had enabled some of the original 84 institutions to leave the program.

The performance of TARP-accepting credit  unions comparedto those that did not accept funds was not flattering, the GAO report said.

For example, as of the end of 2013, the TARP credit unions had fewer assets overall (just more than $19 million compared to almost $30 million); had a lower return on assets (0.2% compared to 0.53%); and a lower net worth ratio (7.53% compared to 9.98%).

In addition, the GAO report touched upon how CDCI  might eventually be wound down. The interest rate on CDCI will rise in 2018, from 2% to 9%. The GAO said both bank and credit union executives expressed hope their institutions will be able to find replacement funds from another source to allow them repay the TARP funds before the interest hike..

But not everyone is optimistic all the CDCI credit unions will be able to leave the program.

"This is the Hotel California for some CDCI credit unions," wrote Keith Leggett, senior economist with the American Bankers Association and longtime credit union critic, in an email exchange with CU Times. 

"With limited access to capital, they will not be able to leave the TARP CDCI program," he wrote, adding, "These credit unions are in a Catch 22 scenario. If they repay TARP, they will take a hit to their net worth; but, if they remain in the program, they will slowly see their net worth decline as they start writing down 20% of the CDCI capital injection over the next five years. Either way the outlook for those credit unions remaining independent is bleak," he concluded.

But Clifford Rosenthal, former CEO of the National Federation of Community Development Credit Unions and a chief advocate for the creation of the CDCI, said he was very pleased with the GAO report.

Rosenthal noted the report found the overall cost of the program had dropped and the GAO had not found any of the program participants to be in poor financial health. He also observed  the GAO had not reported whether the CDCI participating credit unions might have started out in the program at a weaker financial state than did CDFI credit unions that could have participated but did not.

"I can't say I find the report's conclusion all that surprising," Rosenthal said, explaining  the Treasury's rules for CDCI participation effectively limited its scope to credit unions sorely in need of the money..

"For example, there was a requirement if credit unions took the money, the top 15 of their employees would have to forego bonuses or raises while participating in the program," Rosenthal said. "I know of many very financially healthy credit unions positioned to grow, but whose leadership wouldn't or couldn't accept those conditions," he added.

Evidence  of how confusing some credit unions found the rules came to light when a report from the TARP's special inspector general found that six of the 39 credit unions that received money in the program had not fulfilled their obligation to report how the money was used. Of the six, one was conserved and returned its TARP money after the conservatorship, another was merged and repaid the money before the merger and a third reported that it did not understand  the inspector general considered it to be in violation.