The financial condition of community development credit unions that received funding from the Troubled Asset Relief Program has improved since 2011, the Government Accountability Office reported.
The 31 credit unions that remained in the program as of March 31 experienced financial improvements between 2011 and 2015, according to the GAO, however, the agency also said one key performance indicator – return on average assets – had weakened since December 2014.
Created in 2010, the Community Development Financial Institutions Fund was intended to mitigate the adverse impact of the financial crisis on communities underserved by traditional banks. To qualify, a bank or credit union must be certified as a CDFI by the Treasury Department and be declared in good financial condition by its regulator.
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The GAO reported that Treasury received $136 million in principal repayments and had written off about $7 million. As of April 2016, the Treasury estimated that the program's lifetime cost to be approximately $103 million. And the institutions remaining in the program and trade associations that represent them said they expect all funds to be repaid by 2018.
The Community Development Capital Initiative program, founded by Treasury to help CDFIs through the financial crisis, has had a mixed history.
That same year, the TARP special inspector general said six credit unions that received CDCI funds never told the Treasury Department how the taxpayer money was used.
And in 2010, an academic critic of the TARP program alleged that political influence played a role in deciding which credit unions received CDCI money.
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