Capital Assistance Program

In early 2009, the U.S. was in the throes of the Great Recession and banks were having trouble getting the funding they needed in order to make loans and have enough cash on hand for their customers. So, the U.S. Treasury Department launched the Capital Assistance Program (CAP) in February 2009 to help banks maintain financial stability.

The goal of the program was to "restore confidence throughout the financial system that the nation's largest banking institutions have a sufficient capital cushion against larger-than-expected future losses." Federal regulators would examine a bank's books and if there was reason for concern about a bank's need for capital, they would provide funding in the form of a preferred security with a 9% dividend, eventually convertible into common stock. Regulators also kept a close eye on how much executives were being paid, loans they were making and dividends being paid.

By November 2009, banks were able to get the funding they needed from the private sector, so the Capital Assistance Program closed down.