The most significant lasting sentiment of the Troubled Asset Relief Program (TARP) will be how its unpopularity may constrain future governments from similarly responding to financial crisis, according to an assessment from Congressional Oversight Panel (COP). TARP is set to expire Oct. 3. The Treasury Department originally capped the program at $700 billion when it was authorized in October 2008, but the Dodd-Frank Act signed in July reduced that ceiling to $475 billion. In the two years of TARP, 7.1 million homeowners received a foreclosure notice, home prices have dropped 28% from its pre-crisis peak, and stock indices have fallen 30%, according to COP, a panel designed by Congress to oversee the spending and determine its effect on the crisis. “Given that Treasury was mandated by law to use the TARP to address these measures of the economy, their lingering weakness is cause for concern,” according to the report. Economists featured in the report struggled to isolate TARP’s direct effect on the economy but did agree it was necessary. “Despite the difficulty some of them found in ascribing particular effects to the TARP, the Panel’s experts were consistent in their view that even if mismanaged in many ways, TARP was the right thing to do,” according to the report. TARP was originally set to expire at the end of 2009, but the Treasury extended it to October lat last year. Secretary Timothy Geithner at the time said any new use of the funds would be used to provide additional foreclosure relief, extending capital to small and community banks and supporting the securitization market. Geithner added the TARP extension would preserve his authority to intervene if another crash occurred, and this reason, according to COP, was more significant. Participating economists agreed TARP created a moral hazard with overly generous terms without forcing financial institutions into liquidation or receivership. But its unpopularity, according to COP, will be its lasting legacy. The lack of popular support constrained even the Treasury’s own policy choices in the TARP era. Additionally the stigma of approaching the deposit window, as a result, kept some banks from participating in the Capital Purchase Program for fear of losing customers at the detriment of operations. “The unpopularity of the TARP may mean that the government will not authorize similar policy responses in the future,” according to COP. “Thus, the TARP’s greatest consequence may be that the government has lost some of its ability to respond to financial crises.” Write to Jon Prior.