What U.S. law, enacted in October 2008, created the Troubled Asset Relief Program during the financial crisis?

The Emergency Economic Stabilization Act of 2008 created the Troubled Asset Relief Program during the financial crisis.

Congress passed the law on October 3, 2008, after an earlier version had failed in the House of Representatives. The act authorized the U.S. Treasury to use up to $700 billion to address distressed financial assets and stabilize the financial system. TARP became the best-known part of the legislation.

Although the program was initially described mainly as a way to purchase troubled mortgage assets, the Treasury later used much of it to inject capital into banks. Assistance also supported parts of the automobile industry. The program was controversial because taxpayers were exposed to large commitments while policymakers argued that a systemic collapse had to be avoided.

The act is distinct from the Dodd–Frank Wall Street Reform and Consumer Protection Act, which became law in 2010 and established broader post-crisis financial reforms. TARP was an emergency response enacted during the crash itself.