Fed rolls out consumer credit program

The Department of the Treasury and the Federal Reserve today launched a program designed to increase lending to consumers and small businesses. Up to $1 trillion will be available for lending to businesses and households under the program, called the Term Asset-Backed Securities Loan Facility, the Treasury and the Fed said in a joint statement. Under the loan facility, the Federal Reserve Bank of New York will initially lend up to $200 billion to eligible owners of securities backed by new and recently originated auto loans, credit card loans, student loans and Small Business Administration loans. The facility will be a component of the Consumer and Business Lending Initiative, the Treasury Department said. The program, which was originally announced in November, is designed to spur the securitization markets by providing financing to support purchases of Triple A-rated asset-backed securities. “These markets have historically been a critical component of lending in our financial system, but they have been virtually shuttered since the worsening of the financial crisis in October,” the Treasury statement said, adding the program is designed to help lenders meet the needs of consumers and small businesses.