Fed, Treasury Launch TALF Program

WSJ ^ | 03 Mar 2009 | Meena Thiruvengadam

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The U.S. Treasury and Federal Reserve launched a highly anticipated lending facility Tuesday aimed at generating up to $1 trillion in consumer and small business loans.

The Term Asset-Backed Securities Loan Facility, which is scheduled to begin disbursing funds March 25, will make loans to purchasers of AAA-rated securities backed by new auto, credit card, student and Small Business Administration guaranteed loans. The facility is commonly referred to as the TALF.

"By reopening these markets, the TALF will assist lenders in meeting the borrowing needs of consumers and small businesses, helping to stimulate the broader economy," the Treasury and Fed said in a joint statement. (Read the statement.)

Requests for funding from the facility will be accepted beginning March 17.

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The Treasury has agreed to provide up to $100 billion of capital to the TALF, and the Fed will lend up to $1 trillion through the program.

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