That's not true. The Fed is currently lending $140 million to banks at the discount window. $35 million is primary credit, $105 million is seasonal credit. Hardly enough to fund all loans in the US.
Here>>> https://www.federalreserve.gov/releases/h41/current/h41.htm
The primary issue with the fed is how they get their money to loan too the bankers.
The Fed is a Central Bank. Central Banks can create money out of thin air.