The loans they make are to buy up US Treasuries and never have they owned so many. Usually they just buy and sell and recirculate them in a way to provide orderly interest rates and growth. Say the Fed owns one trillion in Treasuries these days. Their collateral is the ability of the USG to tax thus paying interest and principle. Down the road they can ask for oil, coal, mineral rich Federal lands to be pledged as collateral and in the event of default the Fed will own them.
Like I said, the Federal Reserve is a private bank. It does not have to act in synch with Feral Government policies
The Fed is a cartel. Nuff said.