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Joint Press Release
March 03, 2009

Treasury and Federal Reserve announce launch
of Term Asset-Backed Securities Loan Facility
(TALF)
Board of Governors of the Federal Reserve System
Department of the Treasury
For release at 9:15 a.m. EST
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In carrying out the Financial Stability Plan, the Department of the
Treasury and the Federal Reserve Board are announcing the launch of
the Term Asset-Backed Securities Loan Facility (TALF), a component of
the Consumer and Business Lending Initiative (CBLI). The TALF has
the potential to generate up to $1 trillion of lending for businesses and
households.
The TALF is designed to catalyze the securitization markets by providing
financing to investors to support their purchases of certain AAA-rated
asset-backed securities (ABS). 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.
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.
Under today's announcement, the Federal Reserve Bank of New York
will lend up to $200 billion to eligible owners of certain AAA-rated ABS
backed by newly and recently originated auto loans, credit card loans,
student loans, and SBA-guaranteed small business loans. Issuers and

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investors in the private sector are expected to begin arranging and
marketing new securitizations of recently generated loans, and
subscriptions for funding in March will be accepted on March 17, 2009.
On March 25, 2009, those new securitizations will be funded by the
program, creating new lending capacity for additional future loans.
The program will hold monthly fundings through December 2009 or
longer if the Federal Reserve Board chooses to extend the facility.
Today the Board also released revised terms and conditions for the
facility and a revised set of frequently asked questions. The revisions
include a reduction in the interest rates and collateral haircuts for loans
secured by asset-backed securities guaranteed by the Small Business
Administration or backed by government-guaranteed student loans. The
modifications are warranted by the minimal credit risk on these assets
owing to the government guarantees, and, by making the terms of the
TALF loans more attractive, they should encourage greater flows of
credit to small businesses and students.
Additional details of the TALF and the CBLI can be found at
http://www.financialstability.gov/. Further information on the Federal
Reserve's credit and liquidity programs is available at
http://www.federalreserve.gov/monetarypolicy/bst.htm. The Treasury
Department also released a new white paper outlining efforts to unlock
credit markets. On February 10, 2009, the Board and Treasury
announced an expansion of TALF to include new asset categories that
could generate up to $1 trillion in new lending. Teams from the Treasury
Department and Federal Reserve are analyzing the appropriate terms
and conditions for accepting commercial mortgage-backed securities
(CMBS) and are evaluating a number of other types of AAA-rated newly
issued ABS for possible acceptance under the expanded program. The
expanded program will remain focused on securities that will have the
greatest macroeconomic impact and can most efficiently be added to the
TALF at a low and manageable risk to the government.
The Federal Reserve and Treasury currently anticipate that ABS backed
by rental, commercial, and government vehicle fleet leases, and ABS
backed by small ticket equipment, heavy equipment, and agricultural
equipment loans and leases will be eligible for the April funding of the
TALF. Other types of securities under consideration include privatelabel residential mortgage-backed securities, collateralized loan and
debt obligations, and other ABS not included in the initial rollout such as
ABS backed by non-auto floorplan loans and ABS backed by mortgageservicer advances. As is the case for the current categories of newly
originated loans, the TALF will combine public financing with private
capital to encourage the private securitization of loans in the asset
classes eligible in the expanded program.
Increased TALF lending and other actions to stabilize the financial
system have the potential to greatly expand the Federal Reserve's
balance sheet. In order for the Federal Reserve to conduct monetary
policy over time in a way consistent with maximum sustainable
employment and price stability, it must be able to manage its balance

sheet, and in particular, to control the amount of reserves that the
Federal Reserve provides to the banking system. The amount of
reserves is the key determinant of the interest rate that the Federal
Reserve uses to pursue its monetary policy objectives. Treasury and
the Federal Reserve will seek legislation to give the Federal Reserve the
additional tools it will need to enable it to manage the level of reserves
while providing the funding necessary for the TALF and for other key
credit-easing programs.
Key Dates for the TALF
Schedule for First Funding with Initial Eligible Assets
Date
March 3, 2009

Announcement/Event
Launch of the TALF. Publication of the details for the
first funding
Marketing first funding to investors

March 3-17,
2009
March 17, 2009 Subscriptions for first funding for TALF recorded
March 25, 2009 First funds from the TALF disbursed

Schedule for Second Funding
Date
Announcement/Event
March 24, 2009 Announcement of details of second funding
March 24-April 7, Marketing second funding to investors
2009
April 7, 2009
Subscriptions for second funding for TALF recorded
April 14, 2009
Second funds from the TALF disbursed

TALF Frequently Asked Questions
TALF Terms and Conditions
TALF White Paper (30 KB PDF)
Related Press Release
Federal Reserve Bank of New York announces March 17 TALF
Operation

Last Update: March 03, 2009

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BOARD OF GOVERNORS of the FEDERAL RESERVE SYSTEM
20th Street and Constitution Avenue N.W., Washington, DC 20551