Monday, December 01, 2008
The Federal Reserve Board announced plans Nov. 25 for a $200 billion lending facility aimed at unfreezing secondary markets for Small Business Administration loans and consumer loans.
The program will create a new market for asset-backed securities collateralized by SBA-guaranteed loans, student loans, auto loans and credit card loans. This will provide liquidity to issuers of these securities, Treasury Secretary Henry Paulson said, “enabling a broad range of institutions to step up their lending.”
To support the program, the Treasury Department will provide the Federal Reserve with $20 billion in credit protection from its remaining Troubled Asset Relief Program (TARP) funds.
Secondary markets for SBA loans and consumer loans have frozen in recent months.
Source: http://www.bizjournals.com/dallas/s
