Fed, Treasury Launch Loan-Facility Program

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, according to a report in The Wall Street Journal.

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.

Requests for funding from the facility will be accepted beginning March 17. The program will offer new funding on a monthly basis through December 2009 or later, at the Fed's discretion.