WASHINGTON - (WFLX) - The Federal Reserve is launching a program to help free up credit. They will lend up to $200 billion to spur consumer lending for autos, education, credit cards and other things.
The program will start off by providing $200 billion in loans to investors with the goal of jump-starting lending to consumers and small businesses. The program, dubbed the Term Asset-Backed Securities Loan Facility, was first announced late last year and originally was scheduled to start in February.
Participants - companies and investors that pledge eligible collateral to back the loan - must request the new government loans by March 17. The Fed will provide the three-year loans on March 25.
Under the program, the Fed will buy securities backed by different types of debt, including credit card, auto, student and small business loans. The credit crunch - the worst since the 1930s - has made it much harder for people to obtain such financing , and those that do can be socked with high rates.
To learn more about the program set up for investors, click here.