Term Asset-Backed Securities Loan Facility

The Federal Reserve established the Term Asset-Backed Securities Loan Facility (TALF) on March 23, 2020 to support the flow of credit to consumers and businesses. The TALF enabled the issuance of asset-backed securities (ABS) backed by student loans, auto loans, credit card loans, loans guaranteed by the Small Business Administration (SBA), and certain other assets.

Under the TALF, the Federal Reserve lent on a non-recourse basis to holders of certain AAA-rated ABS backed by newly and recently originated consumer and small business loans. The Federal Reserve lent an amount equal to the market value of the ABS less a haircut and was secured at all times by the ABS. Treasury, using the ESF, also made an equity investment in the SPV established by the Federal Reserve for this facility.

The TALF was established by the Federal Reserve under the authority of Section 13(3) of the Federal Reserve Act, with approval of the Treasury Secretary. The TALF ceased extending credit on December 31, 2020.

Letter from Chair Powell to Secretary Mnuchin regarding emergency lending facilities (November 20, 2020)

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Last Update: July 13, 2021