FOR IMMEDIATE RELEASE
ICBA Applauds New TALF Program
Will Help Unfreeze Secondary Markets and Boost Small Business Lending
Washington, D.C. (March 3, 2009)—The Independent Community Bankers of America (ICBA) applauds the Term Asset-Backed Securities Loan Facility (TALF) program announced today by the Federal Reserve and Treasury in an effort to free up the frozen secondary market for credit cards, auto loans and small business loans. The TALF, which will receive $20 billion in support through Treasury’s Troubled Asset Relief Program (TARP), will allow the Federal Reserve and Treasury to extend up to $200 billion in nonrecourse loans to holders of high-quality asset-backed securities that are backed by consumer and small business loans.
“Community banks are common-sense lenders that did not participate in the activities that led to the current economic crisis, but they are well-positioned to help in the recovery efforts by extending lending in cities and towns throughout America. ICBA believes the TALF will help community banks make even more loans by thawing the secondary market,” said Camden R. Fine, ICBA president and CEO. “ICBA is pleased that our call has been answered and we particularly appreciate the Federal Reserve’s attention to ICBA’s requests to reasonably address the interest rate charged, duration of SBA loan pools eligible and the ‘haircut’ applied to SBA loans in the program. ICBA will continue to work closely with the Federal Reserve and Treasury to help ensure the program is crafted and implemented to provide the intended value and intended results.”
The consumer asset-backed securities market is an important source of liquidity to community banks that make federally guaranteed small business loans and consumer loans, such as auto loans, student loans, credit cards and SBA loans. By providing liquidity to issuers of consumer asset-backed paper, the Federal Reserve facility will enable more community banks to continue to step up their lending and provide their customers with access to lower-cost consumer financing and small business loans.
For more information about the TALF, please go to www.icba.org.