TALF – Treasury Secretary Henry Paulson announced the $200 billion TALF program to boost consumer credit access to student loans, car loans, credit card loans, and SBA loans.

TALF stands for “Term Asset-Backed Securities Loan Facility” and the program is meant to help consumers struggling to get credit by providing guaranteed funding for Asset Based Securities or “ABS” in Federal Reserve speak.

The $200 billion program is aimed directly at consumers and small businesses rather than big banks and corporations.

“That $200 billion is a starting point,” Paulson said, adding that it is “going to take a while to get this program up and going,” but then it could be expanded over time.

Paulson noted that ABS issuances reached $240 billion in 2007, and have since “declined precipitously” in the third quarter of 2008 before “essentially coming to a halt in October.”

Millions of Americans cannot find affordable financing for their basic credit needs,” Paulson said in announcing the TALF program. “And credit card rates are climbing, making it more expensive for families to finance everyday purchases.”

Consumer spending accounts for two-thirds of Gross Domestic Product. Without access to credit, consumer spending has taken a huge hit, further weakening the already struggling economy.

Paulson cautioned that even with the new, consumer focused lending facility, “it will take time” for the economy to recover, and new challenges cannot be ruled out.

And that’s the latest news on the new “Term Asset-Backed Securities Loan Facility” or TALF.

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