Economy

Fed outlines terms for lending program

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The Federal Reserve Bank building
Kevin Lamarque | Reuters

The Federal Reserve outlined how it will make loans through another of its lending programs and said Tuesday that it will provide detailed monthly information about the funds.

As part of its Term Asset-Backed Loan Facility, a financial crisis-era program aimed at the asset-backed securities market, the Fed said it will issue up to $100 billion in three-year loans. 

Collateral accepted will include ABS whose underlying assets have such classes as auto and student loans, credit cards and Small Business Administration loans. Terms will be 150 basis points above the 30-day average secured overnight financing rate, currently at 0.06%.

In addition to the TALF terms, the Fed also said it will provide monthly disclosures on both that lending facility and the Paycheck Protection Program Lending Facility, part of the coronavirus relief package. Controversy has arisen over the PPP following disclosures that publicly traded companies that have access to cash on the open markets had been applying for and receiving funding.

"The Federal Reserve remains committed to providing the public and Congress with detailed information about our efforts to support households and businesses during this unprecedented time," Fed Chairman Jerome Powell said in a statement.

The disclosures will include the name of participants, amounts borrowed, interest rates charged and value of pledged collateral. The information also will include costs, revenues and fees for the programs.

Correction: An earlier version contained incorrect information about the disclosures regarding the PPPLF.