Fed Says TALF Collaterized Loan Requests Dropped 64% in Second Round

In a surprise turn of events, loan requests from the Federal Reserve’s Term Asset-Backed Securities Loan Facility (TALF) program dropped by 64%, the Federal Reserve Bank of New York said on it’s website. In the two hour window that the central bank provided, between 13:00 EST and 15:00 EST, a total of $1.7 billion in collateralized securities were exchanged for cash. Of this amount, $896 million was comprised of credit card debt with the remaining portion ($811) collaterized by auto debt.

The program was created to alleviate tight credit conditions during a time when even those with the least likelihood of default are denied borrowing. Through the purchases of asset-backed securities (ABS), that are collateralized by anything from student to car loans, cash quickly becomes infused in many high-level financial institutions.