American Financial Services Association

Bipartisan Group of Members Calls for TALF Expansion to Include Unsecured Consumer Loans

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Bipartisan Group of Members Calls for TALF Expansion to Include Unsecured Consumer Loans

The American Financial Services Association (AFSA) is pleased that a bipartisan group of Members of Congress wrote to Federal Reserve Chair Jerome Powell in favor of unsecured consumer loans inclusion in any Term Asset-Backed Securities Loan Facility (TALF) expansion.

The letter, sent yesterday, notes that, “While past versions of TALF did not include consumer loan-backed ABS as eligible collateral, we note that since 2008 the market has changed considerably, and the market for consumer and small business credit, including consumer installment loans, play a much more vital role in the economy than they did twelve years ago. In light of this development, we hope you agree that any expanded TALF program should include investment-grade securities backed by unsecured consumer loans as eligible collateral.”

The letter also cites a 2017 Federal Reserve Small Business Credit Survey noting that “personal loans are disproportionately relied on by disaster-affected firms, startups, and the smallest, most vulnerable businesses.”

AFSA applauds the Members who submitted the letter and hope the Federal Reserve will take appropriate action in the near future. AFSA submitted its own letter to the Federal Reserve and signed onto a Joint Trade letter advocating for the expansion.

April 2nd, 2020 by