Credit card issuers have until September 3rd to line up special financing under the Term Asset-Backed Securities Loan Facility, or TALF. The Federal Reserve launched TALF to help lenders increase liquidity, a move that economists hope will help jumpstart small business and consumer lending. Some credit card companies have already announced their participation in TALF, including:
By placing consumer credit cards and auto loans as collateral, TALF participants enjoy deeply discounted cash loans from the Federal Reserve and from private investors. Government officials have been vocal about the need for banks to quickly convert those funds into new accounts and extensions of existing credit lines.
Although many banks have suffered criticism for tougher lending policies spurred by enactment of the Credit CARD Act, cash injections through TALF can help spread the risk of delinquencies and defaults. For consumers and for small business owners with a good credit score, holding accounts