WASHINGTON — The Federal Reserve has extended the length of a program intended to spur lending to consumers and small businesses at lower rates, but the central bank said it had no plans to expand the types of loans being made.
The Fed said Monday it was extending its Term Asset-Backed Securities Loan Facility through March 31 for most of the types of loans it makes. The program was scheduled to end Dec. 31.
The TALF started in March and figures prominently in efforts by the Fed and the Obama administration to ease credit, stabilize the financial system and help end the recession. Under the program, investors use the money to buy securities backed by auto and student loans, credit cards, business equipment and loans guaranteed by the Small Business Administration.
Commercial mortgage-backed securities, which were added to TALF in mid-June, were extended through June 30 because issuing new securities in that area "can take a significant amount of time to arrange," according to a joint news release from the Fed and the Treasury Department.
The commercial real estate portion of the TALF is designed to boost the availability of such loans, help prevent defaults and facilitate the sale of distressed properties.
In a survey released Monday, the Fed also found that most banks expect their lending to remain tight through the second half of next year, with the exception of mortgage standards, which already are loosening a bit.
The Fed's latest survey of loan officers found that about 20 percent of U.S. banks tightened their lending standards on prime home mortgages in the April-June quarter, down from about 50 percent in the previous quarter.