US to Approve $1 Trillion to Boost Consumer Credit
Treasury Secretary Timothy Geithner yesterday announced that the federal government will provide up to $1 trillion under the TALF (Term Asset-Backed Securities Loan Facility) program in order to boost consumer credit. In essence, the program is especially aimed at increasing loans for new car buyers and inventory financing for dealerships, according to Autonews.
The TALF program was initially started by the Bush administration in last November and is likely to get a new name, the aforementioned source noted quoting a fact sheet released today: the Consumer & Business Lending Initiative.
Ever since it was announced, the TALF was repeatedly hailed by the National Automobile Dealers Association, as it was regarded as the best solution to boost new car sales and revamp the collapsing United States auto market. The program had an initial value of $200 billion, being then increased to $1 trillion and revised with several new terms such as dealer floorplan financing.
Geithner admits the program is a very important step for restructuring the United States auto industry but believes more steps need to be taken as the “dangerous dynamic” created by the decreasing market requires continuous actions of both the government and car manufacturers.
General Motors and Chrysler, two of the largest American automakers, received in last December a $17.4 billion from the Troubled Asset Relief Program (TARP). Both companies are now required to submit a restructuring plan by February 17 and to demonstrate their viability by the end of March.