Term Asset-Backed Securities Loan Facility

On March 23, 2020, the Federal Reserve established the Term Asset-Backed Securities Loan Facility (TALF) to support the flow of credit to consumers and businesses. The TALF will enable the issuance of asset-backed securities (ABS) backed by student loans, auto loans, credit card loans, loans guaranteed by the Small Business Administration (SBA), leveraged loans, commercial mortgages, and certain other assets.

The Federal Reserve Bank of New York will lend to a special purpose vehicle (SPV), which will provide non-recourse funding secured by eligible collateral to eligible borrowers. The U.S. Department of the Treasury, using funds appropriated to the Exchange Stabilization Fund under section 4027 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), will make an equity investment in the SPV. The TALF was established by the Federal Reserve under the authority of Section 13(3) of the Federal Reserve Act, with approval of the Secretary of the Treasury.


Vendors

In May 2020, the New York Fed selected Pacific Investment Management Company LLC (PIMCO) as a third-party vendor to serve as collateral monitor for this facility. PIMCO was selected on a short-term basis for this role after considering its knowledge and experience in the ABS market, as well as its prior experience in TALF, which have allowed for a quick time to market. Following the launch of the facility, when sourcing a vendor is less time sensitive, the New York Fed will revisit this relationship.

In May 2020, the New York Fed selected The Bank of New York Mellon (BNYM) as a third-party vendor to serve as custodian and administrator for this facility. BNYM was selected on a short-term basis for this role after considering its operational and technological capabilities as well as its prior experience in TALF, which have allowed for a quick time to market. Following the launch of the facility, when sourcing a vendor is less time sensitive, the New York Fed will revisit this relationship.

Facility Agreements
Related New York Fed Content
Contacts

Contact for General Inquiries
nytalf@ny.frb.org

Contacts for Media Inquiries
Andrea Priest
andrea.priest@ny.frb.org

Brian Manning
brian.manning@ny.frb.org