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AFSA to Obama: Don't Forget Consumer Finance

February 6, 2009

WASHINGTON — As President Obama prepares to announce revisions to the Troubled Asset Relief Program (TARP), the American Financial Services Association has published an open letter encouraging the president to keep consumers' "everyday borrowing needs" in mind by allowing consumer finance companies to benefit from the new guidelines.

"Our hope is that your administration will support an expansion of the Term Asset-Backed Securities Loan Facility (TALF), whose objective is to increase credit availability for consumers and small businesses by facilitating the issuance of Asset-Backed Securities (ABS) backed by auto loans and leases, floor-plan financing, student loans, credit cards and small business loans," wrote Chris Stinebert, AFSA's president/CEO. "While TALF is a step towards restoring market liquidity, we believe the program’s current eligibility requirements will prohibit most finance companies from participating ... Absent the ability to participate in TALF, many financial services companies, especially those within the auto industry, would not be able to finance consumer loans for products and purchases essential to the nation’s recovery."

In addition to providing access to TALF funds for qualified finance companies, AFSA wants the president to require any banks that accept TARP funds to guarantee they will keep those companies' bank-provided lines of credit open.

The full text of the letter can be read here.

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