Bernanke: Investor Demand For TALF Will Grow

JEANNINE AVERSA

WASHINGTON (AP) — Federal Reserve Chairman Ben Bernanke predicts investors' appetites will continue to grow for a government program aimed at sparking consumer and business lending.

After getting off to a slow start in March, demand jumped in May, with investors requesting $10.6 billion worth of loans. Investors use the money to buy securities backed by auto and student loans, credit cards, loans guaranteed by the Small Business Administration and backed by business equipment.

Next month, the program — dubbed the Term-Asset-Backed Securities Loan Program, or TALF — will be expanded to include securities backed by commercial real-estate loans.

"Early indications are that demand for TALF loans in June will be even higher," Bernanke said in a letter to Rep. Keith Ellison, D-Minn. The letter, released Friday, was dated May 12.

The TALF has the potential to generate up to $1 trillion in lending for households and businesses. It figures prominently in efforts by the Fed and the Obama administration to ease credit stresses and stabilize the financial system, elements needed to lift the country out of recession.