The Federal Reserve rolled out program today geared towards “boosting the availability of credit to consumers and small businesses.”
The Fed will lend up to $200 billion to spur consumer lending — for autos, education, credit cards and other things. The bold program, dubbed the Term Asset-Backed Securities Loan Facility, was first announced late last year and originally scheduled to start in February.
The new program “will remain focused on securities that will have the greatest impact to aid the troubled economy and shaky financial markets and that can be added at a low risk to the government.” The plan is scheduled to run through December, but the FED has said it could be extended.
This is welcome news for consumers and small businesses struggling in this economic mess, as many credit card companies have tightened credt, lowered credit and increased fees and interest rates on even the best of card holders.
Increasing fees and interest rates on consumers who are struggling to pay their credit card bills has always seemed defeatist in my opinion. Of course, the big corporate banks have proven not to care in the past about helping people climb out of debt. I think in the midst of this economic mess, Congress needs to take a long hard look at the practices of these lenders and set regulations in place for credit companies that are designed to help consumers. No one can climb out of debt when they have mountains of extra fees piled on them, as punishment for late payments. The whole process creates a snowball effect that causes the banks to then have large uncollected debts. And now look where we are…