Structured Finance Association Applauds Fed Actions To Provide up To $2.3 Trillion in Loans To Support the Economy

The Structured Finance Association (SFA) today applauded the Federal Reserve for taking additional steps to support the economy by providing up to $2.3 trillion in loans “to assist households and employers of all sizes and bolster the ability of state and local governments to deliver critical services during the coronavirus pandemic.”

“Today, the Federal Reserve announced an expansion of their Term Asset-Backed Securities Loan Facility (TALF) program to include triple-A rated tranches of newly issued collateralized loan obligations (CLOs), as well as outstanding commercial mortgage-backed securities (CMBS),” said Michael Bright, chief executive officer of the Structured Finance Association. “These are incredibly important steps to further support credit flow to households and businesses, and SFA members very much appreciate the Federal Reserve providing liquidity to these markets. It is important to remember that this is not 2008, and the market illiquidity can and should be helped by central bank action. SFA has called on the Fed to assist with these asset classes, and we continue to believe that liquidity support for previously issued securities, private label residential mortgage-backed securities (RMBS), personal consumer loans and other critical asset classes is needed. Importantly, we also continue to ask Treasury, the Fed, and the Federal Housing Finance Agency (FHFA) to assist in providing liquidity to mortgage servicers who are working tirelessly to implement broadscale payment assistance mandated by Congress.”

Today’s actions by the Federal Reserve follow recent calls by SFA for the central bank to implement changes to bring TALF current, some of which were included in today’s announcement.

With more than 370 member institutions comprised of accounting firms, broker/dealers, diversified financial intermediaries, investors, issuers, IT vendors, law firms, mortgage insurers, other small financial institutions, rating agencies, servicers and trustees, SFA is the leading voice for the securitization industry. For more information, please visit structuredfinance.org.

NOTE: CEO Michael Bright is available for interviews. Please direct all inquiries to Micah Johnson at micah@bridgepublicaffairs.com.