GAO criticizes Treasury’s lack of documentation in TALF program

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GAO criticizes Treasury’s lack of documentation in TALF program

The Treasury Department failed to document how decisions were made regarding its involvement in a Federal Reserve loan program, and it hasn’t planned for a scenario that could leave the department on the hook for billions of dollars, according to a new Government Accountability Office report released Friday.

The Term Asset-Backed Securities Loan Facility (TALF) was designed to reopen the securitization market to facilitate consumer and business lending. Managed by the Federal Reserve Bank of New York, TALF will provide up to $200 billion in loans to institutions seeking to purchase asset-backed securities and commercial mortgage-backed securities, in exchange for collateral in the form of securities, which would be forfeited if the loans are not repaid.