The New Term Asset Backed Securities Loan Facility Program

A new lending program from the Federal Reserve and the U.S. Treasury could generate up to $1 trillion in loans for small businesses and consumers, the government announced Tuesday.

The Term Asset-Backed Securities Loan Facility, or TALF, will provide its first loans March 25, the government said. The Fed announced the program involving asset-backed securities, also known as ABS, in November, then unveiled an expansion last month, but the highly anticipated program was delayed.
Companies or investors interested in participating will apply to the Fed on March 17.

The Fed's program is designed to make a profit in the long run through interest and fees. To manage the growth in the Fed's balance sheet, the Fed and the Treasury will ask Congress for legislation to give the Fed additional powers.

The program will stimulate the economy by circumventing traditional credit channels that are now blocked up, the government said. With banks unable or unwilling to lend, even the most credit-worthy customers are finding credit hard to obtain.

"Issuance of consumer ABS has remained near zero since October," the Treasury said, adding that the stress in the market for extending credit to consumers "is one of the causes of the deepening recession."
"The program could represent a turning point for the economy and the financial markets by jump-starting lending in critical areas," said Tony Crescenzi, chief bond-market strategist for Miller Tabak & Co.

New lending program targets consumers, business.

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I still don't understand why the Fed and Treasury don't use those companies thay have semi-nationalised such as Freddie Mac to bypass the credit freeze? Is that too simple?