Treasury removes backstop to Fed lending program

While the Fed ran the program, the Treasury provided a key backstop to it, providing a certain level of credit protection. For example, the program originally was authorized to lend out up to $200 billion loans, and the Treasury agreed to provide $20 billion in protection as part of the Troubled Asset Relief Program (TARP). But over time, the amount of loans, and the level of protection, has shrunk.

Now, the amount of fees the Fed has claimed as part of TALF is larger than the amount of loans outstanding. A total of $743 million in fees have been collected compared to just $556 million in remaining outstanding loans. The Fed added that that last handful of loans remain well collateralized and are all current on payments of interest and principal.