WASHINGTON - Seeking to pump more money into the sagging credit market, the government today unveiled additional programs to buy troubled assets.
The Federal Reserve will buy $100 billion worth of debt from Fannie Mae and Freddie Mac and buy mortgage-backed securities valued at $500 billion. It will also plan to lend up to $200 billion to holder of securities backed by consumer loans. The Treasury Department will provide $20 billion in credit protection from funds from the Troubled Asset Relief Program.
CUNA and NAFCU both praised the plan.
"The Fed's announced plan to buy up to $500 billion in mortgage-backed securities could be welcome news to some credit unions that are seeking an invigorated market for these assets now on their books. We urge the Fed to include credit unions in this program as soon as possible," CUNA President Dan Mica said in a statement.
NAFCU Public Relations Manager Patty Briotta sad in a statement that: "Credit unions did not cause this crisis and we continue to hope that credit unions will not have to access any support programs, but we are pleased to see the Treasury Dept. pursue an approach that would assist all depository institutions-not just banks."
Treasury Secretary Henry Paulson criticized those who have said that the program was unfair or hasn't worked quickly enough.
"It is naive for any of us to think that when you are dealing with a situation of this magnitude that a bill could be passed or a single action taken to make all the issues go away," he said at a news conference.
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