WASHINGTON — Auto lenders pressed the Obama administration Tuesday to modify one of its major loan programs, saying certain requirements have prevented money from flowing to the nation’s struggling car dealers.
Executives at the American Financial Services Association, which represents the lending arms of General Motors, Ford and Chrysler, argued for the changes in a morning meeting with White House and Treasury Department officials, the association said.
Auto finance companies have had limited access to funds from the Term Asset-Backed Securities Loan Facility, or TALF, because of credit-ratings requirements, according to the financial-services association. Securities purchased with TALF funds must have the highest ratings by the three major rating agencies, according to AFSA.
“Without changes, the auto finance industry’s ability to use TALF to generate funding will remain limited,” Chris Stinebert, the financial-services association’s president and chief executive, said in a letter to Steven Rattner, President Barack Obama’s top auto-industry adviser.
Stinebert urged for the expansion of TALF to include debt of all investment grades, among other changes.
TALF, run by the Federal Reserve and Treasury Department, allows investors to borrow from the central bank on favorable terms and then use the cash to buy new securities backed by auto loans, credit-card debt and other consumer financing.
But in March and April, no TALF money was used to finance inventory for car dealers, known as dealer floorplans, according to AFSA.
