Money | Henry Paulson Fed Launches $800B Programs to Unlock Lending Will lend to investors buying credit-backed securities By Kevin Spak Posted Nov 25, 2008 7:35 AM CST Copied President George W. Bush, accompanied by Treasury Secretary Henry Paulson, makes a statement on the economy, Monday, Nov. 24, 2008, outside the Treasury Department in Washington. (AP Photo/Gerald Herbert) The Fed today unveiled a new $200 billion lending facility designed to thaw the freeze in consumer credit, the Wall Street Journal reports. The facility will lend to investors who want to buy securities backed by credit cards, auto loans, student loans, and loans to small businesses. The Fed also committed to buying up to $600 billion in debt issued by housing lenders. The new facility, which will draw $20 billion from the Treasury's TARP funds, could eventually be extended to securities backed by mortgages as well—the assets TARP was originally set up to buy. Bloomberg sees the Fed starting to use some of the unorthodox tools that Chairman Ben Bernanke outlined as a Fed governor 6 years ago. “Clearly, the Fed and the Treasury are beginning to take a large amount of credit risk,” a former regional Fed president tells Bloomberg. Read These Next Beyonce leaves national anthem unfinished. A space capsule carrying ashes of 160 people crashed in the ocean. A lesson in minding your own business ... at 30,000 feet. The death toll in the Texas floods has risen to 27, including 9 kids. Report an error