Government officials testifying before Congress Friday applauded the Term Asset-Backed Securities Loan Facility program, known as TALF, for netting $600 million in income. The officials claim TALF kept funding sources alive for numerous student, auto and business loans during the three-year credit crunch that began in late 2007. "We believe that the TALF program represents a very successful use of TARP funds," said William Nelson, the deputy director of the division of monetary affairs at the Federal Reserve. "The TALF program helped restart the ABS markets at a critical time, thereby supporting the provision of credit to millions of American households and businesses. Moreover, its careful design has protected the taxpayer, and in the end, the program almost certainly will return a net profit to the Treasury." TALF was created by the Fed and Treasury Department in 2008 after creditors steered away from short-term funding markets, cutting down on investor demand for asset-backed securities. Since these financial instruments provide liquidity for lenders to make consumer and business loans, TALF was created to give loans to investors for the purchase of newly issued, highly rated ABS. "The Federal Reserve Board initially authorized the TALF to make $200 billion in loans, but because of the improvement that occurred in financial markets in the latter half of 2009, only about $70 billion in loans were extended under the program," Nelson said Friday while testifying before a congressional panel that oversees the Troubled Asset Relief Program. Nelson added that the "issuance of nonmortgage ABS jumped to $35 billion over the first three months of TALF lending in 2009, after having slowed to less than $1 billion per month in late 2008." Assistant Treasury Secretary Tim Massad also credited the program Friday for restarting the asset-backed securitization markets. "Since TALF was launched in March 2009, new issuances of asset-backed securities have averaged $10.5 billion per month, compared to less than $2 billion per month at the height of the crisis," Massad said. Write to Kerri Panchuk.