The Federal Reserve Bank of New York said Tuesday that it lent $1.7 billion through the Term Asset-Backed Securities Loan Facility (TALF), dramatically less than the $4.7 billion it distributed when the program launched last month.

The results could validate concerns that investors may shy away from working closely with the government in response to congressional threats to add restrictions on companies receiving public funds.

The New York Fed lent $896.8 million to investors pledging securities backed by card loans as collateral. The remaining $811 million will go to investors with securities backed by auto loans. No loans were made against securities backed by student, small-business, equipment, floor plan or servicing loans.

Under the facility, the New York Fed lends to investors, who use the money to buy securities backed by consumer loans with the goal of liquefying these sectors.

Also Tuesday, the Federal Reserve Board said it did not lend the full $150 billion it offered through a cash auction.

The auction, which took place Monday, attracted just $106.3 billion. The Fed accepted each of the 105 bids.

The Fed's previous cash auction, held March 23, was also undersubscribed. That $150 billion sale garnered 103 bids worth $101.6 billion.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.