FED-TALF-REQUESTS-UPD

The Federal Reserve’s requests from borrowers for loans to buy asset-backed securities fell 64% from last month as investors balked at visa limits and possible political efforts to tax earnings.

Investors sought $1.71 billion from the Term Asset-Backed Securities Loan Facility to buy securities backed by auto and credit-card loans, the New York Fed bank said Tuesday. The Fed provided $4.7 billion in loans last month to buy securities in the TALF’s first monthly round.

The decline hinders Fed Chairman Ben S. Bernanke’s efforts to lower borrowing costs and extends a slow start for a program that the Obama administration is using as a cornerstone of plans to revive credit and end the recession. The Fed is struggling to lure investors, such as hedge funds, that are wary of government restrictions or the risk of future intervention.

“There are some folks who have decided they just don’t want to play in any government programs,” said Stephen Stanley, chief economist at RBS Securities Inc

TALF investors are subject to a provision in the $787-billion stimulus package that makes it tougher for recipients of federal bailout funds or Fed emergency loans to hire skilled workers from abroad.