The Federal Reserve’s requests from borrowers for loans to buy asset-backed securities fell 64 percent 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 purchase securities backed by auto and credit-card loans, the New York Fed bank said today on its Web site. The Fed provided $4.7 billion in loans last month to purchase 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, who are wary of government restrictions or the chance of future intervention.

 

 

 

 

 

 

“This is still a work in progress,” said James Grady, managing director in New York at Deutsche Asset Management, which has about $240 billion in assets under management. At the same time, “there has been some headway,” he said.

The total amount of securities eligible for TALF loans in April plunged to about $2.6 billion from $8.3 billion in March. The number of securities deals was unchanged at four.