I doubt anyone can know how much it might help, but the desperation apparent in this move should be obvious. From Bloomberg:
The U.S. Treasury and Federal Reserve will unveil as soon as today a lending program to shore up the consumer-finance market, using money from the government’s $700 billion rescue, two people familiar with the effort said.
The Treasury and the Fed will help fund new loans packaged into securities for sale to investors, the people said. Treasury Secretary Henry Paulson, who scheduled a press conference for 10 a.m. New York time, said two weeks ago that he wants to spur lending for automobile purchases and college education while also reducing the cost of credit-card debt.
If we really need something like a half trillion dollar (or more) in stimulus spending per year, as learned economists seem to be suggesting everywhere, taking some of the leftover $700 billion and using it to provide cheap loans sounds pretty much like a Band-Aid. Consumer confidence is completely shattered. Hard to see how it improves auto sales much. Maybe people pay off some credit cards and take some classes.
But, it is something. The Fed can’t lower interest rates to any effect, so what the heck.