Rep. Paul Kanjorski, D-Pa., has introduced legislation to allow the 12 Federal Home Loan Banks to assist student loan lenders after the Federal Reserve declined to use its emergency powers to grant "non-bank" lenders access to a $200 billion lending facility that the Fed launched last month to help resolve liquidity problems facing big Wall Street firms.

The legislation, introduced late Tuesday, comes after Fed chairman Ben Bernanke said in a letter to the congressman that "lending to non-depositories" such as student loan lenders would "raise serious public policy issues" because they, unlike the Wall Street firms, are not in situations that pose a significant risk of systemic financial crisis.

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