The Federal Reserve and U.S. Treasury’s decision to eliminate executive-compensation limits for companies that bundle loans accepted under a new $1 trillion program indicate the rules may have hampered efforts to start the plan.

But the rules won’t apply to the Term Asset-Backed Securities Loan Facility, the New York Fed said in a document on its Web site March 3. The government separately said it will expand the TALF to support vehicle-fleet leases and loans for business, construction and farm equipment.

The change suggests the government will not limit compensation beyond firms that receive direct investments from the Treasury’s $700 billion bailout fund. Officials have not yet announced whether the requirements will be placed on firms participating in a separate effort to remove as much as $1 trillion of distressed assets from banks’ balance sheets.

The TALF, aimed at boosting the market for auto and business loans, will start disbursing funds March 25 and will probably accept securities backed by vehicle-fleet and equipment leases starting next month, the Fed and Treasury said in a statement March 3.

The Fed and Treasury “currently anticipate that asset-backed securities backed by rental, commercial, and government vehicle fleet leases, and asset-backed securities backed by small-ticket equipment, heavy equipment, and agricultural equipment loans and leases will be eligible for the April funding of the TALF,” which is scheduled for April 14, the agencies said.

Small-ticket equipment may include office gear such as telephone systems, computers and printers, while heavy equipment includes construction vehicles.

The TALF will start by offering $200 billion in loans to hedge funds and other investors to jump-start lending to consumers for autos, education and credit cards and to small businesses. The program also will help auto dealers finance the cars on their lots.

Treasury is providing $20 billion in capital from the Troubled Asset Relief Program to protect the Fed from losses. Treasury Secretary Timothy Geithner plans to increase the contribution to $100 billion, letting the Fed expand the program to $1 trillion and add other assets such as commercial mortgage- backed securities and rental-car loans.

Adding support for car-rental-fleet loans may not help the auto industry right away, said Joe Barker, an analyst at consulting firm CSM Worldwide Inc. in Northville, Michigan. Fleet sales to rental-car agencies, other businesses and government agencies accounted for 20 percent of the new cars and light trucks sold in the U.S. last year.