#Fed #lending #MainStreet #aid #relief #money
A bipartisan Congressional panel overseeing the implementation of some coronavirus aid/relief programs urged the Fed and US Treasury to take more risk with taxpayer dollars and increase outreach efforts to deliver more aid/relief to small and medium-sized businesses struggling because of the C-19 chaos.
The panel’s recommendations Keyed around the $600-B Main Street Lending Program, which has seen modest use since launching in July, more than 3 months after it was announced.
Some 522 lenders had registered with the program as of 10 August though only 160 publicized they were accepting Main Street loan applications from new customers.
The Fed had purchased just $472-M in Main Street loans as of last Wednesday.
Boston Fed President Eric Rosengren, whose regional bank runs the program, said during a hearing with the Congressional panel earlier this month that he expects more banks and businesses will sign up if the economy worsens.
The Congressional oversight panel suggested the Fed consider using more of its regional banks, not just the Boston Fed, to improve operation of the program and experiment with potential changes.
The panel encouraged the Fed to look at other ways to make money available to a broader set of companies, for example through “asset-backed lending and second-lien lending” against hotels or other commercial real estate. That could potentially make the Fed a mortgagee to real estate investment trusts, private equity firms and other property investors.
The oversight committee plans to hold a panel in the coming weeks about the Municipal Liquidity Facility, which supports state and local governments.
New York’s Metropolitan Transportation Authority (MTA) became the 2nd issuer to tap the Fed’s municipal lending program last week when it sold $450.7-M of debt to the facility, which is administered by the New York Fed.
Have a healthy weekend, Keep the Faith!
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