Tuesday's hearing on the CARES Act was dominated by bickering over Treasury's decision to shut down the Fed's emergency lending facilities, drowning out pleas from some lawmakers for more aid.
The latest bipartisan plan to accelerate the economic recovery would appropriate roughly $300 billion for the Paycheck Protection Program, but the legislative package still faces long odds in the divided Congress.
Treasury Secretary Steven Mnuchin called on the Federal Reserve Thursday to let several of its emergency lending facilities expire at yearend and return unused funds provided by Congress. But the central bank wants the programs to continue.
Underwhelming participation in the middle-market loan program has forced the central bank to reduce the minimum borrowing amount for the third time, to $100,000.
Businesses that received Paycheck Protection Program loans and Economic Injury Disaster advances discovered later they can't get full forgiveness. Lenders want the rules changed.
Defaults have been milder than expected thanks to government relief and stricter underwriting. But with the crisis dragging on and policymakers unable to agree on a stimulus plan, loans to highly indebted companies remain at risk.
Executives are urging Congress and the White House to prioritize another round of help for businesses amid concerns that the continuing restrictions on reopening could lead to more loan defaults.
The banking giant may be sitting pretty with plenty of money reserved for bad loans — or it could have to set aside billions more in coming quarters. It hinges on an ongoing U.S. recovery and the passage of a new stimulus package.
