Bankers say they’re still trying to figure out if the Fed’s complex loan-buying vehicles will help them cater to the needs of midsize commercial customers hammered by the economic shock from the coronavirus outbreak.
Midsize businesses and state and local governments are among the beneficiaries of the central bank's latest $2 trillion effort to mitigate the economic damage caused by the coronavirus pandemic.
Many banks were hitting their limits for lending to small businesses devastated by the coronavirus outbreak. They say the Fed's decisions to help fund additional loans and relax capital requirements will resolve many of their problems.
The Fed's actions are designed to ensure the flow of credit to midsize businesses and state and local governments hit hard by the economic impact of the coronavirus pandemic.
The Federal Reserve and other regulators are planning to grant a sweeping capital break for banks providing loans to small businesses as part of the government's response to the coronavirus-fueled economic crisis.
The Federal Reserve is temporarily altering the growth restriction it placed on Wells Fargo in 2018 so that the bank can make additional loans to small and midsize business that need funding to weather the coronavirus pandemic.
The lending facility is for companies with more than 500 employees that are disqualified from the relief program for small businesses and too small for federal loans reserved for larger companies.
The OCC and FDIC are holding off on easing debt limits in response to the coronavirus pandemic, leaving billions of dollars locked up at banking subsidiaries that could be used for lending amid the deepening economic crisis.
