Commercial real estate companies are among those left out of the Federal Reserve’s middle-market relief program, but House members said they need government-backed financing to navigate the pandemic as much as anyone.
The Federal Reserve and the Treasury Department released a set of FAQ's aimed to clearing up misconceptions about the Main Street Lending program and encouraging more bank participation.
With only a fraction of the funds allocated being used, Federal Reserve Chair Jerome Powell said the central bank is considering tweaks to the middle-market rescue program in an appeal to lenders wary of taking on added risk.
The Senate Banking Committee met Wednesday to review central bank lending facilities such as the Main Street Lending Program, which provides bank-issued loans to middle-market firms. But some lawmakers on the panel said the focus of pandemic relief has been misplaced.
Only one of the 118 loans bought by the Federal Reserve through Aug. 31 was close to the $250,000 minimum in the rescue program, aimed small to midsize businesses hurt by the pandemic.
The head of the Federal Reserve Bank of Boston said the central bank had acquired stakes in 32 business loans as of Monday, four times the amount from two weeks earlier.
At its inaugural hearing, the committee appointed by lawmakers to oversee CARES Act implementation pressed for answers about why the Main Street Lending Program is off to such a slow start.
Just eight loans had been made as of late July, six of them through a single community bank in Florida, according to new data on the federal rescue program for small and midsize companies hurt by the pandemic.
The three-month extension for the central bank's lending programs is one of several recent steps by policymakers to stabilize the economy as the coronavirus pandemic stretches through the summer.
