COVID-19: Federal Reserve Announces $2.3 Trillion in Loans

On April 9, 2020, acting with the approval and consent of the Secretary of the U.S. Treasury, the Federal Reserve took unprecedented additional action using its statutory emergency lending powers to provide immediate support to the national economy. In so doing, the Board of Governors of the Federal Reserve adopted a series of measures that will provide up to $2.3 trillion in credit facilities and loans to households, employers, and state and local governments, consistent with the Federal Reserve’s emergency lending powers under Section 13(3) of the Federal Reserve Act (12 U.S.C. 343(3)). In particular, the Federal Reserve will adopt or expand on the following programs: Main Street New Loan Facility (MSNLF) and Expanded Loan Facility (MSELF): The Federal Reserve will purchase up to $600 billion in loans, and the Department of Treasury, through Section 4027 of the Coronavirus Aid, Relief, and Economic Securities Act (“CARES Act”), will make a $75 billion equity investment in a single common special purpose vehicle (SPV) in connection with the MSNLF and MSELF, both of which are designed to facilitate lending to small and medium sized businesses by eligible lenders (i.e., US insured depository institutions, US bank holding companies, and US savings and loan...