Chamber proposes enhancements to Main Street Lending Facility and Other Programs to Boost Financial Stability
WASHINGTON, D.C. - The U.S. Chamber of Commerce today provided comments to the Treasury and the Federal Reserve commending the creation of lending facilities that will provide necessary liquidity to medium and large businesses. The Chamber also encouraged further work to continue restoring confidence to the business community and financial markets during the COVID-19 pandemic.
“The harm to the business community and their workers caused by the COVID-19 pandemic has been unprecedented. Businesses need the federal government to provide resources and reassurances in the short-term so they can weather the storm and so our financial markets can function efficiently,” said Tom Quaadman, Executive Vice President, Center for Capital Markets Competitiveness, U.S. Chamber of Commerce. “The Federal Reserve will, and already is, playing a key role for restoring confidence to the business community and financial markets. Our proposed enhancements will allow Main Street to receive aid quickly and for taxpayers to get the biggest bang for their buck.”
The Chamber’s comments on a set of important programs announced by the Federal Reserve last week, including the creation of a Main Street Lending Program and the Paycheck Protection Program Lending Facility, among others, highlight the importance of these programs and more importantly provide recommendations that will help these programs reach their full potential.
On the Main Street Lending Program:
“The Main Street Lending Program is critical for middle market businesses to weather this storm and will help businesses retain employees and pay operating expenses until the crisis recedes,” Quaadman said in the letter. “As the Federal Reserve and Treasury consider the scope and conditions of this program, we urge both agencies to keep in mind the unique nature of the COVID-19 economic shock, and believe the terms and conditions of the Main Street Lending Program should reflect – to the greatest extent possible – current market practices for lending, and should not seek to create new, lasting standards.”
On the Paycheck Protection Program Lending Facility:
“The Small Business Administration’s Paycheck Protection Program is a lifeline for countless small businesses and without additional funds, businesses will not receive the loans they so desperately need. We commend the Federal Reserve for offering liquidity to financial institutions through the Paycheck Protection Program Lending Facility, however we do believe there are clarifications and adjustments that can be made to enhance the impact of the facility,” said Quaadman.
“Importantly, the Chamber supports the Federal Reserve providing short-term liquidity during this time of crisis, but we believe it is important that the private market remain the long-term provider of liquidity to the economy,” continued Quaadman.
The Chamber provided additional recommendations on the Term Asset-Backed Securities Loan Facility, the Primary Market Corporate Credit Facility, the Secondary Market Corporate Credit Facility, the Municipal Liquidity Facility, the Commercial Paper Funding Facility, and liquidity challenges for mortgage servicers. Click here to view the full letter.