Congressional Progressive Caucus wants ‘substantial’ changes to MLF

This story appeared in Bank Digest.

Congressional Progressive Caucus Co-Chairs Reps. Mark Pocan (D-Wis) and Pramila Jayapal (D-Wash) released a statement in response to the Federal Reserve’s announcement about revised pricing for its Municipal Liquidity Facility (MLF) (see 2020 No. 3337) asking the Fed to implement additional substantial changes to the MLF. While stating that the lowering penalty rates “was a needed step in the right direction,” the members of Congress said that the change “is insufficient to prevent more layoffs and economic turmoil.” According to the statement, for the MLF “to be an effective tool in our economic recovery, the Fed should align assistance to states and cities with its emergency lending offered to the private sector and extend the maturity period of the loans.” The statement follows a letter sent by the Caucus to Fed Chairman Jerome H. Powell, asking for improvements to the MLF to improve its usefulness to states and cities.