Dodd-Frank News Center

Rep. Tlaib asks Fed Chair about support for companies who are laying off workers

This story appeared in Bank Digest.

Rep. Rashida Tlaib (D-Mich) has sent a letter to Fed Chair Jerome Powell requesting clarity on why the Fed is financially “propping up firms that endanger the health of Americans, while failing to sufficiently help cities and municipalities in dire need.” She referenced a report released by the House Select Committee on the Coronavirus showing that the Fed’s Secondary Market Corporate Credit Facility (SMCCF) portfolio included the bonds of 95 companies that paid out dividends to their shareholders even as the companies laid off everyday workers, including $15 million worth of Marathon Petroleum corporate bonds. Rep. Tlaib states that this stance is incongruous with the Fed's mandate to maximize employment.

Members of Congress offer help to investigate PPP loan fraud

This story appeared in Bank Digest.

A bipartisan group of 23 members of Congress have sent a letter to the Small Business Administration and the Treasury Department asking what tools and resources SBA may need, that Congress could provide through appropriations and statutory authority, to be able to fully investigate PPP loan fraud. The letter follows a report published by the SBA Inspector General in July 2020 that stated there are “strong indicators of widespread potential fraud” within two of the fiscal relief programs enacted and expanded by Congress to provide relief to small businesses as they face the economic crisis brought upon by the COVID-19 pandemic.

Treasury and SBA questioned about PPP loan forgiveness applications

This story appeared in Bank Digest.

Four Democratic members of Congress have sent a letter to the Department of Treasury and the Small Business Administration (SBA) urging them to provide an update on Paycheck Protection Program (PPP) loan forgiveness applications. The Treasury Department and the SBA have received nearly 100,000 applications for PPP loan forgiveness. The letter expresses disappointment in the lack of PPP loan forgiveness approvals and requested more information about the delays, stating “this is far too long for borrowers and lenders to be sitting waiting on updated information—and leaves them in an unnecessarily difficult position.”

Fed Chair testifies at Coronavirus subcommittee hearing

This story appeared in Bank Digest.

The Select Subcommittee on the Coronavirus Crisis has held a hybrid hearing on Sept. 23, 2020, to examine the current state of the job market, the federal government’s economic recovery efforts during the coronavirus crisis, how the crisis has exacerbated inequality, and the need for additional fiscal stimulus. Fed Chair Jerome H. Powell submitted his testimony on the Fed’s efforts to alleviate the economic fallout of the ongoing pandemic.

Financial Services Committee hears from Treasury, Fed Chairs on economic recovery efforts

This story appeared in Bank Digest.

The House Financial Services committee has held a hybrid full Committee hearing entitled, “Oversight of the Treasury Department’s and Federal Reserve’s Pandemic Response.” Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell both testified on the Administration’s ongoing response to the COVID-19 pandemic and efforts to rebuild the economy.

 

Financial Services Committee hears from FHFA Director on agency response to pandemic

This story appeared in Bank Digest.

The House Financial Services committee has held a hearing examining the Federal Housing Finance Agency’s response to the COVID-19 pandemic, especially with regard to Freddie Mac and Fannie Mae. FHFA Director Mark A. Calabria testified at the hearing about his agency’s regulatory oversight over Fannie Mae and Freddie Mac and discussed the possibility of releasing Fannie and Freddie from FHFA conservatorship, but not by the end of 2020. Calabria discussed his agency's policy response to the pandemic, especially protections put into place to support of renters and homeowners struggling to pay for housing due to the pandemic. Committee Chair Maxine Waters (D-Calif) noted that Housing and Urban Development Secretary Ben Carson was also supposed to appear at the hearing but could not attend.

 

Financial Services Committee considers need state and local pandemic relief

This story appeared in Bank Digest.

The House of Representatives Financial Services Committee has held a virtual hearing on Sept. 10, 2020, examining the need for additional aid for state and local governments. Several governors submitted statements for the hearing, explaining the costs state governments have faced in fighting the COVID-19 pandemic. Overall state spending needs are expected to increase considerably, while the economic recession caused by COVID-19 has led to a sharp decline in sales tax and other critical sources of state government revenue. According to the committee Memorandum, funds allocated under the Coronavirus Aid, Relief and Economic Security (CARES Act) “are insufficient to address the challenges state and local governments face.” On April 11, the National Governors Association issued a bipartisan statement calling for Congress to pass $500 billion in additional assistance.

 

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.

Treasury and SBA agree to make additional PPP data available

This story appeared in Bank Digest.

The Treasury Department and Small Business Administration have agreed to make public additional data regarding the SBA’s Paycheck Protection Program. The agreement with bipartisan leaders of the Senate Small Business Committee is intended to ensure that the interests of both transparency and protections for small businesses are served. Representative James E. Clyburn (D-SC) issued a statement on the agreement in which he said he was pleased that “Treasury and SBA took a step in the right direction by announcing they will release the recipients of ‘nearly 75 percent of the loan dollars approved.’ However, this is far from the full transparency that American taxpayers deserve.” The SBA has also issued a report providing PPP data disclosed through June 20, 2020, including total dollars approved, loan sizes, lender sizes and types, loans approved by state, top lenders, loans by industry sector, and funds remaining.

Beatty introduces bill to expand access to PPP

This story appeared in Bank Digest.

Representative Joyce Beatty (D-Ohio) is introducing the Making Opportunities a Reality for Entrepreneurs (MORE) PPP Act, which is intended to ensure that the nation’s small businesses, including minority-owned businesses, independent contractors, and 1099 workers, will have fairer access to participation in the Paycheck Protection Program.

Beatty said, “Since the very beginning of this public health crisis, I have consistently fought to get desperately-needed funding into the hands of small business owners like cosmetologists, barbers, nail technicians, family restaurants, those working from gig to gig, sole proprietors, and self-employed individuals.” She said her bill “will do just that by injecting additional resources into the PPP, setting aside targeted funding for entities with 25 or fewer employees, and instituting safeguards to make sure small businesses—not big, publicly traded companies—can obtain the support they need to weather the virus’ financial fallout and ultimately keep their doors open.”