On May 19th, the U.S Senate Banking Committee held a virtual hearing.  The Committee questioned Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell about how they are using the $2 trillion CARES Act stimulus funds.

CARES Act Programs were discussed.  Updates are below.

Chairman Powell for updates from the Federal Reserve:

  • Main Street Lending Program – “preparing to launch” per Chairman Powell
    • When pressed by Senator Pat Toomey (R) on a more definitive launch date, Powell said he expects the program to be operationa by the end of May or first few days of June
  • Municipal Liquidity Facility established under section 13(3) authority to purchase short-term debt directly from U.S. states, counties, cities, and certain multistate entities.
  • The two corporate credit facilities, the Main Street Lending Program, and the Municipal Liquidity Facility all have equity provided by the Treasury Department to protect the Federal Reserve from losses

As part of the CARES Act, $454 billion was earmarked for Federal Reserve lending facilities.

Treasury Secretary Mnuchin for the US Treasury:

  • Paycheck Protection Program
    • Senators criticized the Paycheck Protection Program and said small businesses have had trouble navigating it. Democratic Sen. Kyrsten Sinema of Arizona asked why it’s taking so long for small businesses to receive guidance on loan forgiveness.
    • Secretary Mnuchin made the following comment regarding the 8 week covered period “We’d like to get a bipartisan technical fix,” he noted. “Companies are really having issues with not necessarily being able to use it during that eight weeks.”
    • The most recent demographic information on the PPP can be viewed HERE.
  • Economic Impact Payments – Treasury issued more than 140 million Economic Impact Payments for over $240 billion to provide direct relief to millions of Americans. The typical family of four received $3,400 per Mnuchin.
  • Close to $150 billion has been distributed to states, local, and tribal governments through the Coronavirus Relief Fund for essential services.
  • $25 billion in payroll support to the airline industry to protect this critical sector of our economy has bee approved.
  • Exchange Stabilization Fund – Mnuchin noted the following facilities have been approved by Treasury:
    • The Commercial Paper Funding Facility
    • Primary Dealer Credit Facility
    • Money Market Mutual Fund Liquidity Facility
    • Term Asset-Backed Securities Loan Facility
    • Primary Market Corporate Credit Facility
    • Secondary Market Corporate Credit Facility
    • Main Street Business Lending Program
    • Municipal Liquidity Facility,
    • PPP Lending Facility.
  • Treasury has committed up to $195 billion in credit support under the CARES Act. There is $259 billion available to create or expand programs as needed.

Please reach out to cares@brinkersimpson.com with questions.

We are in this together,

Brinker Simpson & Company, LLC

Disclaimer: This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice & cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s).