Bulletin offers digest of recent Fed programs to combat impact of coronavirus crisis

Awareness of programs in the face of the coronavirus crisis by the Federal Reserve to help consumers, businesses and state and local governments is the focus of a bulletin issued Monday by the federal regulator of national banks.

The bulletin from the Office of the Comptroller of the Currency (OCC) – OCC Bulletin 2020-41 – draws attention to five separate programs developed by the Fed to help different groups cope with the crisis: The Paycheck Protection Program Liquidity Facility (PPPLF), the Main Street Lending Program, the expanded Term Asset-Backed Securities Loan Facility (TALF), the Municipal Liquidity Facility (MLF), and the Primary and Secondary Market Corporate Credit Facilities.

The bulletin notes that the:

  • PPPLF extends credit to eligible financial institutions that originate PPP loans, taking the loans as collateral at face value.
  • Main Street Lending Program allows eligible banks to originate new Main Street loans or use Main Street loans to increase the size of existing loans to businesses, retaining a 5% share and selling the remaining 95% to the Main Street facility.
  • Expanded TALF continues to support the issuance of asset-backed securities that fund a wide range of lending, including student loans, auto loans, and credit card loans.
  • MLF purchases short-term notes directly from the states and certain counties and cities to better manage cash flow pressures.
  • Primary and Secondary Market Corporate Credit Facilities increase the flow of credit to households and businesses through capital markets through expanded size and scope.

OCC Bulletin 2020-41: Federal Reserve Lending Programs: COVID-19-Related Programs to Support Households, Employers, and Communities