The Fed will continue to support PPP loans until June 30
WASHINGTON – The Federal Reserve will extend the liquidity facility strengthening the paycheck protection program for three months while allowing other emergency loan programs to expire on March 31, the agency said on Monday.
The Fed has offered low-interest loans to lenders through the facility in an effort to expand the reach of PPP, a massive bailout program administered by the Small Business Administration to provide forgivable loans to struggling businesses. the pandemic. The Paycheck Protection Program Liquidity Facility, or PPPLF, provided non-depository institutions with their first access to Fed funding.
Community development finance institutions and non-bank SBA lenders had pressured the Fed for an expansion of the facility, arguing that they were relying on the program to fund new creations and would likely not be able to participate if the facility closed.
The Fed, with support from the Treasury Department, has twice extended the life of the PPLF. It moved an original August end date to December 31, and then to March 31. With the latest expansion, the program will remain open until June 30.
However, the central bank has said it will not extend its other emergency lending facilities still in place beyond their current expiration date of March 31.
In a press release, the Fed said these programs – the Commercial Paper Financing Facility, the Money Market Mutual Fund Liquidity Facility and the Primary Trader Credit Facility – had “not been used. significantly since last summer “.
The Fed’s Commercial Paper Finance Facility and Money Market Mutual Fund Liquidity Facility used funds from the Treasury’s foreign exchange stabilization fund, unlike the Primary Trader Credit Facility and PPPLF.
In November, the Fed rejected the Treasury’s request to return funds allocated by Congress for five separate emergency lending programs, including the Main Street Lending Program. Central bank finally accepted to return the money, which consequently closed these facilities at the end of 2020.