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Is Fed taking too long on middle-market loan relief?

May 11, 2020, American Banker

Jeremy Newell is quoted in the American Banker regarding the Federal Reserve’s management of middle-market loan relief. Mr. Newell says the Main Street Lending Program is “just fundamentally different than anything the Fed has ever undertaken in its other emergency liquidity facilities” and likely requires more time to make sure all processes are in place. He expects that it will take the Fed at least another few weeks to continue to build those procedures and fully operationalize the program before it gets to the point where it's actually in a position to be able to begin to purchase the participation interests that is the key driver of this program.

He adds that although PPP and the Main Street Lending Program are different in substance, their origins as business lending programs created under the CARES Act and backed by taxpayer funds put them under the microscope. “Given the recent PPP experience, I suspect that many in the market would on balance prefer to see a more deliberative process, whereby the rules of the road are clearly defined and articulated at the outset, even if that means that it takes a little bit longer for the program to go live,” he says.

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