Fed's Powell says crisis lending programs will be 'up and running' by end of May

The massive $2.2T stimulus package made $500B in emergency lending available to the Federal Reserve and Treasury Department

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Federal Reserve Chairman Jerome Powell said Tuesday during congressional testimony that all of the central bank's crisis-lending programs will be up and running by the end of May.

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"On Main Street, and frankly all the other facilities, we expect them to be stood up and ready to go at the end of this month," Powell told the Senate Banking Committee while testifying via videoconference on the CARES Act coronavirus relief bill. "That’s our expectation, and the funds should be flowing directly after that."

The massive $2.2 trillion stimulus package made $500 billion in emergency lending available to the Federal Reserve and Treasury Department.

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The Treasury Fund set aside $46 billion for loans and loan guarantees to the airline industry. None of that money has been distributed, although the Treasury has received applications for the loans and is reviewing them. Up to $25 billion is available for passenger airlines and businesses certified to perform inspection, repair, replace, or overhaul services and ticket agents.

The remainder of the fund -- $454 billion -- was designated to support Federal Reserve lending programs to businesses, states and municipalities.

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So far, only one of the lending facilities established by the Fed has received money, according to a report released Monday by a bipartisan oversight committee. The Treasury has disbursed $37.5 billion of the funds to the Fed's Secondary Market Corporate Credit Facility, which is supposed to purchase corporate debt.

The Treasury Department has announced five lending facilities to deploy other portions of the money, but has not invested in them yet. That includes the Main Street Lending Program, which the central bank launched to help get money to small- and medium-sized businesses, and the Primary Market Corporate Credit Facility, designed to maintain the flow of credit to large employers.

"All of them are complex and challenging," Powell said. "Main Street is in a class by itself, really. It’s not the bond market. These are small- and medium-sized businesses ... We are trying to enter that world and make loans to qualifying borrowers."

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