Clyburn to Mnuchin, Powell: “Implement Main Street Lending Program to Support Economic Recovery”
Washington, D.C. (August 6, 2020) -- Today, Rep. James E. Clyburn, Chairman of the Select Subcommittee on the Coronavirus Crisis, sent a letter to Treasury Secretary Steven Mnuchin and Federal Reserve Board Chair Jerome Powell, demanding the agencies make changes to the Main Street Lending Program to help workers and businesses as Congress intended.
“The Select Subcommittee is concerned that Treasury and the Fed have been slow to implement this program, appear to be prioritizing big businesses over the small and mid-sized businesses who have been hit the hardest by the pandemic, and have not established robust and enforceable job retention requirements,” the Chairman wrote.
Plagued by delays and bureaucratic infighting since being announced in April, the Main Street Lending Program only issued its first loans in July. Yesterday, the Fed released data to Congress showing that only eight loans have been issued, totaling $81 million. This leaves more than 99.9% of the $600 billion in available Fed lending unused as the economic crisis continues to take an unprecedented toll on American workers and small businesses.
The CARES Act created a lending facility specifically designed to support small and mid-sized businesses, which required recipients to retain at least 90 percent of their workforce. Instead of implementing this program, the Fed used CARES Act funds to create the Main Street Lending Program—and left out the job retention target in the Act. Fed staff confirmed the absence of this job retention target during a June 30 staff briefing.
“Given the country’s record-high levels of unemployment, the Select Subcommittee is examining why it has taken Treasury and the Fed so long to implement the Main Street Lending Program, and why Treasury and the Fed decided to prioritize big businesses over protecting small businesses and American jobs. I urge Treasury and the Fed to instead ensure the Main Street Lending Program is accessible to the small and mid-sized businesses who most need and deserve this assistance and to protect the workers this program was designed to help.”
The Chairman’s letter seeks information and documents on the decision to eliminate the job retention requirement from the Main Street Lending Program, delays in implementation, and whether the agencies are taking other steps to ensure the program supports jobs.
Click here to read today’s letter to Secretary Mnuchin and Chairman Powell.