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Mnuchin rejects renewal of some Fed emergency loan programs – Washington, District of Columbia

Washington, District of Columbia 2020-11-19 18:03:33 –

Washington (AP) — Treasury Secretary Steven Mnuchin said Thursday that he would not extend some of the emergency lending programs set up …

Washington (AP) — Treasury Secretary Steven Mnuchin said Thursday that he would not extend the Federal Reserve and some emergency lending programs established to support the economy in the midst of a coronavirus pandemic.

This decision has led to brief criticism from the Fed.

“We hope that the set of emergency facilities established during the coronavirus pandemic will continue to play an important role as a backstop for a tense and fragile economy,” the central bank said.

However, in a letter to Federal Reserve Chairman Jerome Powell, Mnuchin said the Federal Reserve Board’s corporate credit, municipal lending, and main street lending programs expired on 31 December. Said it wouldn’t be updated when it expires.

Under the law, the loan facility needed the help of the Treasury to act as a backstop for the initial losses that the program could incur.

Mr Mnuchin said the Fed is demanding that unused funds allocated by Congress to run the program be returned to the Treasury.

He said this would allow Congress to reallocate $ 455 billion to other coronavirus programs. Republicans and Democrats have been stuck for months with the approval of another round of coronavirus support measures.

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