Fed Sets Dec. 14 Main St. Loan Cutoff After Extension Denied

(Bloomberg) -- The Federal Reserve told banks they should submit loans to its Main Street Lending Program by Dec. 14, following the decision last week by Treasury Secretary Steven Mnuchin to allow the facility to expire at the end of the year.

“It is unlikely that any loan submitted to the portal after Dec. 14, 2020, will be processed in time for purchase by the Main Street” special purpose vehicle, the Boston Fed said Wednesday in an update to its frequently asked questions on the program.

The Trump administration moved last week to end five of the Fed’s emergency pandemic lending programs and asked it to return several hundred billion dollars of unused funds to the Treasury so the money could be spent elsewhere. The Fed, which publicly disputed the decision and said it preferred the programs remain in place, said Friday it would comply with the request.

The Boston Fed also said any new financial institutions wanting to participate should initiate registration by Dec. 4.

The Main Street program is among five Fed lending facilities backed by money from the Cares Act, authorized by Congress in March to help support the economy through the pandemic. All were scheduled to expire on Dec. 31.

Lending in Main Street has been subdued, with the Fed having bought just $5.3 billion such loans, out of a possible $600 billion.

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