Fed Releases Loan Details on Paycheck Protection Facility
(Bloomberg) -- The Federal Reserve on Saturday published a spreadsheet of thousands of loans to regional banks in support of the Treasury Department’s Paycheck Protection Program to aid small businesses during the Covid-19 pandemic.
A breakdown of where the money went by state shows that as of May 6, the most recent date for which loan details were provided, lenders based in Utah and California had received the most, about $2.96 billion each. They were followed by New Jersey at $2.5 billion and Wisconsin at $1.75 billion.
New York, the nation’s fourth most populous state and the epicenter of the coronavirus pandemic in the U.S., got a relatively paltry $804 million, coming in 15th.
The PPP is designed to encourage small businesses to keep workers on their payrolls for eight weeks, while much of the U.S. economy is shuttered to limit virus spread. The result has been historic plunges in sales, manufacturing output and employment, threatening the viability of thousands of enterprises.
The Fed, in an unusual act of fiscal cooperation, is providing banks with cash for the PPP loans to help free up bank balance sheet capacity. The Fed system had $40.6 billion PPP loans on its balance sheet as of May 13. The program went operational on April 16.
The spreadsheet -- published as part of the Fed’s effort to be transparent about where virus assistance backed by taxpayer money is going -- shows more than 3,000 individual advances by regional Fed banks to almost 600 lenders located across the nation.
Provided the terms of the loan are met, the loans will be fully forgiven. Since they in effect turn into grants, they represent a low risk for the Fed so long as the businesses meet government requirements.
The Fed has launched nine emergency lending programs to keep credit flowing during the pandemic, including direct purchases of corporate debt. It plans to share monthly details on several of these facilities.
But the beneficiaries of programs aimed at easing strain in the commercial paper market, money markets and among dealers in U.S. Treasuries will be kept under wraps. The Fed argues that naming borrowers from those programs could undermine investor confidence in the institutions tapping the facilities, and create the risk of a run.
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