Fed to Disclose More Details for TALF, PPP Liquidity Programs

(Bloomberg) -- The Federal Reserve will disclose more details from two more of its emergency lending programs on a monthly basis, responding to congressional pressure for greater transparency.

The Fed will release names of participants, lending amounts and the interest rates for the Paycheck Protection Program Liquidity Facility and the Term Asset-Backed Securities Loan Facility, the central bank said in a statement Tuesday.

Congress allocated $454 billion to backstop Fed lending that could expand to as much as ten times that amount in the $2.2 trillion virus relief bill signed into law by President Donald Trump in March. The central bank has faced congressional pressure related to disclosures and in April said it would share information about participants in its facilities backed by funding provided by the CARES Act.

Lawmakers from both parties had been pressing the Fed to spell out which companies were getting assistance, in an effort to make sure that taxpayer money was going where it was intended. There has also been growing public frustration that small businesses had been beaten to funds by bigger companies with better access to banks and lawyers.

Transparency Commitment

“The Federal Reserve remains committed to providing the public and Congress with detailed information about our efforts to support households and businesses during this unprecedented time,” said Federal Reserve Board Chair Jerome Powell in the statement.

The PPP facility supports a U.S. Treasury program to funnel money to small businesses to encourage them to keep workers employed. The TALF supports the flow of credit for consumers and businesses and will lend up to $100 billion for purchases of asset backed securities based on a range of financing including auto and student loans, credit cards, equipment leases and leveraged loans.

The Fed also updated its criteria for eligible borrowers and eligible collateral as part of the TALF facility, which is similar to an earlier disclosure.

“The main difference with respect to previous term sheets seems to be that the Fed updated the pricing of the loans to TALF investors to make them a bit more reflective of the different risk underlying different types of ABS,” said Roberto Perli, a former Fed economist and partner at Cornerstone Macro LLC in Washington.

“For example, loans to invest in CLO collateral are now the most expensive, while loans to invest in SBA loans are cheaper,” he said, referring to collateralized loan obligations and the Small Business Association.

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