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McHenry, Crapo Call on Treasury and Federal Reserve to Fully Utilize COVID-19 Relief Funds

Washington, Aug 10 -

Today, Republican leader of the House Committee on Financial Services, Patrick McHenry (R-NC), and Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, Mike Crapo (R-ID), urged the Treasury Secretary and Federal Reserve Chairman to utilize the remaining funds in the Exchange Stabilization Fund (ESF) to its fullest extent. The ESF provides a critical economic backstop with the potential to unleash trillions of dollars in liquidity to support businesses and employees in need.

In their letter to Secretary Mnuchin and Chairman Powell, the Republican leaders stated, “the purpose of the ESF is to provide the Treasury Department and the Federal Reserve maximum discretion to expand MSLP [Main Street Lending Program] and support more businesses.” The Members called on the Treasury Secretary and Federal Reserve Chairman to “do more with the ESF and the MSLP to provide support to Main Street businesses, their workers, and our American economy.”

Read the full text of the letter here or below.

Dear Secretary Mnuchin and Chairman Powell:

House and Senate Democrats continue to block legislation that is critical to support our nation’s ongoing COVID-19 response and economic recovery, leaving millions of businesses and their employees in jeopardy. We urge you to continue your efforts to support these businesses and their employees by utilizing the remaining funds appropriated by Congress to the Exchange Stabilization Fund (ESF) to its fullest extent.

The CARES Act provides a critical economic backstop with the potential to unleash trillions more in liquidity. That liquidity will allow our financial institutions to continue to provide credit flows to businesses and ultimately support workers across the country. Specifically, the ESF supports the Main Street Lending Program (MSLP) to help small and mid-sized businesses and their employees that were otherwise in good financial standing before the public health crisis. The purpose of the ESF is to provide the Treasury Department and the Federal Reserve maximum discretion to expand MSLP and support more businesses.

The Treasury Department and the Federal Reserve should do more with the ESF and the MSLP to provide support to Main Street businesses, their workers, and our American economy. Congress was clear in its intent; now it’s time to implement it. The support that an enhanced MSLP will provide to the overall economy, our Main Street businesses, and their workers will outweigh the potential losses to the Treasury.

Sincerely,

Patrick McHenry

Ranking Member

House Committee on Financial Services

Mike Crapo

Chairman

Senate Committee on Banking, Housing, and Urban Affairs