The Federal Reserve will disclose the names of borrowers from its emergency lending facilities backed by U.S. taxpayer money from the $2.2 trillion coronavirus rescue bill, following congressional pressure for transparency.
The Fed will publish the names and details of participants in its facilities set up in the CARES Act, as well as the amounts that were borrowed and the interest rate charged on its website at least every 30 days. It will also report the overall costs, revenues and fees of each of the facilities.
“The Federal Reserve is committed to transparency and accountability by providing the public and Congress detailed information about our actions to support the economy during this difficult time,” Chairman Jerome Powell said in a statement.
Lawmakers from both parties had been pressing the Fed to spell out which companies were getting assistance, amid growing public frustration that money meant for small businesses had been snapped up by bigger companies with better access to banks and lawyers.
“This is a significant victory for the public,” tweeted Bharat Ramamurti, a member of the Congressional watchdog appointed to scrutinize implementation of the Fed and Treasury’s virus-relief work. “We will need to look carefully at the first report to see if other information is needed but this is a very good step.”
As part of the Cares Act signed into law late last month, the Fed established programs aimed at lending to small and mid-size businesses, states and municipalities and large corporations. Five of those six facilities are not yet up and running. It was not immediately clear whether the same disclosure terms would apply to the three Fed facilities launched prior to the passage of the Cares Act, which collectively have lent out more than $80 billion.
Congress appropriated $454 billion in the Cares Act to support lending efforts by the central bank that can be leveraged into trillions of dollars of credit. The Fed is setting up its emergency programs under Section 13-3 of the Federal Reserve Act, which outlines rules for disclosure of loan details to Congress.
The Fed did not disclose individual borrower details in its facilities following the 2008 financial crisis until it was forced to do so by the courts. Its reluctance to make such information public stems from the concern that it may incite market panic or disincentivize borrowers from taking advantage of the programs for fear of resulting stigma.
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