Yale School of Management

Posts by CARES Act

Federal Reserve Expands Eligibility for Municipal Liquidity Facility

May 4, 2020

On April 27, the Federal Reserve announced an expansion in scope and duration of the Municipal Liquidity Facility (MLF), a new facility established on April 9 to alleviate the funding needs of cities, counties, and states as municipalities fight the ongoing threat of COVID-19 across the United States and bond markets stall.

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Federal Reserve Announces Changes to Main Street Lending Program

May 1, 2020

On April 30, the Federal Reserve Board announced updates to the Main Street Lending Program, after receiving more than 2,200 comments from individuals, businesses, and nonprofits on the initial terms of the program announced on April 9. Major changes include creating a third facility that accepts riskier borrowers, lowering the minimum loan size, lowering the interest rate, and expanding the pool of eligible borrowers.

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FHFA Relaxes Standards for GSE Mortgage Servicers

April 29, 2020

On April 21, the Federal Housing Finance Agency (FHFA) announced that it was changing standards for mortgage servicers in an effort to reduce burdens brought on by drastic increases in mortgage nonpayment. Quickly following, on April 22, the FHFA announced that Fannie Mae and Freddie Mac would purchase some mortgages in forbearance due to COVID-19.

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US Begins Airline and Aviation Interventions

April 23, 2020

On April 20, the U.S. Treasury Department announced that it had finalized agreements with six major airlines—Allegiant Air, American Airlines, Delta Air Lines, Southwest Airlines, Spirit Airlines, and United Airlines—for $20.5 billion in assistance under the Payroll Support Program (PSP) established by the CARES Act. It said five other airlines plan to participate, which would bring participation to 95% of U.S. air carrier capacity.

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Federal Reserve Announces $2.3 trillion Lending Package

April 10, 2020

The Federal Reserve announced on April 9 a series of programs totaling $2.3 trillion with significant equity participation from the Treasury, including unprecedented direct financing to businesses. The programs include new facilities and expansions of existing programs. By including both riskier securities and issuers, they signal the Fed's willingness to take risks it did not take during the Global Financial Crisis.

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