Linda Jun, a senior policy counsel for Americans for Financial Reform, a consumer advocacy group: “To this day, despite many people asking, they haven’t provided anything about the basis for changing this rule beyond some vague references to new research. It’s hard to see the reversal as anything other than political.”
Note: On the afternoon this letter was sent the Federal Reserve announced it would be providing additional transparency in 13(3) facilities. See our comment linked here for earlier AFR Edcucation Fund communications with the Federal Reserve on this issue. Download a pdf of the letter here: Letter to Federal Reserve Board and Treasury Regarding 13(3)
Absent major changes, the Federal Reserve’s multi-trillion-dollar funding programs will reward corporate insiders and financial speculators, without guaranteeing desperately needed help for those hardest-hit by the coronavirus crisis. The Fed needs to set the right priorities for this credit and impose conditions that ensure the benefits of this extraordinary assistance go to those who need it most.
Critics also noted that while the central bank has to share some basic information about the loans, other details, such as how many employees the company has retained or the compensation for its chief executive, might never be shared publicly. “We should ask for the actual deal documents. Why wouldn’t you make those public?” said Marcus Stanley, policy director at Americans for Financial Reform.
As organizations that represent the interests of American workers, small businesses, and consumers we applaud Representative Jayapal on a bill that finally puts American workers and small businesses ahead of corporations. This is exactly the type of program we need to keep people on payroll and connected to their important health benefits, address our ballooning unemployment, and lay the foundations for economic recovery.
Hundreds of thousands of small businesses shuttered by COVID-19 are at risk of closing for good in the coming weeks without direct subsidies. Very small businesses and those with historically limited access to capital are especially vulnerable. With little or no revenue coming in, entire sectors of the small business economy face extinction. Tens of millions of jobs are at stake – along with health care, sick leave, retirement, and other important benefits.