Stimulus bill grants Fed direct lending funds with few strings attached
“We are giving Mnuchin the uncontrolled power to break the rules for any reason or even for no reason at all,” he said.
House Financial Services ranking member Patrick T. McHenry, RN.C., who advocated such a provision in the upcoming stimulus bill, said the focus was on providing the Treasury and the Fed enough flexibility to respond to rapidly changing economic conditions.
“We don’t know what the needs will be next week, let alone two months from now,” he said. “So we want to make sure that the treasury has sufficient capacity to deal with the problems that arise. “
“My main goal is to make sure that we don’t have a complete economic collapse,” he added. “This is my one and only goal right now. People can have ambitions for the future – and that’s great – but we have to face the crisis now, and it’s my number one priority. .
The bill would direct the secretary of the treasury to “endeavor to seek the implementation of a program or facility” that would provide direct loans to businesses and nonprofits with between 500 and 10,000. employees. The interest rates on these loans would be set at an annual rate of 2% and borrowers would not need to pay principal or interest for the first six months.