Hannah Lang

The central bank expanded the reach of the program as pressure mounts on the government to support localities struggling economically because of the coronavirus pandemic.

The central bank said customers will be able to make more transfers and withdrawals "at a time when financial events associated with the coronavirus pandemic have made such access more urgent."

The Federal Housing Administration has provided struggling homeowners with payment flexibility and explored other measures. At the same time, the agency is mindful of protecting itself against downside risks.

The policy move will allow small institutions participating in the Paycheck Protection Program to pledge business loans as collateral to obtain advances.

The FHFA will allow Fannie Mae and Freddie Mac, for a limited time, to purchase loans for which the borrower has sought to postpone payments because of the economic effects of the coronavirus.

Efforts to calm lenders’ fears about coronavirus-related forbearance may not offset tightening standards, and the FHA is less likely to boost volume than it was during the financial crisis.

Large institutions say their strong capital positions allow them to reward investors, and the Fed agrees. But critics say this is the time to be preparing for a sharp downturn and continue helping those hurt by the coronavirus pandemic.

Tenants have threatened to suspend payments during the pandemic to pressure officials into providing rental assistance, but the effects on multifamily loans would compound concerns about servicers' liquidity and, ultimately, lenders' performance.

The agency's top supervisory official said the Comprehensive Capital Analysis and Review will proceed on schedule, and signaled that the Fed will look at how institutions are responding to fallout from the coronavirus.

Midsize businesses and state and local governments are among the beneficiaries of the central bank's latest $2 trillion effort to mitigate the economic damage caused by the coronavirus pandemic.