Cheat sheet: What's at stake for banks, customers in stimulus battle
WASHINGTON — The stakes are high for the financial services industry as lawmakers battle over the details of a new stimulus package to provide economic relief for businesses and consumers affected by the coronavirus outbreak.
Although Senate Democrats blocked a vote on a package sponsored by Majority Leader Mitch McConnell, R-Ky., a whole host of provisions benefiting banks, credit union and other financial firms appears still to be on the table in McConnell’s plan and other proposals being floated on Capitol Hill.
McConnell’s package included several industry-backed measures intended to make it easier for banks to lend and protect client funds. His bill would authorize an expansion of Federal Reserve liquidity programs, delay a controversial new accounting standard for loan losses, give the Federal Deposit Insurance Corp. the authority to guarantee business transaction accounts, provide regulatory relief for troubled debt restructurings, and ease a capital requirement for community banks.
Democrats, who decried Senate Republicans’ package as putting corporations over workers and families, have offered up a number of their own proposals to help consumers in the midst of the pandemic. These proposals include a temporary cap on interest rates for consumer loans, a moratorium on negative credit reporting, and a temporary ban on overdraft fees.
A spokesperson for Senate Minority Leader Chuck Schumer, D-NY, said he was “working late into the night” with Treasury Secretary Steven Mnuchin and that they had a “productive meeting.”
“Key disagreements remain regarding Treasury’s broad discretion over industry-specific relief, the need for more aid to individuals, and the lack of funding for state and local governments,” said Ed Mills, a policy analyst at Raymond James, in a note Sunday. “While these are substantive differences, we do not change our belief a deal will be struck.”
Here is a cheat sheet of the proposals that have been floated by Republicans and Democrats as Congress is working out how to provide relief to banks and consumers during the national emergency.