John Dugan says a successful effort by banks to alleviate the economic damage of the pandemic could boost the industry's reputation.

Members of both parties raised concerns that the requirements for participating in the Municipal Liquidity Facility and Main Street Lending Program are too restrictive to benefit smaller localities and certain midsize firms.

The Federal Reserve set up a liquidity facility to help banks meet demand for emergency small-business loans through the Paycheck Protection Program, but it's gone largely unused.

Chairman Jerome Powell said the Federal Reserve's actions during the coronavirus outbreak have been aimed squarely at helping U.S. workers, not Wall Street or wealthier Americans. He also said Friday that a new lending program geared toward middle-market firms is "days away" from getting up and running.

Even after the Fed eased some limitations in April to promote emergency lending, the bank has had to make some “tough choices” to heed the $1.95 trillion growth ceiling set by regulators in the aftermath of its phony-accounts scandal.

The takeaway from the PPP rollout is that bankers must protect their reputations and limit their risk appetites as they participate in further government-backed rescue programs.

The general structure of this year’s reviews is unchanged despite the pandemic. But a supplemental analysis of banks' response to the downturn could weigh heavily in evaluating 2020 capital distributions and making adjustments to the tests over the long run.

The Federal Reserve Bank of Boston published details on the terms for lenders and borrowers to participate in the facility intended to provide coronavirus relief funds to middle-market firms.

Payouts continue to be relatively generous, but that could change if the Federal Reserve demands banks bolster capital or the economy worsens.

The National Community Reinvestment Coalition, California Reinvestment Coalition and Democracy Forward accuse the agency of “unlawfully gutting” the historic anti-redlining law.