Jerome Powell

Worried about a lack of demand and that some of their customers are ineligible, community banks are still on the fence about participating in the effort to back loans for businesses recovering from the pandemic crisis.

At a congressional hearing, Fed Chairman Jerome Powell discussed steps to get the flow of coins to financial institutions back to pre-pandemic levels, as well as ways to ease other industry burdens.

The Fed chairman updated senators about the agency's new credit facility for midsize firms struggling in the pandemic. He also left open the possibility of additional stress tests to gauge the industry’s coronavirus response.

Fed Chair Jerome Powell will address lawmakers twice this week while the Supreme Court could come out with a long-awaited ruling on the Consumer Financial Protection Bureau.

The central bank is only now nearing the launch of the credit facilities after the effort was announced in April. But Chairman Jerome Powell said loans have been available through other means.

The central bank will increase support for credit issued through the Main Street Lending Program while providing midsize firms with more flexibility on the amounts they receive.

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.

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

Members of the Banking Committee pressed the Treasury secretary and Fed chief to ensure CARES Act funds are deployed as Congress intended. They also debated the need for more stimulus to ease the economic effects of the coronavirus.

The head of the U.S. central bank said its emergency credit programs were not designed to prop businesses up over the long term.

The central bank will disclose information on a monthly basis about its Term Asset-Backed Securities Loan Facility and its Paycheck Protection Program Liquidity Facility.

The agency is being methodical in its rollout of the Main Street Lending Program in hopes of avoiding missteps that followed the launch of other coronavirus relief efforts. But observers say delaying aid brings its own risks.

The central bank’s programs announced since mid-April in response to the coronavirus outbreak match if not exceed the actions it took during the 2007-9 financial crisis.

Some megabanks are pushing New York lawmakers to add a legal safe harbor if lenders use the new Secured Overnight Financing Rate. Smaller banks would have little choice but to take that option.

The Main Street Lending Program, announced on April 9 as an option to help U.S. businesses weather the coronavirus outbreak, will be available to a wider array of companies than previously planned.

The Federal Reserve chairman pledged to use every tool at the central bank's disposal to limit the economic fallout from the coronavirus and urged lawmakers to take further action.

The central bank and other agencies have come under pressure to be transparent about their use of funds authorized by the recent pandemic rescue law.

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.

The head of the Senate panel overseeing Federal Reserve and Treasury Department efforts to boost the U.S. economy urged the agencies to remember their disclosure requirements.

The letter written by Rep. Maxine Waters, D-Calif., and Sen. Sherrod Brown, D-Ohio, was seen as a boost to Wall Street lobbying efforts seeking to quell the fallout of the coronavirus crisis on the mortgage market.