Federal Reserve expands lending program for small businesses
30 October 2020
The Federal Reserve said on Friday it would again lower the minimum loan size for its pandemic-era small business program.
Details: Businesses and nonprofits will be able to borrow a minimum of $100,000 from the facility, down from $250,000 — a move that might attract smaller businesses that don't need as hefty of a loan. Since the program launched earlier this year, the minimum loan size has been reduced twice.
- The Fed also said banks can collect higher fees on these loans, which would encourage banks to lend.
Why it matters: The Main Street Lending Program has received heavy criticism, including from members of Congress who said it doesn't go far enough to help mom-and-pop businesses.
- Demand has been weak. The program has only doled out 400 loans worth $3.7 billion — a sliver of the $600 billion the facility has the capacity to lend.
The big picture: The change comes as small businesses that have been ravaged by the pandemic might need another lifeline, as higher case counts threaten renewed economic lockdowns.
- The Fed says the move will "better target support to smaller businesses that employ millions of workers and are facing continued revenue shortfalls due to the pandemic," according to the release.
Yes, but: Fed chairman Jerome Powell has noted that piling on debt might not help small businesses.
- Rather, forgivable loans — like those offered through the Paycheck Protection Program — would be more helpful, but the Fed can't issue those, Powell says.
- It's unclear when (or if) another round of PPP is coming. Congress is still deadlocked over another stimulus package.
- Powell told Congress last month that there was "very little demand" in the facility for small business loans below $1 million.
What's next: The Fed releases a policy decision next week, followed by a news conference on Thursday.
Transcripts show George Floyd told police "I can't breathe" over 20 times
Section2Newly released transcripts of bodycam footage from the Minneapolis Police Department show that George Floyd told officers he could not breathe more than 20 times in the moments leading up to his death.
Why it matters: Floyd's killing sparked a national wave of Black Lives Matter protests and an ongoing reckoning over systemic racism in the United States. The transcripts "offer one the most thorough and dramatic accounts" before Floyd's death, The New York Times writes.
The state of play: The transcripts were released as former officer Thomas Lane seeks to have the charges that he aided in Floyd's death thrown out in court, per the Times. He is one of four officers who have been charged.
- The filings also include a 60-page transcript of an interview with Lane. He said he "felt maybe that something was going on" when asked if he believed that Floyd was having a medical emergency at the time.
What the transcripts say:
- Floyd told the officers he was claustrophobic as they tried to get him into the squad car.
- The transcripts also show Floyd saying, "Momma, I love you. Tell my kids I love them. I'm dead."
- Former officer Derek Chauvin, who had his knee on Floyd's neck for over eight minutes, told Floyd, "Then stop talking, stop yelling, it takes a heck of a lot of oxygen to talk."
Read the transcripts via DocumentCloud.