Fed to reveal borrowers from businesses, government coronavirus lending programs

The Federal Reserve announced Thursday that it will disclose who borrows, how much and at what cost from coronavirus emergency lending facilities it will soon open to businesses and local governments.

The Fed said in a Thursday statement it will reveal at least once every 30 days the companies and localities that borrow from its Main Street Lending Program and Municipal Lending Facility, which offer loans to creditworthy companies and local governments, respectively, facing financial pressure because of the coronavirus. The bank said it will also disclose the amount of each loan and the interest charged on it.

“The Federal Reserve is committed to transparency and accountability by providing the public and Congress detailed information about our actions to support the economy during this difficult time,” Fed Chairman Jerome Powell said in a statement.

The Fed’s disclosures could provide unprecedented insight into the central bank’s unequaled efforts to bolster the economy through the crisis. The $2.2 trillion coronavirus economic relief bill signed by Trump in March allocated $454 billion to backstop two Fed emergency lending facilities: one for local governments and businesses, and the other for businesses that were too large to qualify for a small-business relief program.

The Fed announced on April 9 that it would purchase up to $500 billion in bonds from cities with more than 1 million residents and counties with more than 2 million residents through the Municipal Lending Facility, and offer four-year loans to companies with up to 10,000 employees or less than $2.5 billion in annual revenue through the Main Street Lending Facility.

The Fed’s decision to disclose the details of those loans comes a decade after the central bank faced intense criticism for withholding information about the recipients of its emergency lending to financial firms in response to the 2007-09 crisis.

While the Fed’s disclosures would reveal potentially crucial information about some of its emergency lending efforts, it is unclear if the central bank plans to offer similar details about other lending facilities not explicitly backed up by congressional funding.

The Fed has also opened emergency lending facilities to stabilize the corporate bond and Treasury bond markets, backstop certain investment funds and purchase a wide range of commercial and consumer debt. However, those facilities did not receive specific funding through the $2.2 trillion bill, called the Coronavirus Aid, Relief and Economic Security Act.