In late May the Federal Reserve finally announced details of its next highly appreciated emergency lending facility, the Main Street Lending Program (MSLP). The goal of the MSLP is tohelp small and medium-sized businesses that were financiallysound before the Coronavirus pandemic maintain their operations and payroll until conditions stabilize. Eligible businesses with up to 15,000 employees or less than $5 billion in annual revenue in 2019 can apply for a loan between $500,000 and $25 million, albeit with some strings attached, including employee compensation and stock repurchase restrictions.
Unfortunately, consumer finance companies, including vehicle finance companies, credit card issuers, and traditional installment lenders are not currently eligible to borrow from the MSLP, or from the popular Paycheck Protection Program. Just like other businesses on main streets in town and cities across America, the consumer finance industry needs access to federal relief programs to help pay their employees, rent, mortgage interest, or utilities during this public health crisis. To date, it is unclear why the Treasury Department and Federal Reserve have chosen to disqualify the consumer finance industry from assisting nurses, teachers, stay-at-home parents, childcare workers and others at a time of so much personal economic uncertainty.
During a recent Senate Banking Committee hearing on the implementation of the Federal Reserve’s emergency lending facilities, both Senators and business groups stressed the need to tweak and expand the $600 billion MSLP to attract more businesses that could potentially stay afloat and keep employees on payroll. Senator Mark Warner (D-VA), who has been a proponent of expanding loan eligibility requirements for the MSLP, has also emphasized that Treasury should be more willing to lose money on the MSLP to help sustain the economy during this public health crisis.
AFSA will continue to urge our partners on Capitol Hill, the Small Business Administration, and the Federal Reserve, to designate state-licensed and regulated finance companies as eligible businesses to receive federal assistance as Congress intended in the bipartisan-passed CARES Act.
Expanding Lending Facility Will Expand Consumer Opportunity
Jun 05, 2020
In late May the Federal Reserve finally announced details of its next highly appreciated emergency lending facility, the Main Street Lending Program (MSLP). The goal of the MSLP is tohelp small and medium-sized businesses that were financiallysound… Read the rest
Featured Business Partner: Allied Solutions/Securian Financial Group
Jun 04, 2020
The featured Business Partner for June is Allied Solutions/Securian Financial Group. We asked them a few questions about their business and what they're seeing in the economy. Learn more at alliedsolutions.net.
What is the most… Read the rest
AFSA Provides Guidance to CFPB Taskforce
Jun 04, 2020
Earlier this year the Consumer Financial Protection Bureau (CFPB) convened a taskforce on federal consumer financial law. Its purpose: bringing together external experts to examine ways to harmonize and modernize federal consumer financial… Read the rest
WEBINAR | Auto Lending Economic Outlook & Digital Strategies for Risk Mitigation Behind the Deal
Jun 04, 2020
Cox Automotive Chief Economist Jonathan Smoke returns on June 18th at 2:00 p.m. ET to keep lenders apprised of market conditions and financial predictions – particularly with off-lease inventory expected to surge and used retail … Read the rest
AFSA SGA June Whitepaper is Posted
Jun 03, 2020
The June State Government Affairs white paper is an update of our evergreen white paper examining federal regulation of financial institutions. Consumer advocates often characterize certain financial products as "unregulated”… Read the rest
Join AFSA’s AdvantEDGE Affinity Program
Jun 03, 2020
As the American economy begins to slowly reopen, the American Financial Services Association is pleased to announce another way to help members manage their business and defray some of the day-to-day costs of supporting the communities … Read the rest
WEBINAR TODAY | Minimizing Legal Exposure Upon Return to the Workplace
Jun 02, 2020
This discussion will differ from the many materials you are, no doubt, receiving in recent weeks. Rather than giving you a list of best practices or general considerations, we will provide a detailed legal framework that lawyers and human … Read the rest
LISTEN | AFSA: Locked in During Lockdown on the Extra Credit Podcast
Jun 01, 2020
In this episode of the AFSA Extra Credit Podcast we talk with Danielle Fagre Arlowe, the head of AFSA's State Government Affairs team, about what AFSA's been doing on the state front to advocate for members and the variety … Read the rest
Legal Considerations for Return to Work Webinar
May 28, 2020
This discussion will differ from the many materials you are, no doubt, receiving in recent weeks. Rather than giving you a list of best practices or general considerations, we will provide a detailed legal framework that lawyers and human … Read the rest
AFSA Asks Senate to Help Consumers
May 28, 2020
The American Financial Services Association (AFSA) yesterday sent a letter to Senate Majority Leader Mitch McConnell (R-KY) and Minority Leader Chuck Schumer (D-NY) asking that the Senate explore several measures that would help consumers… Read the rest