FED announced that it will extend the Paycheck Protection Program Liquidity Facility, or PPPLF, from March 31, 2021 to June 30, 2021. The extension, which was approved by the Secretary of the Treasury, will provide continued support for the flow of credit to small businesses through the Paycheck Protection Program, or PPP. No new extensions of credit will be made under the Facility after June 30, 2021, unless FED and the Department of the Treasury determine to extend the Facility.
PPPLF, which is authorized under section 13(3) of the Federal Reserve Act, is intended to facilitate lending by eligible borrowers to small businesses under the PPP Loans of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The PPPLF extends term credit to financial institutions making PPP loans and accepting the PPP loans as collateral. The other currently active 13(3) facilities—the Commercial Paper Funding Facility, the Money Market Mutual Fund Liquidity Facility, and the Primary Dealer Credit Facility—have not had significant usage since last summer and will expire as scheduled on March 31, 2021.
Keywords: Americas, US, Banking, PPPF, PPP, COVID-19, Paycheck Protection Program, CARES Act, Credit Risk, Collateral, FED
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