Reports

In response to the COVID-19 pandemic, the Board established the MSLP—composed of five different lending facilities—to facilitate lending to small and medium-sized for-profit and nonprofit organizations. Through the MSLP, the Federal Reserve Bank of Boston purchased 1,830 loans amounting to approximately $17.5 billion from lenders; the majority of these loans were purchased during the last 2 months of the program. We plan to assess the design and operating effectiveness of the System’s processes for loan purchases.

In response to the COVID-19 pandemic, the Board established the MSLP—composed of five different lending facilities—to facilitate lending to small and medium-sized for-profit and nonprofit organizations. Through the MSLP, the Federal Reserve Bank of Boston is responsible for administering the loans, including assessing overall credit risk and identifying substandard loans. We plan to assess the MSLP’s processes for loan administration, including the design and operating effectiveness of internal controls.

In response to the economic effects of the coronavirus pandemic, the Federal Reserve recently announced that it would create new lending facilities to provide loans to employers, certain businesses, and communities across the country to support the U.S. economy. Specifically, the following programs have been created or are in development: the Main Street Lending Program, the Paycheck Protection Program Liquidity Facility, the Municipal Liquidity Facility, the Primary Market Corporate Credit Facility, and the Secondary Market Corporate Credit Facility. We are initiating an active monitoring effort of these programs to gain an understanding of operational, governance, reputational, and financial matters associated with them. Through this monitoring effort, we will refine our focus on the programs and identify areas for future audits or evaluations. Some of the topics we are considering include the design, operation, governance, and oversight of the lending programs; data collection and reporting associated with the programs; and the effect of the programs on the Board’s supervision and regulation activities.

Treasury reports that the Hardest Hit Fund is in a wind down status. SIGTARP will evaluate the status of the program, and Treasury’s planning of the program’s wind down. This will include, for example, TARP dollars remaining to be spent by state agencies, as well as current and estimated future program activity. It will also review Treasury’s direction and guidance to state agencies for wind down planning, and the state agencies’ response.