WASHINGTON (Reuters) – The top Democrat in the U.S. House of Representatives called on the Federal Reserve on Tuesday to allow nonprofit groups including colleges and universities access to a lending facility intended to help businesses cope with the coronavirus outbreak.
House Speaker Nancy Pelosi said larger institutions, including those that serve minorities, are being excluded from the Fed’s $600 billion Main Street Lending Facility. The same groups also cannot participate in the Treasury Department’s $349 billion Paycheck Protection Program to help businesses with fewer than 500 workers.
“Unfortunately, the administration and the Fed, as of today, are excluding nonprofits,” Pelosi said in a message to Democratic lawmakers. “This is a significant blow in particular to entities that are also ineligible for the Paycheck Protection Program.”
Pelosi and Senate Democratic leader Chuck Schumer are in a political standoff over the Paycheck Protection Program with Senate Republicans who want to add another $250 billion in financing for small businesses. Democrats favor the aid but want a larger package that would also insure PPP financing for minority-owned and rural businesses and provide additional help to hospitals, the poor and state and local governments.
Pelosi’s message underscored Democratic opposition to the Senate Republican proposal, saying it would “only perpetuate the flaws that are threatening the survival of the most vulnerable small businesses and would do nothing to aid desperate hospitals and state and local governments.”
Meanwhile, the California Democrat also urged lawmakers to raise the Fed’s lending approach issue in their districts and to encourage nonprofits to contact the U.S. central bank. “We must move quickly, because submissions will be accepted only until this upcoming Thursday,” she said.
The Main Street Lending Facility, made possible by the $2.3 trillion coronavirus legislation that Congress passed last month, is one of the Fed’s linchpin programs for dealing with the economic impact of the coronavirus outbreak, which has shut down much of the country. The program is aimed at helping companies with fewer than 10,000 workers or less than $2.5 billion in revenue.
Pelosi is due to hold a conference call with her Democratic caucus on Thursday at 2 p.m. EDT (1800 GMT).
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