Federal Reserve Establishes Municipal Liquidity Facility
As part of the $2.3 trillion loan program announced on April 9, 2020, the Federal Reserve established the Municipal Liquidity Facility (“MLF”) pursuant to the Federal Reserve’s emergency lending authority under section 13(3) of the Federal Reserve Act. The MLF will offer up to $500 billion in lending to U.S. states and the District of Columbia, U.S. cities with a population exceeding one million residents, and U.S. counties with a population exceeding two million residents. States, cities, and municipalities will be able to issue new notes directly to the MLF. These funds will help offset the delay in state and local tax receipts caused by the deferral of the tax filing deadline and any short term losses in tax revenues resulting from reduced business and consumer activity due to the coronavirus disease 2019 pandemic.