Federal Reserve’s Paycheck Protection Program Lending Facility Commences Operations
On April 16, 2020, the Federal Reserve announced that the Paycheck Protection Program Lending Facility (the “PPPLF”) commenced operations. Under the PPPLF, which was initially announced on April 9, 2020, Federal Reserve Banks will lend to depository institutions that originate Paycheck Protection Program (“PPP”) loans on a non-recourse basis, taking the PPP loans as collateral. The Federal Reserve is extending the PPPLF under its emergency lending authority under section 13(3) of the Federal Reserve Act and the facility is intended to facilitate lending to small businesses under the Paycheck Protection Program. The Federal Reserve also released the relevant documentation for banks seeking to access the PPPLF and posted a new set of FAQs.