Special Alert: Fed offers billions through emergency credit facilities

Federal Issues Special Alerts Federal Reserve Department of Treasury Covid-19 Dodd-Frank

On March 23, the Federal Reserve announced that it is establishing and expanding a number of facilities to provide powerful support for the flow of credit to large U.S. employers and other businesses and families in the midst of the Covid-19 pandemic.

The Fed’s facilities and related actions are rooted in its authority related to financial markets under Section 13(3) of the Federal Reserve Act, but creatively expand the reach of the assistance the Fed may provide relative to the financial-crisis era legislation last addressed by the Dodd-Frank Act, including by using special purpose vehicles (SPVs) backed by the U.S. Treasury to purchase assets, which now include corporate bonds. In the COVID-19 crisis, we see the Fed’s use of Section 13(3) not targeted principally at systemically important financial institutions, but rather at the broader economy, including financial and nonfinancial businesses, large and small. Eligibility under these programs involves factors in Section 13(3) itself, as amended by the Dodd Frank Act, the Fed’s respective term sheets, and the economic stimulus legislation pending in Congress.

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Click here to read the full special alert.

If you have any questions regarding the Fed’s new facilities or other related issues, please contact a Buckley attorney with whom you have worked in the past. You can also visit our Covid-19 News & Resources page for a compendium of issuances by federal and state agencies, as well as GSEs and other sources.