Mnuchin rejects renewal of some Fed emergency loan programs

Washington – Treasury Secretary Steven Mnuchin said Thursday he will not to extend several emergency loan programs set up with the Federal Reserve to support the economy in the midst of the coronavirus pandemic.

The decision drew a terse rebuke from the Fed.

The central bank said it “would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy.”

But in a letter to Fed Chairman Jerome Powell, Mnuchin said that the Fed’s corporate credit, municipal lending and Main Street Lending programs would not be renewed when they expire on Dec. 31.

Under law, the loan facilities required the support of the Treasury Department, which serves as a backstop for the initial losses the programs might incur.

Mnuchin said that he is requesting that the Fed return to Treasury the unused funds appropriated by Congress for operation of the programs.

He said this would allow Congress to re-appropriate $455 billion to other coronavirus programs. Republicans and Democrats have been deadlocked for months on approval of another round of coronavirus support measures.