A Watchdog Asks Why the Trump Administration Removed a Key Requirement for Pandemic Loans

Stefani Reynolds/CNP/Zuma

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A congressional oversight panel wants to know why the Trump administration and the Federal Reserve are no longer requiring businesses seeking coronavirus relief loans to attest that the pandemic was the source of their financial woes.

The CARES Act, passed in early April, created the Main Street Lending Program, which was designed to make it easier for small- and medium-sized businesses that lost money because of the public health emergency to acquire loans. But on April 30, the Treasury Department and the Fed revised the program’s term sheets to remove a requirement that companies attest that they need the financing “due to the exigent circumstances presented by the coronavirus disease.”

The Congressional Oversight Commission, the watchdog group created to oversee the Fed’s and the Treasury’s management of CARES Act funds, asked in a report Monday why the clause was removed. “Without this requirement,” the authors added, “how will the agencies ensure they are providing liquidity ‘to eligible businesses, [s]tates, and municipalities related to losses incurred as a result of coronavirus’?” The bipartisan commission, which consists of Rep. French Hill (R-Ark.), Rep. Donna Shalala (D-Fla.), Sen. Pat Toomey (R-Penn.), and former Elizabeth Warren staffer Bharat Ramamurti, is vowing to find out.

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THE BIG PICTURE

You expect the big picture, and it's our job at Mother Jones to give it to you. And right now, so many of the troubles we face are the making not of a virus, but of the quest for profit, political or economic (and not just from the man in the White House who could have offered leadership and comfort but instead gave us bleach).

In "News Is Just Like Waste Management," we unpack what the coronavirus crisis has meant for journalism, including Mother Jones’, and how we can rise to the challenge. If you're able to, this is a critical moment to support our nonprofit journalism with a donation: We've scoured our budget and made the cuts we can without impairing our mission, and we hope to raise $400,000 from our community of online readers to help keep our big reporting projects going because this extraordinary pandemic-plus-election year is no time to pull back.

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