Federal Reserve Board Announces Expanded Scope and Eligibility for the Main Street Lending Program
The Federal Reserve Board unveiled plans yesterday to expand the scope and eligibility for the Main Street Lending Program after feedback from over 2,000 individuals, businesses and nonprofits. The program, established under Section 13(3) of the Federal Reserve Act, was provided $75 billion under the Coronavirus Aid, Relief, and Economic Security (CARES) Act to help credit flow to small and medium-sized businesses.
The Board will create a third loan option, with increased risk sharing by lenders for borrowers with greater leverage. This new loan option allows lenders to retain a 15 percent share on loans that, when added to existing debt, do not exceed six times a borrower's income. The creation of this new option, dubbed "expanded" loans, joins the new and priority loan options.
In addition, the Board outlined plans to lower the minimum loan size for certain loans from $1 million to $500,000 and expand the pool of businesses eligible to borrow to businesses with up to 15,000 employees, or those with up to $5 billion in annual revenue. The chart below summarizes the three loan options.
Click here to view the graph.
As public officials at all levels of government continue to escalate their responses to the pandemic, the latest actions and developments may be found below. Akin Gump will continue to provide regular policy developments related to COVID-19.
Pelosi Names Members to House Select Committee on the Coronavirus Crisis
On Wednesday, House Speaker Nancy Pelosi (D-CA) appointed Members to serve on the bipartisan House Select Committee on the Coronavirus Crisis established by the CARES Act. The Committee, which aims to provide oversight of the federal COVID-19 response and ensure efficient use of taxpayer dollars, will be chaired by House Majority Whip Jim Clyburn (D-SC). Other Democratic members of the Committee include Reps. Maxine Waters (D-CA), Carolyn Maloney (D-NY), Nydia Velázquez (D-NY), Bill Foster (D-IL), Jamie Raskin (D-MD) and Andy Kim (D-NJ). House Minority Leader Kevin McCarthy (R-CA) has not yet announced which Republican Members will be appointed to the Committee.
CMS Issues Second Round of Regulatory Waivers and Rule Changes
The Centers for Medicare & Medicaid Services (CMS) yesterday issued a second round of regulatory waivers and rule changes to deliver expanded care to seniors and provide greater flexibility during the COVID-19 pandemic. Medicare will no longer require an order from the treating physician or other practitioner for beneficiaries to get COVID-19 tests and certain laboratory tests required as part of a COVID-19 diagnosis. CMS is also announcing that Medicare and Medicaid are covering certain antibody tests, and Medicare and Medicaid will cover laboratory processing of certain FDA-authorized tests that beneficiaries self-collect at home. Additional information on new waivers and flexibilities for health care providers is available here.
Wicker, Thune, Moran, Blackburn Announce Plans to Introduce Data Privacy Bill
Yesterday, Senate Commerce Committee Chairman Roger Wicker (R-MS), Majority Whip John Thune (R-SD), and Senators Jerry Moran (R-KS) and Marsha Blackburn (R-TN) announced plans to introduce the COVID-19 Consumer Data Protection Act of 2020. The upcoming narrowly-tailored bill is aimed at giving Americans more control over, and insight into, how their personal health, proximity and geolocation data is used during the current health crisis. The Act requires companies to obtain express consent in order to collect, process or transfer this type of data for the purposes of tracking the spread of COVID-19. It also allows individuals to opt out of the collection and use of this data, and directs companies to be transparent to the public by describing their data collection practices in relation to the pandemic. Further, companies must de-identify all personally identifiable information (PII) when it is no longer being used for the health emergency. The Federal Trade Commission and state attorneys general are given enforcement authority, and state and local laws and regulations are preempted under the Act.
Labor Department Issues Guidance on Pandemic Unemployment Assistance
The Department of Labor (DOL) issued guidance on Monday that addresses questions about work search and job refusal when an individual receives Pandemic Unemployment Assistance (PUA). This guidance clarifies that individuals who do not go to work solely due to general concerns about exposure to COVID-19, or those who refuse work in order to file for unemployment benefits, would not qualify for PUA, unless the individual is unable to work as a direct result of COVID-19. Regarding requirements for individuals to search for work while collecting PUA benefits, applicable state unemployment compensation (UC) laws related to continued claims are applicable to PUA claims. However, states may use emergency flexibility to temporarily modify work search requirements to respond to the spread of COVID-19.
More States Take First Steps to Reopen; Others Announce Extensions of Emergency Measures
A number of states have announced initials steps to reopen their economies in response to the three-phase guidelines issued by the Administration on April 16 in addition to the following recent state actions, a complete list of state status may be found at this link:
- Arizona: Governor Doug Ducey announced that the state's stay-at-home order would be extended to May 15, with some modifications for businesses. Non-essential retailers will be allowed to open with restrictions on May 8 and restaurants could possibly open on May 12.
- Iowa: Governor Kim Reynolds announced that effective May 1 in 77 counties, the following businesses may choose to reopen but must comply with restrictions. Restaurants, fitness centers, libraries and retail stores may reopen at 50 percent of normal operating capacity. Enclosed malls may also reopen at 50 percent capacity, but play areas and common seating areas including food court dining areas must remain closed. Restaurants in food courts may reopen on a carry-out basis. Race tracks, other than a track conducting horse or dog races, may reopen and resume operations as long as it does not permit any spectators to attend events in person. All theaters, for live performances or motion pictures must remain closed. Social community, recreational, leisure and sporting activities will continue to be limited to 10 people. The restrictions on religious gatherings have been lifted, but they must adhere to social distancing guidelines.
- New Jersey: Governor Phil Murphy announced that effective at 6:00 a.m. on May 2, all state parks and forests shall open to the public for the recreational activities listed in which social distancing can be readily achieved. Golf courses shall be allowed to reopen to the public and to members associated with private golf clubs on the condition that such businesses adopt the policies listed in the order.
- West Virginia: Governor Jim Justice announced that phase 1 of reopenings would begin the week of April 30, allowing hospitals to resume elective procedures and outpatient health care operations may resume provided that the facilities have a plan in place to safely phase-in procedures based on CDC guidelines. If phase 1 is sees no spike in new cases, then specific businesses will begin to operate with physical distancing measures in effect including small businesses with fewer than 10 employees, businesses providing professional services and outdoor dining areas of restaurants. Additional business may reopen after 3 weeks based on the recommendations of state medical experts and available data.
- Washington: Governor Jay Inslee announced on April 29 that construction activities and elective surgeries may resume in the state beginning May 1. Gov. Inslee also stated the stay-at-home order which was set to expire on May 4 will most likely be extended, however no further details were provided.
President Trump Delivers Remarks on Protecting America's Seniors
On Thursday, April 30, President Trump delivered remarks on protecting America's seniors. Highlights of his remarks included:
- President Trump stated that he would sign a proclamation declaring the month of May "Older Americans Month."
- President Trump announced that the Federal Emergency Management Agency (FEMA) will send a seven-day supply of personal protective equipment (PPE) to all 15,400 Medicaid and Medicare certified nursing homes. FEMA will coordinate the shipments of surgical masks, gloves, eye protection and gowns set to begin the first week of May and be completed in mid-June.
- The Centers for Medicare & Medicaid Services (CMS) is providing states with $81 million from the CARES Act to support state and local efforts related to nursing homes.
- This week, the Administration will be finalizing a new rule requiring information about COVID-19 cases in nursing homes to be reported directly to the Centers for Disease Control and Prevention (CDC) and testing data to be posted online. The rule will also require nursing homes to report cases to residents and their family members.
- President Trump also announced the creation of the Coronavirus Commission for Safety and Quality in Nursing Homes, which will be overseen by CMS and comprised of leading industry experts, doctors and scientists, resident and patient advocates, family members, infection and prevention control specialists and state and local authorities. The commission will convene in May and issue recommendations to protect America's seniors.
- CMS Administrator Seema Verma announced that CMS will soon make an important announcement to lower the price of insulin for seniors.
- President Trump highlighted progress made on vaccines and therapeutics, noting that Gilead's Remdesivir is showing encouraging preliminary results.
- Department of Health and Human Services (HHS) Secretary Alex Azar indicated that HHS has dispersed more than $1 million in grants to aging and disability networks.
- Phase 3: Federal Reserve Board Announces it is Expanding the Scope and Eligibility for the Main Street Lending Program
- Phase 3: Treasury Interim Final Rule on Paycheck Protection Program Disbursements
- Phase 3: Treasury Interim Final Rule on Corporate Groups and Non-Bank and Non-Insured Depository Institution Lenders
- Phase 3: Joint Statement by Secretary Steven T. Mnuchin and Administrator Jovita Carranza on the Review Procedure for Paycheck Protection Program Loans
- Phase 3: Paycheck Protection Program Loans Frequently Asked Questions
- House: Pelosi Names Select Members to Bipartisan House Select Committee on the Coronavirus Crisis
- Senate: Wicker, Thune, Moran, Blackburn Announce Plans to Introduce Data Privacy Bill
- CMS: Trump Administration Issues Second Round of Sweeping Changes to Support U.S. Healthcare System During COVID-19 Pandemic
- FCC: Chairman Pai Extends Keep Americans Connected Pledge Through End of June Due to Ongoing COVID-19 Pandemic
- States: Updated Contact Information for FEMA Regional Offices
- States: The Wall Street Journal Guide to State Lockdowns
- States: National Governors Association (NGA) COVID-19 Resources
- States: Stateside Associates: New Executive, Legislative And Regulatory Actions Issued By State/Local Governments
Akin Gump Alerts and Other Resources
Corporate Transactions: Launch of Coronavirus Large Business Interruption Loan Scheme for UK Businesses
U.S. Department of Health and Human Services (HHS):
- Tweet at 1:24 AM, April 30, 2020 (Link)
- "NEWS: HHS, through the Health Resources and Services Administration, has awarded $20 million to increase telehealth access and infrastructure for providers and families to help prevent and respond to COVID19. Read more here."
- Tweet at 2:01 PM, April 29, 2020 (Link)
- "Federal Open Market Committee statement: (Press Release)"
- Tweet at 10:02 AM, April 30, 2020 (Link)
U.S. Department of the Treasury:
- Tweet at 8:30 AM, April 30, 2020 (Link)
- "Readout from a Treasury spokesperson on Secretary Mnuchin's call with G7 Finance Ministers. (Press Release)"
U.S. Small Business Administration (SBA) Administrator Jovita Carranza:
- Tweet at 7:33 PM, April 28, 2020 (Link)
- "To further ensure Paycheck Protection Program loans are limited to eligible borrowers, SBA has decided, in consultation with the U.S. Treasury, that it will review all loans in excess of $2 million, in addition to other loans as appropriate."
Article originally published on 1 May 2020
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