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1 1 (May 26, 2020)

handle is hein.crs/govdawt0001 and id is 1 raw text is: Researh Sevice HEROES Act (H.R. 6800): Selected Federal Reserve Provisions May 26, 2020 On May 15, 2020, the House passed the HEROES Act (H.R. 6800), a wide-ranging Coronavirus Disease 2019 (COVID-19) relief bill. This Insight discusses selected provisions related to the Federal Reserve (Fed). Background In response to COVID- 19, the Fed has taken a number of actions to promote economic and financial stability. Traditionally, the Fed acts as lender of last resort, providing solvent banks with short-term liquidity to manage cash flow. In response to the unprecedented economic disruptions posed by the pandemic, the Fed extended that role to nonbank firms and markets to ensure they have continued access to needed funding. In some cases, the Fed provided long-term assistance to borrowers who may not remain solvent if the pandemic persists for an extended time period. To date, the Fed has created nine emergency facilities in response to COVID- 19 under its emergency authority found in Section 13(3) of the Federal Reserve Act. (See CRS Insight IN11327, Federal Reserve: Emergency Lending in Response to COVID-19, by Marc Labonte.) Section 13(3) requires the Fed to minimize the risk of losses, so riskier Fed facilities have been backstopped by funding provided to the Fed by the CARES Act (P.L. 116-136). (See CRS Report R46329, Treasury and Federal Reserve Financial Assistance in Title IVof the CARES Act (PL. 116-136), coordinated by Andrew P. Scott.) The pandemic has imposed large losses on many borrowers, creditors, businesses, nonprofits, states, and local governments, and Congress is debating whether the policy steps taken to date are sufficient. The HEROES Act would expand the government's assistance, in part, by providing the Fed with new authority and mandates in an effort to further expand its lender-of-last-resort role to additional entities. Congressional Research Service https://crsreports.congress.gov IN11404 GRS }NStGHT Prepard for Members and Cornm ittees o4 Corq ess ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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