The Federal Reserve, which runs the program with cash from the Treasury Department, said in a statement that it is unable to comment on specific transactions. “This money was meant to help Main Street businesses, not casinos owned by families with alleged mafia connections,” said Kyle Herrig, president of left-of-center watchdog group Accountable.US. Less than a 10th of a percent of the cash available through the fund has been lent, while businesses throughout the country could not qualify under the program’s relative narrow guidelines or are too beaten down to consider taking on more debt. Some critics of the Trump administration’s response to the coronavirus, meanwhile, cast the loan as another case of rescue money being channeled away from those who need it most. “If you see a $50 million loan of your money going to an insider or a family member of an insider, it certainly raises some concerns,” said Perry, who formerly tried cases for a federal financial regulatory agency. The loan may not have been possible but for a decision by the Federal Reserve and the Treasury Department to exempt the Main Street program from longstanding rules barring banks from making taxpayer-backed loans to businesses owned by their directors.īut it may still trigger the federal restrictions on insider lending that cover all activity by regulated banks, known as “Regulation O,” said Braden Perry, a lawyer who specializes in banking compliance.
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