Hill Chairs Congressional Oversight Commission's First Public Hearing

Today, Rep. French Hill (AR-02) held the gavel for the Congressional Oversight Commission's first hearing entitled, "Examining the Federal Reserve's Main Street Lending Program". The Commission heard from Eric Rosengren, President of the Federal Reserve Bank of Boston, as well as industry specialists who were familiar with the Main Street Lending Program.

To watch the full hearing, click HERE or on the image below.

Key quotes from Rep. Hill are included below:

Rep. Hill on the importance of today's hearing:

"Leading to its implementation, the [Main Street Lending Program] generated significant interest and engagement. However, in the months since the program has been available, $95 million, of the $600 billion allocated, has been loaned to eligible businesses.

I hope we find answers today that will help explain why it took three months to stand up the program; and what, if anything, needs to be done to alter the program to expand the universe of eligible borrowers."

Rep. Hill on banks reluctance to participate in the Main Street Lending Program.

"Dr. Rosengren, you've talked about how you limited [the program] to depository institutions to get up and running quickly. And yet, there are only 150 banks or so listed on the Fed's website thus far as registered lenders. I cite that because in the emergency environment right at the end of March and April, we were able to stand up the PPP program over in the CARES Act and 5,400 banks swung into action in a patriotic way and in seven days began distributing $520 billion and making 5 million PPP loans.

I am concerned with the reluctance of banks to participate in the program. Arkansas has 86 banks and yet only two banks headquartered in my state that are local banks have agreed to participate."

Rep. Hill on the possibility of moving towards an asset-backed or collateral-backed loan.

"I think the very traditional lending profile that's contained in this term sheet also could be a detriment to companies. Let me give you an example, and this was talked about with Secretary Mnuchin and Chairman Powell at our meeting a few weeks ago, and that is someone who doesn't have good EBITDA in 2019, they certainly don't have it in 2020, but at the end of the year in 2019, they had very good collateral valuation. They had a low loan-to-cost potentially, they had a low loan-to-value potentially, they have room to lend, but they cannot meet the EBITDA standards.

Both Jay Powell and Steve Mnuchin said that they 'were interested in looking at a collateral-dependent or asset-based loan.' Can you tell us what the status of that look is?"

Immediately following the hearing, Rep. Hill joined David Westin on Bloomberg's Balance of Power

Rep. Hill and David Westin discussed the Commission's findings after the hearing and what the next steps are for the Main Street Lending Program to support our nation's workers and businesses.

To watch the full interview, click HERE or on the image below.

Background on the Congressional Oversight Commission and Today's Hearing:
The Congressional Oversight Commission is a five-person panel that was established by the CARES Act. The Commission is focused specifically on the economic stabilization efforts of the Treasury Department and the Federal Reserve. The members of the commission are Senator Pat Toomey (R-Pa.), Congresswoman Donna Shalala (D-Fla.), Congressman French Hill (R-Ark.), and Bharat Ramamurti. The Commission's chairperson has not been appointed yet. The Commission has released three reports, all of which are available for review at the Congressional Oversight Commission's website.

During the hearing, the Commissioners and heard testimony regarding the Main Street Lending Program established by the Treasury Department and Federal Reserve, pursuant to the CARES Act.

During the hearing, the Congressional Oversight Commission heard from two panels.

Panel 1:
Eric Rosengren, President and CEO - Federal Reserve Bank of Boston (bio)
Panel 2:
Lauren Anderson, Senior VP and Associate General Counsel - Bank Policy Institute (bio)
Tom Bohn, CEO - Association for Corporate Growth (bio)
Vince Foster, Executive Chairman - Main Street Capital Corporation (bio)
Gwen Mills, Secretary-Treasurer - UNITE HERE (bio)

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