Board Report: 2024-FMIC-B-018 September 23, 2024
The Paycheck Protection Program Liquidity Facility advanced about $200 billion to lenders to keep credit flowing to small businesses during the COVID-19 pandemic. Just over $3 billion remained outstanding as of March 31, 2024.
The Federal Reserve Bank of Minneapolis, which administers the PPPLF, followed its risk management process for at-risk, unresolved, and potentially fraudulent collateral. However, the PPPPLF did not fully develop and document measures to address nonpayment. Also, we note measures to reduce financial risk if the Board implements a similar liquidity facility in the future.
Our report includes a recommendation to help FRB Minneapolis strengthen its processes related to repayment of outstanding advances.
