Title: Main Street Lending Improvement Act of 2020
Policy area: Finance and Financial Sector

Summary:
Main Street Lending Improvement Act of 2020
This bill revises the Main Street Lending Program, a Federal Reserve lending facility established to provide COVID-19 (i.e., coronavirus disease 2019) related business loans. Specifically, the bill (1) allows financial institutions to collect interest on the entirety of certain smaller loans if a participation in the loan is sold to the special purpose vehicle established under the program, and (2) requires the Federal Reserve Bank of Boston to establish a help line to address lender-specific questions.
The special purpose vehicle must purchase 99% of the interest in a loan participation originated by certain financial institutions. Additionally, certain financial institutions must receive automatic preapproval for loans under the program.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 4655 Introduced in Senate (IS)]

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116th CONGRESS
  2d Session
                                S. 4655

To make improvements to the Main Street Lending Program, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 22, 2020

  Mr. Perdue introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
To make improvements to the Main Street Lending Program, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Main Street Lending Improvement Act 
of 2020''.

SEC. 2. MAIN STREET LENDING PROGRAM.

    (a) Sense of Congress.--It is the sense of Congress that--
            (1) the Main Street Lending Program should serve as a ``bad 
        bank'' to hold nonperforming and illiquid loans during the 
        economic shock triggered by the COVID-19 pandemic;
            (2) the Department of the Treasury and the Board of 
        Governors of the Federal Reserve System have served as strong 
        guardians of taxpayer monies and strived above and beyond their 
        mandates in launching the Main Street Lending Program;
            (3) as of the date of enactment of this Act, the Main 
        Street Lending Program has not operated as envisioned by 
        Congress;
            (4) with bankruptcies hitting record highs not seen since 
        the 2009 financial crisis, the Main Street Lending Program 
        should serve as a vital lifeline to stave off a catastrophic 
        wave of bankruptcies by small- and medium-sized enterprises;
            (5) earnings before interest, taxes, depreciation, and 
        amortization is not a generally accepted accounting principal 
        measurement and its calculations can vary from one company to 
        the next;
            (6) the prominence of earnings before interest, taxes, 
        depreciation, and amortization only emerged in the advent of 
        the leveraged buyout in the 1980s; and
            (7) there are many companies outside of the earnings before 
        interest, taxes, depreciation, and amortization leverage test 
        that can still present themselves as growing concerns in a non-
        COVID economy.
    (b) Alternative Asset Test.--It is the sense of Congress that, in 
carrying out the Main Street Lending Program, the Department of the 
Treasury and the Board of Governors of the Federal Reserve System 
should consider--
            (1) using earnings or cash flow metrics as a metric for 
        eligibility in the facilities of that Program; and
            (2) providing alternative tests for borrowers because 
        earnings before interest, taxes, depreciation, and 
        amortization--
                    (A) is not a one size fits all equation;
                    (B) ignores the cost of assets and working capital; 
                and
                    (C) fails to appropriately measure the ability of 
                an entity to generate cash as opposed to an operating 
                cash flow test.
    (c) Boston Fed Helpline.--The Federal Reserve Bank of Boston shall, 
with respect to the operation of the Main Street Lending Program--
            (1) create a lender helpline to address lender-specific 
        questions; and
            (2) consider additional guidance and information with the 
        focus aimed at addressing the concerns of small and mid-size 
        financial institutions.
    (d) Exemptions for Loans Under $5,000,000.--With respect to any 
loan, the amount of which is less than $5,000,000, a financial 
institution may collect interest on the entirety of the loan if a 
participation in the loan is sold to the special purpose vehicle under 
the Main Street Lending Program.
    (e) Streamline Main Street Lender Participation Program.--With 
respect to the Main Street Lending Program, for financial institutions 
with less than $25,000,000,000 in assets--
            (1) the Department of the Treasury and the Board of 
        Governors of the Federal Reserve System will strive to reduce 
        borrower reporting burdens by limiting any reporting 
        requirement to at most once a quarter and reduce the amount of 
        data points they are required to submit;
            (2) the Federal Reserve Bank of Boston shall verify that 
        the financial institution meets both the asset test and is a 
        well capitalized institution under the Federal Deposit 
        Insurance Act (12 U.S.C. 1811 et seq.) and the Federal Credit 
        Union Act (12 U.S.C. 1751 et seq.);
            (3) the special purpose vehicle under the Program shall 
        purchase 99 percent of the interest in a loan participation 
        originated by the financial institution under the Program;
            (4) mortgage debt shall not be included in the earnings 
        before interest, taxes, depreciation, and amortization leverage 
        test;
            (5) the financial institution shall collect interest on the 
        entirety of a loan, a participation in which is sold under the 
        Program; and
            (6) the Federal Reserve Bank of Boston shall provide--
                    (A) automatic preapproval for institutions under 
                the Program for loans up to $5,000,000; and
                    (B) that--
                            (i) the special purpose vehicle under the 
                        Program shall wire 99 percent of the 
                        participation amount to preapproved lenders 
                        upon the lender's uploading of a borrower's 
                        name, W-9, amount, type of Main Street Loan, 
                        and certification of lender's receipt of signed 
                        loan documents;
                            (ii) additional borrower and loan 
                        information and uploading of closing documents 
                        in the special purpose vehicle portal may occur 
                        within 5 business days of funding; and
                            (iii) a borrower may only receive a loan 
                        originated pursuant to the terms of this 
                        subsection once.
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