April 17, 2020 - Washington - Senator Dianne Feinstein (D-Calif.) called on the Treasury Department and Federal Reserve to make nonprofits eligible for the Main Street Lending Program, a $600 billion Federal Reserve program backed by coronavirus relief funds to support lending to small and midsize businesses.

“U.S. nonprofits are suffering substantial harm from the coronavirus, just as for-profit businesses are,” Senator Feinstein wrote. “I have heard from numerous California nonprofits that are facing major financial difficulties and are contemplating large numbers of layoffs and even their survival.”

Senator Feinstein continued: “Nonprofits such as these are not only important to the U.S. economy, they provide the services and anchor our communities. They will be a necessary part of an effective post-crisis recovery.”

Full text of the letter follows:

April 15, 2020

The Honorable Steven Mnuchin
Secretary of the Treasury
1500 Pennsylvania Ave., NW
Washington, DC 20220

The Honorable Jerome H. Powell
Chairman, Board of Governors of the Federal Reserve System
20th Street and Constitution Ave., NW
Washington, DC 20551

Dear Secretary Mnuchin and Chairman Powell,

I write to urge the Treasury Department and the Federal Reserve to ensure that nonprofit organizations are eligible for loans under the Main Street Lending Program.

U.S. nonprofits are suffering substantial harm from the coronavirus, just as for-profit businesses are. I have heard from numerous California nonprofits that are facing major financial difficulties and are contemplating large numbers of layoffs and even their survival. Critical services such as youth, meal delivery, and social service programs are experiencing unprecedented demand in a time where state and local tax revenues have plummeted. Arts companies in the San Francisco area alone expect to lose $100 million in the next six months. Zoos and aquariums must continue operations to protect animals despite having no incoming revenue. Nonprofits such as these are not only important to the U.S. economy, they provide the services and anchor our communities. They will be a necessary part of an effective post-crisis recovery.

The CARES Act provides in Section 4003(c)(3)(D)(i) that “the Secretary [of the Treasury] shall endeavor to seek the implementation of a program or facility … that provides financing to banks and other lenders that make direct loans to eligible businesses including, to the extent practicable, nonprofit organizations, with between 500 and 10,000 employees.” However, when the Federal Reserve announced its Main Street Lending Program on April 9, 2020, the term sheets for the program’s two lending facilities made no mention of nonprofits.

I ask the Treasury Department and the Federal Reserve to honor the intent of Congress in the CARES Act by ensuring that nonprofits are eligible for the Main Street Lending Program.

Sincerely,

Dianne Feinstein
United States Senator
Source: Senator Dianne Feinstein