Tuesday Topic: Main Street "Dead on Arrival"

There's an old adage that says "when all you have is a hammer, the whole world looks like a nail."  I think that describes the MSLF as the primary need (unlike the PPP) is not an immediate jolt of credit to the system.  Granted, long-term low interest loans should be an enticement, but i think businesses want certainty and security more than credit.  We have only had a few inquiries, but given our experience with PPP, I don't think we would participate.  PPP shows that the government can/does change the rules (even after the loan is out the door).

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Jon Drake
Senior EVP & CFO
Peoples Bank
Lubbock TX
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Original Message:
Sent: 06-22-2020 09:47
From: Barb Rehm
Subject: Tuesday Topic: Main Street "Dead on Arrival"

The Fed's new Main Street Lending facility is "dead on arrival" one borrower told The Washington Post. He blamed banks that are either not participating, only making loans to existing customers, or don't even know about the new program, which offers loans of at least $250,000 to companies with up to 15,000 employees. "We have limited interest from community banks nationwide," ICBA's Paul Merski told the newspaper. "It's a very challenging and complex program." Two former Fed officials are recommending a slew of changes including lowering the minimum loan size, giving companies more than five years to repay, lowering the interest rates on loans for higher-quality, less-risky companies, and offering banks higher fees as an incentive to make more of these loans. What do you think about the new Main Street program? Will your bank participate? Why or why not? Let us know.

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Barb Rehm
Senior Managing Director
Promontory Interfinancial Network, LLC
Arlington VA
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