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COVID-19 Update | Monday, April 27

April 27, 2020

Congress

  • Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Chuck Schumer (D-NY), along with House Financial Services Committee Chairwoman Maxine Waters (D-CA), House Small Business Committee Chairwoman Nydia Velázquez (D-NY), Senate Small Business Committee Ranking Member Ben Cardin (D-MD) and Senate Banking Ranking Member Sherrod Brown (D-OH) wrote a letter to Department of Treasury (Treasury) Secretary Steve Mnuchin and Small Business Administration (SBA) Administrator Jovita Carranza to set aside at least $10 billion in Paycheck Protection Program (PPP) funds for minority banks and other community lenders as the program is set to begin providing loans again Monday. The full letter is attached.
    • The lawmakers also criticized disbursement of advances on Economic Injury Disaster Loans (EIDL) to date, claiming that the $10,000 advances authorized under the CARES Act have not been provided within the three-day period outlined in the legislation.
    • The SBA also plans to cap the amount of loans that lenders can originate at $60 billion in an effort to limit participation of the biggest lenders. This cap will not apply to lenders who have $50 billion or less in assets.
    • Banks that have a large number of pending applications will be able to submit them in one bulk filing.
  • Speaker Pelosi expressed frustration with Democrats’ ability to conduct regular business functions, like holding hearings and oversight, during the COVID-19 pandemic this past weekend. She also shared her belief that Governors’ need for federal funding will lead to more funding for states and local governments.
  • House Minority Leader Kevin McCarthy (R-CA) issued a COVID-19 relief video explanation this morning. The whole video can be found here.
  • Senate Environment and Public Works Committee Chairman John Barrasso (R-WY) over the weekend shared his plan to combine the highway funding legislation passed by his committee last summer with the draft water infrastructure legislation released last week once the Senate returns to Washington, DC.
  • Congress has delivered $175 billion to hospitals and healthcare providers thus far, but the process continues to confuse the hospitals and healthcare providers themselves. Specifically, the industry is fearing uneven assistance for hospitals and other providers serving patients on Medicaid.
  • Representative Jackie Speier (D-CA) introduced a bill on Friday which would establish requirements for cruise lines to receive Federal funds and Federal assistance. The bill has four cosponsors and has been referred to the Transportation and Infrastructure and Ways and Means Committees.

Administration

  • Over the weekend, Treasury Secretary Mnuchin discussed that additional relief to state and local governments will ultimately hinge on Congressional agreement, but that the aid needs to be discussed on a bipartisan basis.
  • Reports indicate that the President plans to reduce the number of White House Coronavirus Task Force briefings. However, one is expected this evening.
  • During the President’s signing of the most recent COVID-19 relief package on Friday, he suggested that the Federal Government could help boost airlines by purchasing “four or five years’ worth” of heavily discounted tickets. However, reports indicate that there is no evidence at this time that the US is considering this.
    • The comments come after Hong Kong’s airport authority announced earlier this month that it would buy 500,000 airline tickets to inject cash into the industry.
  • Treasury indicated that it provided an additional $9.5 billion in initial payments to eight major airlines and 29 smaller carriers, bringing the total to $12.3 billion in aid to 93 companies so far. Details on who received the payments, and how much they received, have not been released.
  • Amid concerns that the formula used to determine relief payments for airports was skewed, the Federal Aviation Administration (FAA) announced it would initially cap grants that airports can receive at four years of their operating expenses. Any airports that were allocated more than that under the formula would have to justify their need for the additional funds in a separate process. Senate appropriators are keenly interested in the allocations process and have raised the matter with the FAA. As previously shared, the FAA laid out its implementation of the formula in this presentation.
  • While there were indications that the White House was considering replacing Secretary of Health and Human Services (HHS) Alex Azar amid ongoing frustrations from within the Administration, the President last night discredited the rumors.
  • The Internal Revenue Service (IRS) has enhanced their “Get My Payment” online application to help taxpayers receive their Economic Impact Payments. More information can be found here.
  • The SBA and Treasury announced details of the resumption of applications for PPP loans beginning today. SBA will resume accepting applications at 10:30 AM Eastern Time. More information can be found here.
  • The Federal Emergency Management Agency (FEMA) is working to assess the quality of Chinese-made medical equipment the US is buying, despite the fact that that it lacks China-based inspectors. FEMA does not have enough inspectors in China to inspect medical equipment bound for the United States. This shortage of inspectors is increasing the time it takes for some of these supplies to reach the United States.
    • Reports indicate that FEMA is working to establish more quality controls for other suppliers “closer to the source of the production outputs to ensure that production matches US safety of use guidelines leveraging third-party quality-control contractors to validate production or overseas sources of inventory to speed inspection.”
  • Federal Register Notices
    • The Agricultural Marketing Service (AMS) has announced $3 billion in funds for the purchase and distribution of fresh produce and dairy and meat products for Americans facing challenges due to the COVID-19 national emergency. The full notice can be found here.
    • The Department of Homeland Security is delaying the enforcement of the REAL ID regulations until October 1st, 2021. The full notice can be found here.
    • The National Credit Union Administration posted an interim final rule that allows covered PPP loans to receive a zero percent risk weight and not be counted in the credit union’s total assets. The rule is effective immediately and there is no comment period. The full rule can be found here.
    • The President’s full executive order to suspend immigration has been published to the Federal Register and can be found here.

Other News

  • Presidential candidate Joe Biden has called for substantial investments in infrastructure, including light rail, clean drinking water, and electric vehicle chargers.
  • Former New Jersey Governor Chris Christie penned an op-ed calling for infrastructure to be included in the next relief package. The op-ed can be found here.
  • A new Transit Center analysis indicates that the $25 billion for transit agencies included in the CARES Act will only sustain operations for 5-8 months in the 10 US regions with the highest transit ridership. The analysis also indicates that for smaller transit markets, the money will last 13-21 months. The full analysis can be found here.
  • The United States-Mexico-Canada Agreement (USMCA) is set to go into effect on July 1, but all three entities still need to finish drafting uniform regulations for automakers to follow. The Administration is expected to offer up the regulations a month before the deal enters into force.
    • Additionally, the three entities still need to name the panelists that will handle disputes under USMCA.
  • Ruth’s Chris, Shake Shack, Potbelly Sandwich Shop, and other large companies continue to face backlash for utilizing certain programs and funding included in the CARES Act. The three companies mentioned here have stated their intent to return those monies.
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