MBA, Others Request Federal COVID-19 Continuity and Recovery Fund
The CARES Act signed into law last week was necessary to address COVID-19 pandemic challenges, but additional liquidity is needed to avoid an unprecedented and systemic economic crisis, the Mortgage Bankers Association and other groups told policymakers.
In a letter to President Donald Trump, Treasury Secretary Steven Mnuchin, Senate Majority Leader Mitch McConnell, R-Ky., Senate Democratic Leader Charles Schumer, D-N.Y., House Speaker Nancy Pelosi, D-Calif., and House Republican Leader Kevin McCarthy, R-Calif., MBA and 35 other organizations representing retailers to realtors to theater owners requested Congress advance a proposal to assist with economic recovery and mitigate a larger financial crisis resulting from widespread economic activity disruption.
“Government mandates that have been put in place to stem the spread of COVID-19 such as widespread quarantines, travel restrictions and social-distancing measures are driving an unprecedented level of disruption to business activity and continuity,” the letter said. “This disruption is rippling across the U.S. economy, severely constraining consumer and business spending.”
The organizations told policymakers employers of all sizes and their employees are facing “insurmountable” strain due to COVID-19 and without broad-based and expeditious federal action, long-term damage to the financial markets, rampant unemployment and irreparable harm to communities are almost certain.
“Although the loan programs instituted by the CARES Act provide a down payment on economic support for Main Street businesses, additional liquidity will be required for impaired industries and businesses to avoid an unprecedented systemic economic crisis,” the letter said.
The groups noted they represent a broad coalition of the business community and are working together to provide a short-term and immediate path for employee retention and business viability through rapid liquidity delivery. “We believe this framework can assist all impacted businesses regardless of size, industry or location,” the letter said.
The proposed COVID-19 Business and Employee Continuity and Recovery Fund would allow a special federal administrator to enter into contracts with interested businesses to distribute federal funds and liquidity to affected businesses and their employees. “The requested relief would be designed to help businesses retain and rehire employees, maintain worker benefits and meet operating expense obligations,” the letter said, noting strong anti-abuse provisions including audits and Special Inspector General oversight would be included.
“We urge the Administration and Congress to continue to think broadly and holistically to address the catastrophic emergency that has caused these unprecedented economic challenges,” the groups said. “We believe the establishment of the Recovery Fund is necessary to supplement the efforts to expand lending in the CARES Act. Businesses across the United States are looking to you to restore confidence in our economy, support employee retention and position businesses to survive this crisis and rebound once it ends. We stand ready to work with the Administration and Congress in implementation.”