UPDATE: Federal Reserve’s Paycheck Protection Program Lending Facility and Federal Home Loan Bank Advances Accepting Paycheck Protection Program Loans as Collateral
On April 16, 2020, the Federal Reserve announced that the Paycheck Protection Program Lending Facility (the “PPPLF”) commenced operations. Under the PPPLF, which was initially announced on April 9, 2020, Federal Reserve Banks will lend to depository institutions that originate Paycheck Protection Program (“PPP”) loans on a non-recourse basis, taking the PPP loans as collateral. On April 23, 2020, the Federal Reserve announced that it is working to expand access to the PPPLF for additional SBA-qualified lenders—including non-depository institution lenders, such as some Community Development Financial Institutions—as soon as possible.