While many people are returning to the office after their July 4th festivities carrying on as usual, bankers can return knowing that the Federal Reserve Board has extended the Paycheck Protection Program Liquidity Facility until July 30th.
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The Paycheck Protection Program Liquidity Facility, or PPPLF, extends term credit to financial institutions making Paycheck Protection Program (PPP) loans, accepting the PPP loans as collateral. The loans, which require approval from the Small Business Administration (SBA), expired on June 30. The extension of the Federal Reserve’s PPPLF serves as an operational accommodation to allow additional processing time for banks, community development financial institutions and other financial institutions to pledge to the facility PPP loans and obtain funding for the loans.
The liquidity provided by the PPPLF bolsters the effectiveness of the PPP by helping eligible financial institutions fund PPP loans. Established to provide liquidity to banks and the economy at the beginning of the Covid pandemic, the PPPLF was established in April 2020 under the Board’s 13(3) authority.