Present your oral testimony. Secretary mnuchin thank you very much. Mr. Barr. Let me express my condolences for your loss. Of the committee, i am pleased to join you today to discuss how the Treasury Department and the Federal Reserve are working together to provide liquidity to the credit households,iness, as well as state and municipal governments. We remain committed to making sure every american gets back to possible. Ickly as americas economy continues to recover from the challenges posed by the covid19 pandemic. The jobs report for the month of may best we exceeded expectations with a record gain of 2. 5 million jobs after experts had predicted nearly 8 million lost. Ae Unemployment Rate is still high but we are seeing additional signs the conditions will improve significantly in the third and fourth quarters of this year. Is bluechip report forecasting our gdp will grow by 17 annualized in the Third Quarter and by 9 in the fourth quarter. The u. S. Chamber of commerce reported this month 79 of Small Businesses are at least partially open, and half of the remaining businesses are opening soon. By 18 ,ales rose in may more than double the expectation. Investors in business have historically high cash positions, the highest since 1992, indicating private capital is ready to return as communities reopened. We are in a strong position to recover because the administration, working with congress on a bipartisan basis to pass legislation and provide liquidity to markets in record time. In particular, the ppp is keeping tens of millions of employees connect to their jobs. Areomic impact payments also helping millions of families and workers through these challenging months. We are monitoring Economic Conditions closely. Certain industries such as construction are recovering quickly while others such as retail and travel are facing longer impacts and may require additional relief. We look forward to continued conversations with you to address these critical economic issues. Treasury has been hard at work implementing cares act programs. Ppp we have approved over 4. 8 million Small Business loans for 519 billion. Economic impact payments, we distributed nearly 169 million payments in record time. Programs to support aviation and other eligible business we have approved and dispersed over 27 billion dollars to over 500 airlines and other aviation business, preserving hundreds of thousands of jobs. Process ofhe documenting loans to business and Critical National security for approximately 25 billion. The Coronavirus Relief fund, we have distributed 150 billion across states and local governments, nearly half of all in additional money to tribal governments. The cares act also granted treasury the authority to provide 454 billion to support Federal Reserve lending facilities under section 13. 3. Since march 17 using funds available, i have approved a number of Federal Reserve programs. The commercial paper program, primary dealer program, the talf, the secondary facility, main street facility, municipal facility, and the ppp lending facility. We have committed approximately 200 billion to support these. This has promoted muchneeded access to liquidity. Billionover 250 remaining to create or expand programs as needed. While we are beginning to have conversations about supplemental relief legislation, we look forward to working with congress on a bipartisan basis in july on any other further legislation that will be necessary. Treasury has only been entrusted with a tremendous amount of funding to inject into the economy. We are closely monitoring these results and seeing if conditions improve. We would anticipate any additional relief would be targeted to Certain Industries that have been especially hardhit by the pandemic with a focus on jobs and putting americans back to work or have lost their jobs through no fault of their own. The Treasury Department is implementing the cares act with transparency and accountability. We are providing information to the government wide reporting on usa spending and updates to congress. We are also cooperating with the congressional Oversight Committee, gao, and others. Pleased the Federal Reserve has announced plans to boost loan information on its website regarding its facilities. Chair powell and i have had very productive initial meetings with members of the Oversight Committee, and we look forward to continuing to work with them. Thank you very much. Chairwoman waters thank you. Chair powell, you are now recognized for five minutes to present your oral testimony. Chairwoman waters, Ranking Member mchenry, thank you for the opportunity to specify today to discuss the extraordinary challenges our nation is facing and the steps we are taking to address them. We meet as the pandemic continues to cause tremendous hardship, taking lives and livelihood, both at home and around the world. This is a Global OutlookHealth Crisis and we remain grateful to our Healthcare Professionals for providing the most important response, to the essential workers who meet our daily needs. These people put themselves at risk day after day in service to the country. The virusin march, and a forceful measures taken control into stacia decline in Economic Activity and a surge in job losses. As the economy reopened, incoming data is beginning to reflect the resumption of Economic Activity. Many businesses are opening doors, hiring is picking up, and spending is increasing. The economy has entered an important new phase and has done so sooner than expected. While this bounceback is welcome, it also presents new challenges, notably the need to keep the virus in check. While recent data offers positive signs, we are keeping in mind more than 20 million americans have lost their jobs and the pain has not been evenly spread. Beenising joblessness has especially severe for lowwage workers, women, africanamericans, and hispanics. This reversal of economic fortune has caused a level of pain that is hard to capture in words. Forward for the economy remains extraordinarily uncertain and will remain in large part on our success in containing the virus. A full recovery is unlikely to occur until people are confident it is safe to engage in a broad range of activities. The path forward will also the pen on policy action to support the recovery for as long as needed. The Federal Reserve is strongly committed to using our tools to do whatever we can for as long as it takes to provide some relief and stability to ensure the recovery will be as strong as possible and to limit lasting damage to the economy. And for lowering the federal funds rate to essentially zero, our action soap all fall into four categories. Stabilizing markets, money market and liquidity funding measures, direct efforts to support the flow of credit in the economy, and targeted regulatory measures to support those efforts. Facilitiescreated 11 to support liquidity, funding, and the flow of credit to households and businesses and state and local governments pay without access to credit, families could be forced to cut back on the subsidies or lose their homes. Businesses could be forced to downsize or foreclose, further worsening the downturn. Lending facilities have all been undertaken with the approval of the treasury secretary and many are supported with the cares act. Their status and ethics are discussed in my rinse statement. To use will continue these powers forcefully, proactively, and aggressively until we are confident the nation is on the road to recovery. When the time comes come after the crisis has passed, we will put these emergency tools back in the toolbox. I would stress these are lending powers, not spending powers. We design ourte facilities to work for broad ranges of businesses and municipalities. We do not target firms or industries. Elected officials have the power to tax and spend and make decisions on where to direct such targeted relief. The cares act and other legislation provides direct help to people and businesses and communities. This support is making a critical difference in the just helping families and businesses in a critical need but also limiting the longlasting damage to our economy. Public faith in our operations depends on transparency. Committed to that transparency, particularly in supplying our emergency powers. I look forward to questions. Chairwoman waters thank you. I now recognize myself for five minutes for questions. As i mentioned in my opening, the pandemic is threatening, and so, too, must our response. Two weeks ago, chair powell, when i asked about the need for more congressional action to protect our communities, you said, there are Something Like 25 Million People who are still dislodged from their job in full or in part due to the pandemic. I would think it would be a concern if congress were to pull back from the support that is providing to quickly. Unfortunately, tomorrow, this is exactly what will happen if the senate does not pass the heroes act. Program stopsppp taking new applications. Ppp should be extended immediately so that the billion dollars in funding can support Small Businesses. Also happening tomorrow, millions of families will be unable to pay their rent and mortgages. In june, one third of renters cannot pay their rent. Four point 2 million homeowners are currently in for very they cannot pay their mortgages, and evictions have already started in many states where moratoriums have expired. While the moratorium should be extended, it is not conscious about to simply delay and affection and foreclosure crisis. Congress and the Administration Must provide support to struggling low income families to cover their rent and utility payments. Powell, millions of families are at risk of being stripped of their home. Do you think congress should provide Financial Assistance to ensure people stay in their homes . Chair powell thank you, madam chairwoman. I try to keep my fiscal comments at a very high level. That comment that you referred to was referring to the Unemployment Insurance that expires at the end of july. For the specifics of what you need to be doing, i think we have a treasury secretary here. The treasury to secretary on fiscal matters here. Chairwoman waters ok, so you put it up on mr. Mnuchin. [laughter] while you have made changes to broaden the liquidity facility, many jurisdictions like the territories are still locked out. When we last spoke, you mention it was difficult not perhaps there would be a way that guam would be eligible. Did you find a way to look at that and determine if something could happen . Secretary mnuchin we are taking a serious look at that. The territories themselves are not investment rated, were not before the pandemic set in. That is the men on standard for access to the musical facility. Businesses in the territory would be eligible for the main street. Some of the facilities that guam has our Investment Grade rating but below the minimum. We are actually renewing our credit standards in the municipal Credit Facility at the moment to determine if there is a way to adjust the facility in a way that would make eligible some credit issuers without violating the letter of section 13. 3. Secretary waters mnuchin, with critical unemployment support expiring next month and today marking the last day that treasury and sba claims that new ppp loans can be approved, does the Administration Support extending these programs, as proposed in the heroes act . We do supporthin additional legislation and look forward to the house and the senate on that. I have already had conversations with the sba committee in the senate about repurposing that 135 billion. I think that should be done. Looking forward to working with the house and senate so that we can pass legislation by the end of july. Chairwoman waters thank you very much. Maybe not. From northan carolina, mr. Mchenry, is recognized for five minutes. Thank you for your testimony. Secretary mnuchin, i think there is wide agreement that your engagement in the ppp program made things largely better, right . The treasury expertise, making thissba could deliver in seminal program of the cares act. It has proven out because you have 4. 5 million Small Businesses that have benefited from it. The average loan size is quite modest, but the effect is pretty wide scale. What would you say regarding the additional funds that are ppp . Sed for what should our focus be as policymakers of repurposing that 134 billion . How can we best do that . Programs . Loan how do you see the spitting into the actions of main street and the other facilities that you have set up . Secretary mnuchin i appreciate your comments. At the time that we passed the last cares act, the economy was in very different shape, and we needed to get money into the economy quickly. Programs that took three months were not the focus. I think there appears to be bipartisan support in the senate to repurpose the 130 billion for ppp, extending it to businesses that are most hardhit, that have a requirement that their revenues have dropped significantly, things like restaurants, hotels, and others, where it is critical to get back to work. That seems like a reasonable step in the right direction. Powell, the reputation you have garnered this year in particular is that your actions have been predictable, in that you signal what you are going to do and follow through on it. Transparent, in that you lay out the metrics for action, and there or follow the metrics. Incredible. , at announcement, you said you would support corporate bonds, and by saying that you would support corporate bonds, the market acted as if the fed already have the program up and running. Once you were up and running, people asked why you follow through on that program. I think that is important to that transparency, that guidance, communication has been effective in this opening stage in setting up these responses. So along those lines, the fed took what i would call strong medicine in terms of action on the stress test, to restrict buybacks, restraints on these large Financial Institutions i would call that quite strong medicine. What we want to understand are the metrics that the fed is going to use in order to make these judgments and assessments in this next phase, over the next couple of months for these large financials. Chair powell i think you have to start with the two major affects here. What is that the Banking System has been strong, a source of strength. The banks have been taking on a wave of deposits, engaging in forbearance, making loans. There is a source of strength in this situation, unlike the last crisis when they were a weakness. It is also a fact that it is highly uncertain. To preserve that strength, we have stopped all shery purposes, stopped increases in dividends, so we are preserving the level of capital in the system. To address the uncertainty, looking forward, we did run these three sensitivity analyses. To assessreally good the overall strength of the system, in the space of these downside cases. We found the majority of firms were still adequately capitalized in all of those scenarios. Notwithstanding that, we said for the first time in the history of these tests, then we were going to ask the banks to resubmit their capital plans, distribute scenarios, and look at the results again as we learn more about the path of the crisis. In terms of the precise metrics we will be looking at that, we will provide more clarity going forward. Based on that uncertainty, you are asserting as a regulator , that you will actively review this to ensure we dont have a financial crisis as a result of this Health Crisis . Chair powell we are learning so much every quarter. The path of the economy is highly uncertain. In our system, dividends are declared every quarter. We have stopped already the overwhelming distribution of that. We think that is the right place to be. Thank you for your leadership and effectiveness. Thank you as well, secretary mnuchin, for your leadership and effectiveness. I yield back. Chairwoman waters thank you. I recognized the gentleman from new york, ms. Maloney. Thank you and welcome. Secretary mnuchin, i would like to ask you about a very tumbling troubling oversight issue. I am the chair of the Oversight Committee and i take these matters seriously, and i hope that you do, too. In the cares act, we created the Pandemic Response accountability committee, independent inspectors generals charged with overseeing all of the money , and in the cares act identify waste, fraud, and abuse. Last month, the general counsels office in treasury issued a legal opinion that questions pracs authority to oversee trillions of dollars of cares act spending. This legalluntly, analysis is so bad that it borders on bad faith. The opinion claims that no evidence that congress did not to haveor the prac oversight, authority over anything in the first half of the cares act, including the ppp program, and any of the feds lending facilities or the 150 billion in funding for states and local governments. So i would say, secretary mnuchin, that this interpretation is wrong, that it is just plain wrong. Senator gary peters and i proposed an author this section of the law, and i was heavily involved in negotiating those provisions in the cares act. I am telling you that congress toent was for the prac oversee all of the spending in the cares act, not just have, but all of it. That was our intent, that is what the bill said explicitly. The interpretation from your general counsels office is already causing problems because it is hindering the prac s ability to monitor how states are spending their money. Mnuchin, i would say that we have worked productively together and in good faith negotiations on the Beneficial Ownership bill, other bills before congress, so i hope that you will take my concerns about this erroneous legal opinion seriously. This is what id like to ask today. I would like you to commit to interpreting this section of the cares act as congress intended, with the pracs oversight authorities apply to all cares act spending. This is a small step but a very important one that you can take to show that you are serious about the oversight of the trillions of dollars in the cares act. Secretary mnuchin thank you, and i appreciate your comments, and i assure you we are very much committed to working with the Oversight Committees on transparency. As it relates to this, i can assure you it was not bad faith. Im happy to have our office followup with you. It has to do with a technical reporting. Cipients as it relates to the issue of monitoring state spending, i am more than happy to put the prac in touch with our Inspector General who has primary oversight and make sure whatever information specifically the prac wants on the states, we accommodate. I would say that is not what im asking. Im asking, will you commit to interpreting the pracs oversight authorities as to apply to all of the cares act spending . That was the intent, i wrote the section of the law, that is what congress wanted. There is no problem with the interpretation. It is clear and explicit. Will you admit to allowing the oversight that was in the bill . Secretary mnuchin i appreciate that you wrote that portion. I would also say that i had direct discussions with people in the senate about various different oversight. That is why we agreed to a new Oversight Committee with full transparency, agreed to provide information that was not required under 13. 3. We have full transparency. Im happy to follow up with you on the specific concerns as to which different entities should receive what information. It is important there is not bureaucratic overlap, but again, let me emphasize, if the prac needs certain information, we will do what we can to accommodate it. I am there he disappointed with that answer and i guess we will have to pursue a legislative solution. It is very clear the intent of wouldss is that the prac have oversight of all of the cares spending. I yield back. Chairwoman waters thank you. ,he gentlewoman from missouri ms. Wagner, is recognized for five minutes. Thank you, madam chairwoman. Thank you for joining us today, secretary mnuchin, chair powell. I want to commend you both at the outset for your leadership during this unprecedented time, both the United States department of treasury, and the Federal Reserve system have shown their ability to both effectively and rapidly respond to the economic crisis brought on by covid19, by providing trillions of dollars to stabilize our economy. Chairman powell, secretary mnuchin, lender registration for the main Street Lending program went live on june 15, i believe. How many of you know lenders have registered so far . Do you know the average size of the lenders participating . If not, when do you think this information might be made available . In the range of nd it may be a higher. That number is a few days old. It takes a few days, so i cannot tell you exactly. That is how many will come out of the pipeline. The size of lenders . Chair powell the size ranges from a large to the very small. The very small are particularly well represented but it does range across the spectrum. You will be providing this information to us on a regular basis . Chair powell we are working with the borrowers to figure out the right way to figure out how to connect lenders and borrowers. We are working with the lenders to put something together that will make that happen in the most efficient way. Thank you, german powell. In your effort to create broadbased programs, do you think the main street facility will need to expand any further to meet the needs of our businesses . Seen,powell as you have the secretary and i have worked closely on this. Willing ton very learn from experience, learn from what we are hearing from different parts of the economy. The ppprtainly did with program, so i would hope that we approach it the same way. Chair powell we are in the relatively early stages of opening up a nonprofit main street facility. We will be watching as the regular main street fully comes online, continuing to look at whether there are ways that we can improve it. Chairman powell, last weeks release of the Federal Reserves outcome, and more importantly, the results of the covid19 Sensitivity Analysis underscores the resilience of the Banking System. While we can all agree that the level of uncertainty in the economy continues to be high given the progression of the covid19 pandemic, i believe the Federal Reserve subjected filers to extraordinary assumptions regarding unemployment and gdp and traction. Despite these assumptions, the 33 largest banks remained above minimum Tier One Capital requirements. Given that, im wondering why the Federal Reserve has indicated friends will need to resubmit firms will to resubmit capital plans and why there will be an off cycle supervisory stress test . The Federal Reserve already included firms capital planning, management, processes, approaches, and assumptions that passed in the toughest test. Could you explain that, please . Chair powell what the 33 institutions passed was the regular, severe adverse and errors that we wrote before the pandemic. That is what controlled in the outcome. The pandemic arrives right in the middle of a stress test period. Quickly revised, without going through our usual vetting process, three alternative sensitivity analyses, one of which was a vshaped recovery, ushape, and then a serious doubledip. We did not use them to evaluate individual institutions but to evaluate a broad range of institutions. I am running out of time. Why lock up Additional Capital now . This has the potential to be a Chilling Effect on the economy exactly when banks need to provide credit and liquidity to households and businesses to facilitate economic recovery and support financial intermediation in the Financial Markets. Chair powell we did not do that. We are not looking to raise capital standards during a crisis. That is not what is going on here. Thank you for the clarification. I yield back. Chairwoman waters thank you. The gentlewoman from new york is now recognized. Chair. K you, madam mr. Secretary, at any time, have you been blocked by President Trump or anyone else at the white house from providing information requested by congress or an oversight body . Secretary mnuchin no. Have you ever prevented anyone within the Treasury Department or the administration more broadly from providing access to information requested by congress or an oversight body . If you arenuchin referring to an oversight body not that im aware of, no. Ok. , tonight, thee ppp program expires. You are advocating for extending that authorization. You are telling us that you are already discussing this with the senate. But there is a role for the house. Secretary mnuchin of course. I will remind you that nothing will move unless we have those conversations, as chair of the house Small Business committee. I cannot be able, in good sense, to make a determination as to where the programs should go, or reforms thisr program needs, unless we have access to the data. When are you going to provide the data to our committee . Secretary mnuchin i believe we sent by the end of the week. We have reached out to your committee to make sure that we establish no, we got a letter but no date. Secretary mnuchin it is supposed be delivered by the end of the week. I am more than happy to speak with you if you want to set up a time to speak. Sir, we have been contacting your office every week asking you to appear before the Small Business committee with the administrator. Last week. Her she intends to come before the committee. You are saying here that we need to take care of those most in this nextnesses we purpose of this 135 billion that is left. But we need to know if the Program Works as intended by congress. Millionthat four businesses accessed the program. But what about the millions of minority and women owned businesses that were not able to access the program . So you are saying maybe a restaurant needs to get a second loan. I just heard senator marco rubio. Loane should get a second unless we know that most businesses who are struggling get a chance to get a loan. Powell, as chair of the Small Business committee, i am particularly concerned about the state of our nations small pandemics, as the poses an acute risk to their survival. How would the failure of Small Businesses, especially those that are women or minority owned personally affect the communities they serve, particularly those of color . What impact could these failures have on future Market Conditions . Chair powell of course, the effects can be very significant. Small businesses generate most of the jobs and growth in the economy, so that could be important, particularly in minority communities. Chairman powell, earlier this month, the oecd said the pandemic has triggered the most severe recession in a century and warned the Global Economy could contract by 7. 6 this year, should a second outbreak hit. Do you agree with this assessment . A rangewell there is of assessments, but i would say that is within the range. A what impact do you see second outbreak having on the u. S. And the Global Economy . Chair powell i certainly would not forecast that. Just hypothetically, a second governmentsld force and people to withdraw again from Economic Activity. I think the worst part of it would be to undermine public confidence, which is what we ofd, to get back to lots kinds of Economic Activity that involves grounds crowds. Thank you. I yield back. Chairwoman waters thank you. Mr. Lucas. Powell, secretary mnuchin, thank you for attending this hearing. I want to begin by commending german power or finalizing the interaffiliate margin rule. This may be the last time that we discussed this. While the rules may be abstract and difficult to understand, they have an impact on agricultural and oil and Gas Producers who manage risk and plan for the future. Which as we have seen in the past months can be unpredictable. Know,aid, as both of you commercial people finances a wide array of Economic Activity and provides liquidity for companies to meet their operational needs and with the commercial paper market under strain due to covid19 in march, the Federal Reserve establish the commercial market encouraging lenders to land in the market to which ultimately supports businesses and jobs across the country. Chairman powell, could you describe the current indicators of how the commercial paper market response to the creation of the facility, and has there been a discussion to expand the facility to address liquidity issues faced by tier two issuers . Chair powell the commercial paper facility has substantially healed. It really closed there in the beginning of march as markets did, and when we announced the sohest graded borrowers largely but not completely that market has returned to fairly normal function. We are watching it carefully. I would say we are not currently assessing whether to broaden the facility. Should the situation deteriorated, we would have that as an option. Thank you. Secretary mnuchin, there have been reports that china is restricting global agricultural imports due to covid19. How are we working to resolve this with china . Do you anticipate this impacting the terms of the phase one trade agreement, to purchase u. S. Goods and services, particularly the commitment to purchase 40 billion in u. S. Farm products . Secretary mnuchin let me first emphasize we have serious concerns about the lack of transparency from china as it relates to covid. Having said that, we have every expectation they will support and live up to the phase one agreement, and that they are well on their way to those commitments. One last question. Native american tribes have been hit particularly hard by covid19. Tribal employment is often concentrated in arts, recreation, and accommodation industries. How has the Federal Reserve and treasury been looking specifically at the economic challenges faced by tribes . Secretary mnuchin i can answer chair powell i can answer as to how main street is providing. That is where a lot of the activity is. The tribes themselves are not general obligation issuers, so they are not particular candidates for the municipal facility. Thank you. At an chair, with that, i yield back the balance of my time. Chairwoman waters thank you. Secretary, mnuchin. I am a nice guy, so i will not reportsthe that say over 100 million has gone to people who are deceased, but i will urge you to adhere to the agreement that you made with the senate of the Small Business committee to very quickly release the names and data about all ppp borrowers that have borrowed over 150,000. Chairman powell, back on march 12, i sent you a letter urging that you prohibit stock buybacks by banks. You have done so. Thank you very much. Two weeks ago, you went on the record to say, i think it would be a concern if congress were to pull back their support , having just said that there were 25 Million People dislodged from their job. Thank you for that advocacy, and i Hope Congress listens. We need to do more to stimulate this economy under these circumstances. Secretary mnuchin mentioned support that he is providing to local and state governments, but that is all in the form of loans. Almost all state and local governments cannot run a deficit, so with their revenues down by hundreds of billions of dollars, i hope the past the heroes act and actually provide aid to state and local governments. Chairman powell, for the main Street Lending program, that is particularly relevant to commercial real estate, is that if they get a loan from you, they violate the loan covenants they have in their existing mortgage. I look forward to working with you on that. One possible solution is the bill that i submitted and we have had hearings on in this committee, the business borrowers protection act. Certainly, getting a loan on a program that we have authorized because of the covid crisis, should not trigger and make it a preexisting mortgage immediately due and payable. I spent this morning at the white house with a few colleagues getting briefed on russian involvement in afghanistan. It appears to me, secretary mnuchin, but they have been bold , they have killed our soldiers. When they do Something Else that we catch them on, we dont sanction them very much. Debate now is whether they of puttingscene step a bounty on the heads of individual soldiers, or whether they have limited their activity in afghanistan to aiding the taliban but not correlating it to how many dead americans this or that operation created. Fromurse, the response t the administration is to let them into the g8 and help them. That kind of response will lead to more deceased american soldiers. Under the chemical weapons act, which Congress Passed a couple years ago, your department was supposed to sanction russia for their department of the chemical weapons act when they used poison to try to assassinate a russian assistant in britain ent in britain. But you opted for the weakest rules in the act. It prohibits certain loans from americans to the russian government. But it does not apply to ruble transactions, loans to staterun enterprises, and apparently does not apply to purchases in the secondary market. Given the fact that our undersa nctioning of russia has led to at least their aging of the taliban and in the general sense, and according to reports, has led to the specific putting of bounties on our soldiers, could you revisit this existing law and impose these bans on transactions, loan to staterun enterprises, secondary markets . Must be a tough question, you took off your mask. Secretary mnuchin we believe we follow the law and selected amongst a series of items at the time, but im happy to go back. Im happy to go back and look at it again. There were credible reports that they put bounties on our troops. Please look at it again. Secretary mnuchin i want to be clear, for the record. Onm not commenting classified information, nor do i think it is appropriate in this setting to talk of an alleged information in the press. Mr. Posey,waters you are recognized for five minutes. Thank you, madam chair, Ranking Member for holding this meeting today. To review the treasury and Federal ReservePandemic Response. Mr. Secretary, i want to commend your efforts and those of the president s team, both but most especially you, for putting relief and place in these its ordinary times. The stimulus checks and the Paycheck Protection Program have been tremendously successful in bringing muchneeded relief to hardhit american families. It has been huge. The very best there is. Secretary mnuchin thank you. I want to commend chairman powell for his leadership to keep the Financial Markets stable and liquid in the face of the downturn and the general Economic Conditions. We await full implementation of the main Street Lending program. Im looking forward to hearing more about that. First question is, our nations hoteliers have been facing one of the most significant downturns ever in our economy. Revenues have plummeted as much as 80 in the shutdown. Extreme curtailment of travel, as you know. I would like a response from both of you. Im wondering if you have the authority you need under section 13. 3 of the Federal Reserve act, and more broadly the cares act, to address the liquidity and cash flow crisis in the hotel sector . We are not looking for Additional Authority under 13. 3. Our authority is to lend to solvent institutions and programs to broaden that ability. Any company in any sector that meets those tests can borrow at one of our facilities. Secretary mnuchin the only thing i would add to that is that we appreciate certain comments that have been made by this committee and others as it relates to loans that are in securitizations, particularly hotels and other real estate levered beforely hand. It does not lend itself as well to the three team to the 13. 3 facilities. We look forward to that. Some of our businesses, hoteliers are warning of their inability to make payments is affecting their ability to make payments to back securities. I wonder if you could comment on the cmbs market. Secretary mnuchin one of the problems of that market is there are very strict, contractual obligations. That is why one of the things that i think we need to look at in the next cares act is additional funding for these industries that are the hardest hit so they can continue to rehire people so that occupancy increases, that they have employees they can maintain. Thank you. I recently wrote to both of you expressing my concern for businesses that are assetbased. I believe they will face hurdles in assessing main Street Lending facilities because of the nature of their business challenges, their ability to meet lending criteria, based on their ,arnings before interest, tax amortization. R dircraft developer, and organization, falls into this category. I wonder if you could tell me the challenges of providing lending facilities to businesses like that . We havey mnuchin discussed about looking at assetbased financing. That is something we continue to discuss with the Federal Reserve. Chair powell that is where we are. Thank you, that chair. I yield back. Chairwoman waters mr. Clay, you are recognized for five minutes. Thank you, madam chair. I think both witnesses for your participation today. Mr. Secretary, i am somewhat troubled by recent reports that some banks have taken stimulus payments from individuals and , garnishes and negative account balances to offset debts owed to them. I find it troubling that banks would serve as debt collectors at a time when families need the resources the most. When will treasury issued guidelines articulating your expectation that Financial Institutions refrain from taking stimulus away from their customers during a time like this . Let me firstchin say, i agree with you. It would be awfully unfortunate if banks are doing that. We have had inquiries about garnishment. We agree, from a policy standpoint, that there should have been no garnishment. Unfortunately, that is something we have to address in next cares act, if we do additional direct payment. There are certain estate long them are not overwritten in the existing cares act. My understanding is that is a state issue, not a federal issue. About the cruelty of the policy. Secretary mnuchin as i said, i agree with you on the policy. Couldnt you issue a blanket have askednuchin we our legal department, unfortunately we cannot. That is something we want to address in the next cares act. We would agree with you from a policy standpoint. Thank you. Chairman powell, for many nonprofits and Small Businesses, earnings before interest, taxes, depreciation, and amortization is not a widely used metric. Have you considered using other metrics of debt, future growth, or financial help to the main Street Lending programs, nonprofits, and Small Businesses, so they are fully able to participate . Yes, we have, particularly for nonprofits. You dont need to take taxes out of nonprofits. We are looking at a range, and we put this up for comment. We got a lot of thoughtful comments from the Nonprofit Community looking at cash flow and also Financial Resources more broadly. In terms of companies, ebitda is basically just pretax cash flow, a widely use metric, but there are other metrics, as the secretary mentioned, probably the next in line is something along the lines of acidbased. That is something we are looking at with the treasury. Under the mainstream lending program, you reduce the minimum threshold from 1 million to 250 thousand dollars, and then expanding the program to nonprofits with more than 50 employees. However, many Small Businesses may not need 250,000. Mr. Chairman, has the fed considered eliminating the minimum loan threshold altogether . Chair powell we had not considered eliminating it yet. We are just getting rolling with loans, as you know. We can, once we get up and running, look at lowering it again. But you get into a different kind of lending. These are personal loans rather than business loans. Generally guaranteed by the business operator. We can look at that. That is something that we will look at once we get up and running. Concerning that you have that threshold of 250,000 when, say, a Small Business in st. Louis needs 100,000 to survive through this pandemic until they get back on their feet. Any consideration given to accommodate . Can seewell we ourselves possibly lowering the threshold again, but just logistically for us to be making very small loans, would be difficult. Those people may be better dealt with through fiscal policy. I could see us down the road looking at a lower threshold. Thank you both for your responses. Madam chair, i yield back. Chairwoman waters mr. Scott, you are recognized for five minutes. Thank you. Chairman powell, we all know job has disproportionately impacted women, africanamericans, and other minorities. But at the same time, our Capital Markets have improved significantly. Why is this . Is there something you are doing more so to help the Capital Markets than helping job losses corrected . The objective of everything we are doing, every single thing we are doing, is to take the 20 finally people whose working lives have been disrupted and create a situation in which a have the best chance to go back to their old job or get a new job. That includes all of the facilities we are doing, the overriding goal of what we are doing. Everything helps in that direction. But know that is your goal, what im trying to get at is, is it correctable . Are there some things that you can do to fix this imbalance between staggering, lowering risesloyment, and soaring in our Capital Markets . Chair powell what we have been trying to do is create accommodative financial conditions, supported conditions , so that when the economy reopens remember, we deliberately close down so that when the economy reopens, that expansion can be vigorous and strong. So our support for that is part of what is driving the job growth that you saw in may, which was crossing to the upside. Surprising to the upside. While we have both of you here, i want to pick up on what chairwoman waters was saying. We have a great opportunity here with both of these things. Ur housing and homeowners bellyoes right into the of our economic wheelhouse, jobs, keeping people secure. Because it is coming, man. When 25, 30 Million People lose their jobs, how are they going to pay their house note . How are they going to pay the rent, utilities . More important than that, how are the banks and financial ins tuitions institutions going to get their mortgage payments in, so that they can make payments for the securitization of those mortgages that keeps our Financial System healthy . You to make ask sure that you all Start Talking , that we arehings putting forward maybe you dont agree with everything but that this is one that is very important. , tome go to one other area you, secretary mnuchin. None of the lending facilities established have targeted the needs of our agriculture industry. Why do i mention that . Food. It is coming. I cannot see why people do not see this crisis. Coming. Rtages are it is almost like the farmers have been forgotten. Are they quantifiable as Small Business . Many of them dont know. They are sort of out there, drifting along the misty flats. What are you all doing to help lift up and make sure that we give our farmers, Rural Communities that kind of help that we need . The food chain is going down. You hear about the closures, the processors going out, farmers are coming. They are small but most of them are very important. Why cant they be qualified as Small Businesses . Where are they . They are getting lost in the shuffle. We get a food shortage chairwoman waters thank you. I would encourage all of the members to keep their mask on, please. Thank you, madam chair. Thank you, secretary mnuchin, chairman powell for being here today, and for your great leadership during this time. As we have gone through this, you have been very responsive, very cooperative. I can tell you from discussions we have had in different settings, you implemented lots of suggestions and we have come up with as a group in congress, and for that we are grateful. Leaders make tough decisions in tough times and you have both exhibited the ability to make those decisions. Thank you very much. Both of you in the past have expressed to us for Housing Finance reform. To reviewingitted respected policies determine whether capital relief is appropriate for banking regulations that engage with sound counterparties. They have recently imposed a so havek and in doing taken a confused and more punitive approach to certain types of crt. I am encouraged by the questions which would seem to indicate room for revision before the rooms final. I ask if we avoid the accumulation of credit risks for the Balance Sheets of institutions that remain taxpayerbacked. Yes, i agree they should receive relief and we should encourage them to do transfers. I can also tell you f suck f soc is reviewing this as well. We are actually in the middle middle of doing a careful review of the whole counsel. As you know, it is hard for me to let a here and without talking about cecil