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The Ninth Report of the Congressional Oversight Commission

January 28, 2021

Commission Members
U.S. Representative French Hill
Donna E. Shalala
U.S. Senator Pat Toomey

3

TABLE OF CONTENTS
Introduction
Summary of Commission’s First Eight Reports
Treasury and Federal Reserve Recent Developments
Appendix A: Commission Letter to Federal Reserve Regarding the Main Street Lending Program
Loans
Appendix B: Commission Letter to U.S. Transportation Command Regarding Crowley Logistics
Appendix C: Treasury Department’s Responses to Questions Regarding the Airline Loan
Program, dated January 15, 2021

4

5

INTRODUCTION
This is the ninth report of the Congressional Oversight Commission (“Commission”)
created by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). 1 The
Commission’s role is to conduct oversight of the implementation of Division A, Title IV,
Subtitle A of the CARES Act (“Subtitle A”) by the U.S. Department of the Treasury
(“Treasury”) and the Board of Governors of the Federal Reserve System (“Federal Reserve”).
Subtitle A provided $500 billion to the Treasury for lending and other investments “to provide
liquidity to eligible businesses, States, and municipalities related to losses incurred as a result of
coronavirus.” 2
Of this amount, $46 billion was set aside for the Treasury itself to provide loans or loan
guarantees to certain types of companies. Up to $25 billion was available for passenger air
carriers, eligible businesses certified to inspect, repair, replace, or overhaul services, and ticket
agents. Up to $4 billion was available for cargo air carriers, and up to $17 billion was available for
businesses “critical to maintaining national security.” 3 Any unused portions of this $46 billion,
and the remaining $454 billion, may be used to support emergency lending facilities established
by the Federal Reserve.
The CARES Act charges the Commission with submitting regular reports to Congress on:
•
•
•
•

The Federal Reserve’s use of its authority under Subtitle A, including the use of
contracting authority and administration of the provisions of Subtitle A.
The impact of loans, loan guarantees, and investments made under Subtitle A on the
financial well-being of the U.S. economy.
The extent to which the information made available on transactions under Subtitle A has
contributed to market transparency.
The effectiveness of loans, loan guarantees, and investments made under Subtitle A in
minimizing long-term costs to the taxpayers and maximizing the benefits for taxpayers. 4

In its first report to Congress on May 18, 2020, the Commission stated that it is
responsible for answering two basic questions:
•

What are the Treasury and the Federal Reserve doing with $500 billion of taxpayer
money?

CARES Act, Pub. L. No. 116-136, § 4020, 134 Stat. 281 (2020).
Id. § 4003(a).
3
Id. § 4003(b). In addition, Division A, Title IV, Subtitle B of the CARES Act (“Subtitle B”) authorized the Treasury
to provide up to $32 billion in financial assistance to passenger air carriers, cargo air carriers, and certain airline
industry contractors that must be exclusively used for the continuation of payment of employee wages, salaries, and
benefits. Of this amount, up to $25 billion is available for passenger air carriers; up to $4 billion is available for cargo
air carriers; and up to $3 billion is available for certain airline industry contractors. Subtitle B is not within the
jurisdiction of the Commission.
4
Id. § 4020.
6
1
2

•

Who is that money helping? 5

As of December 31, 2020, the emergency lending facilities established by the Federal
Reserve that received CARES Act funds are:
Primary Market Corporate Credit Facility (“PMCCF”) and Secondary Market
Corporate Credit Facility (“SMCCF”): Through a special purpose vehicle (“SPV”),
the PMCCF enabled the Federal Reserve to purchase newly issued corporate bonds
and portions of syndicated loans, and the SMCCF enabled the Federal Reserve to
purchase previously issued corporate bonds and exchange-traded funds (“ETFs”) that
invest in corporate bonds. 6 The PMCCF never made any purchases. 7 As of January
13, 2021, the SMCCF had an outstanding amount of bond ETFs and individual
corporate bond purchases of $14.3 billion. 8
Main Street Lending Program (“MSLP”): The MSLP is comprised of five
facilities— three dedicated to for-profit businesses and two dedicated to non-profit
organizations. The Federal Reserve, through an SPV, acquired loans issued by
lenders to small and medium-sized businesses and non-profit organizations with up
to 15,000 employees or 2019 revenues of $5 billion or less. As of December 14,
2020, 644 lenders had registered to participate in the program which no longer is
accepting new submissions. 9 As of January 13, 2021, the Federal Reserve held
$14.3 billion in loan participations purchased under the MSLP. 10
Municipal Liquidity Facility (“MLF”): Announced on April 9, 2020, the MLF enabled
the Federal Reserve, through a SPV, to purchase short-term notes issued by state and
local governments. The Treasury initially announced it intended to make an equity
Congressional Oversight Commission, Questions About the CARES Act’s $500 Billion Emergency Economic
Stabilization Funds, May 18, 2020, at 5, https://coc.senate.gov/sites/default/files/202008/20200518_Congressional_Oversight_Committee_1st_Report.pdf.
6
Board of Governors of the Federal Reserve System, Primary Market Corporate Credit Facility Term Sheet, July 28,
2020, https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200728a9.pdf; Board of Governors
of the Federal Reserve System, Secondary Market Corporate Credit Facility Term Sheet, July 28, 2020,
https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200728a1.pdf.
7
Board of Governors of the Federal Reserve System, Periodic Report: Update on Outstanding Lending Facilities
Authorized by the Board under Section 13(3) of the Federal Reserve Act, Jan. 11, 2021,
https://www.federalreserve.gov/publications/files/pdcf-mmlf-cpff-pmccf-smccf-talf-mlf-ppplf-msnlf-mself-msplfnonlf-noelf-01-11-21.pdf.
8
Board of Governors of the Federal Reserve System, Statistical Release H.4.1, Factors Affecting Reserve Balances
of the Depository Institutions and Condition Statement of Federal Reserve Banks, Jan. 13, 2021, at n.4,
https://www.federalreserve.gov/releases/h41/. The SPV is the Corporate Credit Facilities LLC.
9
The lender registration summary data was provided by the Federal Reserve on November 28, 2020. Registered
lenders that are accepting new applicants are listed on a state-by-state basis at:
https://www.bostonfed.org/supervision-and-regulation/supervision/special-facilities/main-street-lendingprogram/information-for-borrowers.aspx.
10
Board of Governors of the Federal Reserve System, Statistical Release H.4.1, Factors Affecting Reserve Balances
of the Depository Institutions and Condition Statement of Federal Reserve Banks, Jan. 13, 2021, at table 4,
https://www.federalreserve.gov/releases/h41/. The SPV for the MSLP is MS Facilities LLC.
5

7

investment of $35 billion in the SPV, which could support up to $500 billion in
lending. 11 As of January 13, 2021, the MLF had $6.3 billion in outstanding purchases
of municipal notes. 12
Term Asset-Backed Securities Loan Facility (“TALF”): The TALF enabled the
Federal Reserve, through an SPV, to make loans to U.S. companies secured by assetbacked securities (“ABS”) backed by student loans, auto loans, credit card loans,
commercial mortgages, leveraged loans, loans guaranteed by the Small Business
Administration, and certain other assets. 13 TALF had a total outstanding amount of
$3.4 billion in loans as of January 13, 2021. 14
The Treasury’s Loans for National Security Businesses
The Treasury also had $17 billion available to make loans to businesses critical to
maintaining national security under Subtitle A through December 31, 2020. As of January
13, 2021, the Treasury reported that it had provided national security loans to eleven
businesses, totaling $735.9 million.15 One business, YRC Worldwide, Inc. (“YRC”),
accounted for 95% of the total outstanding. 16
The Treasury’s Loans for the Airline Industry
In addition, the Treasury had available $29 billion to make loans to the airline industry
under Subtitle A until December 31, 2020, with $25 billion was available to passenger air
carriers, including related businesses, and $4 billion available to cargo air carriers. 17 As of
January 13, 2021, the Treasury reported that it has provided twenty-four such loans to
Board of Governors of the Federal Reserve System, Municipal Liquidity Facility Term Sheet, Aug. 11, 2020,
https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200811a1.pdf; Federal Reserve Bank of
New York, FAQs: Municipal Liquidity Facility, Aug. 11, 2020, https://www.newyorkfed.org/markets/municipalliquidity-facility/municipal-liquidity-facility-faq.
12
Board of Governors of the Federal Reserve System, Statistical Release H.4.1, Factors Affecting Reserve Balances
of the Depository Institutions and Condition Statement of Federal Reserve Banks, Jan. 13, 2021, at table 4,
https://www.federalreserve.gov/releases/h41/. The SPV for the MLF is Municipal Liquidity Facility LLC.
13
Board of Governors of the Federal Reserve, Term Asset-Backed Securities Loan Facility Term Sheet, July 28,
2020, https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200728a6.pdf.
14
Board of Governors of the Federal Reserve System, Statistical Release H.4.1, Factors Affecting Reserve Balances
of the Depository Institutions and Condition Statement of Federal Reserve Banks, Jan. 13, 2021, at table 4,
https://www.federalreserve.gov/releases/h41/.
15
U.S. Department of the Treasury, Loans to Air Carriers, Eligible Businesses, and National Security Businesses,
last visited Jan. 21, 2021, https://home.treasury.gov/policy-issues/cares/preserving-jobs-for-americanindustry/loans-to-air-carriers-eligible-businesses-and-national-security-businesses.
16
U.S. Department of the Treasury, Loans to Air Carriers, Eligible Businesses, and National Security Businesses,
last visited Jan. 21, 2021, https://home.treasury.gov/policy-issues/cares/preserving-jobs-for-americanindustry/loans-to-air-carriers-eligible-businesses-and-national-security-businesses.
17
CARES Act § 4003. Related businesses are eligible businesses that are certified under part 145 of title 14, Code of
Federal Regulations, and approved to perform inspection, repair, replace, or overhaul services, and ticket agents (as
defined in Section 40102 of Title 49 of the United States Code).
11

8

companies the Treasury characterizes as airlines, ticket agents, a repair station, and a cargo air
carrier. 18 Those loans total $21.2 billion.19
State of the Commission
Section 4020 of Subtitle A created the Commission and outlines that the Commission
will consist of five members appointed by the Speaker of the House, the Senate Majority Leader,
the House Minority Leader, and the Senate Minority Leader. The fifth member is to be appointed
jointly by the Speaker of the House and Senate Majority Leader after consultation with the
House and Senate minority leaders and will serve as chair of the Commission.
At this time, the Commission has three Commissioners: Congressman French Hill (RAR) appointed by House Minority Leader Kevin McCarthy (R-CA), Commissioner Donna
Shalala appointed by Speaker of the House Nancy Pelosi (D-CA) and Senator Pat Toomey (RPA) appointed by Senate Minority Leader Mitch McConnell (R-KY).
As outlined in the Commission’s eighth report, Commissioner Bharat Ramamurti, who
was appointed by Senate Majority Leader Chuck Schumer (D-NY), stepped down from his role
on the Commission to join President Joe Biden’s administration. Senator Schumer has yet to
announce a replacement. Additionally, congressional leaders never appointed a chair for the
Commission.
The programs that the Commission oversees terminated on December 31, 2020, or
shortly thereafter. Under Section 4020 of Section A, the Commission shall terminate on
September 30, 2025. Therefore, the Commission currently remains operational and will continue
to release monthly reports. The Commission looks forward to analyzing loans, loan guarantees,
and investments that were made prior to program termination. In the short term, we hope to do a
deeper analysis on the loans underwritten as a part the MSLP and the Treasury’s airline industry
program. The Commission also congratulates Treasury Secretary Janet Yellen on her recent
confirmation and looks forward to working with her in the future.
***
In this report, we provide a summary of the Commission’s first eight reports. We also
provide updates regarding recent key actions taken by the Treasury and the Federal Reserve
regarding each of the above lending programs and facilities under Subtitle A, as well as
updates regarding the Commission’s oversight activities.

U.S. Department of the Treasury, Loans to Air Carriers, Eligible Businesses, and National Security Businesses,
last visited Jan. 21, 2021, https://home.treasury.gov/policy-issues/cares/preserving-jobs-for-americanindustry/loans-to-air-carriers-eligible-businesses-and-national-security-businesses (see “Transaction Summary” of
each transaction for more details).
19
Id.
18

9

SUMMARY OF COMMISSION’S FIRST EIGHT REPORTS
The Commission published eight monthly reports in 2020. These tracked the actions that
the Treasury and the Federal Reserve took to implement Subtitle A of the CARES Act. At the
time of the first report in May 2020, the Treasury had only disbursed $37.5 billion in CARES
Act funds to one Federal Reserve 13(3) facility, the SMCCF, and no funds had been disbursed to
the airlines industry and national security direct loan or loan guarantee programs. While each
report provided an insight into Treasury and Federal Reserve recent developments, several
reports featured in-depth analyses on the various programs, including the MSLP, MLF, the
national security loan program, and a specific national security loan to YRC.
Over the course of 2020, the Commission made 11 information requests to the Treasury,
Federal Reserve, and the Department of Defense. The Commission analyzed the responses
provided by these agencies to inform the 27 recommendations and conclusions the Commission
made in its reports relating to the Subtitle A programs. Below are summaries of the
Commission’s first eight reports.
First Report—May 18, 2020
The Commission reviewed the actions that the Treasury and the Federal Reserve took to
implement Subtitle A through May 17, 2020—including the design of lending programs and
facilities—and outlined preliminary questions based on those actions.
Second Report—June 18, 2020
The second report focused on Treasury and the Federal Reserve’s plans to use $195
billion of the $454 billion specifically allocated by the CARES Act to support emergency
lending facilities established by the Federal Reserve. That money was dedicated to several
lending facilities that the Federal Reserve determined could support nearly $2 trillion in loans
and asset purchases. As of June 17, 2020, the majority of those lending facilities were not
operational, and the facilities had made a total of $6.7 billion in purchases.
Third Report—July 20, 2020
As of July 15, 2020, the Federal Reserve’s CARES Act lending facilities had made a
total of $13.6 billion in purchases and loans. The Treasury had made one direct loan, totaling
$700 million, to YRC, a business it decided was critical to maintaining national security. As of
publication of the third Report, all of the Federal Reserve facilities funded by the CARES Act
were operational.
Fourth Report—August 21, 2020
The fourth report of the Commission principally focused on the implementation of the
MSLP by the Federal Reserve and the Treasury. The MSLP provided liquidity to small and
medium-sized businesses by backing loans to businesses with up to 15,000 employees or less
than $5 billion in 2019 revenue. The program also backed loans to certain nonprofit
10

organizations between 10 and 15,000 employees or $5 billion in 2019 revenues. The Treasury
had pledged to invest $75 billion in the program, which was administered by the Federal Reserve
Bank of Boston (“Boston Federal Reserve”).
The Commission noted that at least three factors should inform policy discussions about
the scope of the Federal Reserve’s emergency efforts to provide liquidity to small and mediumsized businesses.
•
•
•

Current economic conditions;
The critical economic contribution of small and medium-sized businesses; and
The need or desire of small and medium-sized businesses for credit.
Fifth Report—October 15, 2020

The fifth report of the Commission focused on the implementation of the MLF by the
Federal Reserve and the Treasury.
The MLF calmed the municipal markets and provided an emergency lending backstop for
states and municipalities. Rates for one to three year municipal notes fell lower than COVID-19
pandemic peak levels, but spreads to Treasuries remained elevated relative to pre-pandemic
conditions. Nearly all investment-grade issuers were able to access the capital markets.
Sixth Report—October 29, 2020
The sixth report of the Commission provided updates regarding the Treasury, Federal
Reserve, and Commission’s activities since the Commission’s last report, which was issued on
October 15, 2020.
Seventh Report—November 30, 2020
The seventh report of the Commission focused on the Treasury and the Department of
Defense’s $700 million loan to YRC, which was made under the loan program “for businesses
critical to maintaining national security.” Under the program, the Treasury determined the rates
and conditions of the loans, while the Department of Defense or Director of National Intelligence
determine whether the business is critical to maintaining national security. In YRC’s case, the
Department of Defense made the national security designation.
The Commission also had serious concerns about the Treasury’s decisions regarding the
terms and conditions of the loan. YRC has been operating at a loss and has had poor credit
ratings—both before and during the pandemic. The Commission was concerned about the
significant risk that YRC could default on the loan and the fact that the Treasury’s lien position
was less favorable than that of YRC’s other creditors.
Eighth Report—December 31, 2020
The eighth report of the Commission was a continuation of the seventh report which
focused on the Treasury and the Department of Defense’s $700 million loan to YRC, which was
11

made under the loan program “for businesses critical to maintaining national security.” This
report also analyzed part of the additional ten smaller loans also executed as part of this program.

12

TREASURY AND FEDERAL RESERVE RECENT DEVELOPMENTS
As of January 8, 2021, all of the emergency lending programs created by the Treasury
and the Federal Reserve under Section 4003 of the CARES Act have ceased operations. On
December 21, 2020, Congress passed new COVID-relief legislation in the Consolidated
Appropriations Act, 2021, Pub. L. No. 115-260. In that legislation, Congress prohibited these
Federal Reserve’s CARES Act lending facilities from being restarted or replicated without
congressional approval and rescinded the remaining unobligated balance of the $500 billion
previously made available under Section 4003 of the CARES Act for emergency lending
programs. 20 The legislation immediately rescinded $429 billion upon enactment and directed
the rescission of further amounts not needed to fund outstanding commitments as of January 9,
2021. 21 Pursuant to the latter directive, on January 7 and 8, 2021, the Federal Reserve
transferred $62.2 billion to the Treasury and made corresponding amendments to its equity
agreements with the Treasury. 22
We summarize below the final amounts of credit extended by each facility, and other
key developments. The Commission intends to do a more fulsome year-end analysis of the
programs in its next report. In particular, the Commission’s next report will focus on the
MSLP, as that program saw a large increase in loan volume in its final days. The Commission
recently sent a letter to the Federal Reserve asking for further information related to the MSLP
as outlined in Appendix A.
Primary Market Corporate Credit Facility
The PMCCF eased operations on December 31, 2020. The PMCCF did not engage in
any transactions during the period in which it was operational. 23
Consolidated Appropriations Act, 2021, Pub. L. No. 115-260, Division N, Title X, § 1003, 134 Stat. 1182.
Id.
22
Letter from Federal Reserve Bank of Boston to U.S. Department of the Treasury, dated Jan. 11, 2021,
https://www.bostonfed.org/-/media/Documents/special-lendingfacilities/mslp/legal/2021_01_11_Letter_to_UST.pdf (MSLP transfer letter); Second Amended and Restated
Limited Liability Company Agreement of MS Facilities LLC, https://www.bostonfed.org//media/Documents/special-lendingfacilities/mslp/legal/MLSP_Amended_and_Restated_Limited_Liability_Company_Agreement_Jan20201_with_Rev
ised_Schedule_A.pdf (MSLP amended agreement); Letter from Federal Reserve Bank of New York to U.S.
Department of the Treasury, dated Jan. 7, 2021, https://www.newyorkfed.org/medialibrary/media/markets/mlf/MLFlimited-liability-company-agreement (MLF transfer letter and amended agreement); Letter from Federal Reserve
Bank of New York to U.S. Department of the Treasury, dated Jan. 7, 2021,
https://www.newyorkfed.org/medialibrary/media/markets/SMCCF_Limited_Liability_Company_Agreement.pdf
(CCFs transfer letter and amended agreement); Letter from Federal Reserve Bank of New York to U.S. Department
of the Treasury, dated Jan. 7, 2021,
https://www.newyorkfed.org/medialibrary/media/markets/talfdocs/TALF_Limited_Liability_Company_Agreement.
pdf (TALF transfer letter and amended agreement).
23
Board of Governors of the Federal Reserve System, Periodic Report: Update on Outstanding Lending Facilities
Authorized by the Board under Section 13(3) of the Federal Reserve Act, Jan. 9, 2021,
https://www.federalreserve.gov/publications/files/pdcf-mmlf-cpff-pmccf-smccf-talf-mlf-ppplf-msnlf-mself-msplf20
21

13

Secondary Market Corporate Credit Facility
The SMCCF ceased operations on December 31, 2020. As of its closure, the SMCCF
had purchased individual corporate bonds from 557 different issuers, with the amortized cost of
outstanding individual bond holdings totaling $5.5 billion.24 The chart below summarizes the
SMCCF’s 15 largest individual bond holdings. 25 As of its closure, the SMCCF also owns 16
bond ETFs with a market value of $8.8 billion, including 7 high-yield bond ETFs. 26
It is unclear whether and when the Federal Reserve will unwind its corporate bond
investments, particularly with respect to the ETFs. Chair Powell has testified that “[w]e are
generally a hold to maturity [investor]. It may be that we sell some back into the secondary
market down the road, but ultimately we’re [a] buy-and-hold type buyer.” 27

nonlf-noelf-01-11-21.pdf#page=3.
24
Board of Governors of the Federal Reserve System, Periodic Report: Update on Outstanding Lending Facilities
Authorized by the Board under Section 13(3) of the Federal Reserve Act (Transaction-specific Disclosures), Jan. 11
2021, https://www.federalreserve.gov/publications/files/smccf-transaction-specific-disclosures-01-11-21.xlsx.
25
Id. As reflected in the transaction-level disclosure, a number of the corporate bonds held by the Federal Reserve
have matured, been redeemed, or been exchanged.
26
Id.
27
House Financial Services Committee Hearing on Economic with Federal Reserve Chair Jerome Powell, 116th
Cong. (June 17, 2020) (Testimony of Chair Jerome Powell), available at
https://www.rev.com/blog/transcripts/house-financial-committee-hearing-transcript-on-economy-with-jeromepowell.
14

Issuer

Sector

Amortized
Cost
($ Millions)

AT&T Inc.
Toyota Motor Credit Corp.
Daimler Finance North America LLC
Verizon Communications Inc.
Volkswagen Group of America
Finance LLC
Apple Inc.
Comcast Corp.
BMW US Capital LLC
General Electric Co.
Ford Motor Credit Co. LLC
Microsoft Corp.
AbbVie Inc.

Communications
Consumer Cyclical
Consumer Cyclical
Communications
Consumer Cyclical

98.2
95.8
92.9
92.2
89.7

Percentage
SMCCF
Individual
Bond Holdings
1.77%
1.73%
1.68%
1.66%
1.62%

Technology
Communications
Consumer Cyclical
Capital Goods
Consumer Cyclical
Technology
Consumer NonCyclical
Consumer NonCyclical
Energy
Consumer Cyclical

87.5
84.6
69.7
68.5
68.2
67.4
58.4

1.58%
1.53%
1.26%
1.24%
1.23%
1.22%
1.06%

53.4

0.96%

53.2
50.3

0.96%
0.91%

CVS Health Corp.
BP Capital Markets America Inc.
General Motors Financial Co. Inc.

Main Street Lending Program
The Consolidated Appropriations Act, 2021 permitted a brief extension of the period to
submit new loans to the MSLP. The legislation authorized the MSLP to purchase additional
loan participations until January 8, 2021, provided that the loan was submitted to the MSLP’s
lender portal on or before December 14, 2020. 28 The Federal Reserve subsequently voted to
extend the MSLP’s expiration date until January 8, 2021, 29 and the MSLP ceased operations on
that date.
The total loan participations purchased by the MSLP while it was operational totaled
$16.6 billion,30 representing 2.8% of its original $600 billion lending capacity. 31 More than half

Consolidated Appropriations Act, 2021, Pub. L. No. 115-260, Division N, Title X, § 1005, 134 Stat. 1182.
Board of Governors of the Federal Reserve, Board Votes, Dec. 29, 2020,
https://www.federalreserve.gov/aboutthefed/boardvotes.htm.
30
Letter from Federal Reserve Bank of Boston to U.S. Department of the Treasury, dated Jan. 11, 2021,
https://www.bostonfed.org/-/media/Documents/special-lendingfacilities/mslp/legal/2021_01_11_Letter_to_UST.pdf (MSLP transfer letter).
31
Board of Governors of the Federal Reserve, Federal Reserve takes additional actions to provide up to $2.3 trillion
in loans to support the economy, Apr. 9, 2020,
https://www.federalreserve.gov/newsevents/pressreleases/monetary20200409a.htm.
28
29

15

of that $16.6 billion reflects MSLP loan purchases made in December 2020. 32 In a recent speech,
Boston Federal Reserve President Eric Rosengren, who oversaw the MSLP’s implementation,
stated that the MSLP experienced a significant December “surge in demand following the
November 19 announcement of the decision by the Treasury to not extend the facility,” with the
MSLP settling nearly twice the number of loans in December as it had from July to November
and with 45% of the ultimate total pool of lenders participating in the MSLP for the first time in
December. 33 President Rosengren attributed the December surge to both the announcement of
the program’s impending closure and to “the stresses many medium-sized businesses were
experiencing at the end of 2020 as a result of the resurgence of COVID infections.” 34 He further
stated that, in his view, “were certain tweaks permitted, [the MSLP] could have been more
impactful.” 35
As noted above, the Commission intends to focus its next report in part on the MSLP
program’s surge. Final transaction-level disclosures for the program are not yet available but are
anticipated in early February 2021.
Municipal Liquidity Facility
The MLF ceased operations on December 31, 2020. During its period of operation, the
MLF purchased a total of four notes from just two borrowers— State of Illinois and New York
City’s Metropolitan Transportation Authority. These notes total $6.6 billion, representing 1% of
the MLF’s original $500 billion lending capacity. 36
Term Asset-Backed Securities Loan Facility
The TALF ceased operations on December 31, 2020. During its period of operation, the
TALF made 224 loans totaling $4.4 billion to 20 investment funds. 37 More than half of the
material investors in these investment funds are foreign companies. 38 The following chart shows
the five investment funds that received the most TALF money.

Board of Governors of the Federal Reserve System, Periodic Report: Update on Outstanding Lending Facilities
Authorized by the Board under Section 13(3) of the Federal Reserve Act (Transaction-specific Disclosures), Jan. 11
2021, https://www.federalreserve.gov/publications/files/mslp-transaction-specific-disclosures-01-11-21.xlsx.
33
Eric S. Rosengren, President and Chief Executive Officer, Federal Reserve Bank of Boston, The Economic
Outlook – Optimism Despite the Challenges Ahead, Speech to the Greater Boston Chamber of Commerce, dated Jan.
12, 2021, at 10, https://www.bostonfed.org/-/media/Documents/Speeches/PDF/20210112-text.pdf.
34
Id.
35
Id. at 11.
36
Board of Governors of the Federal Reserve System, Periodic Report: Update on Outstanding Lending Facilities
Authorized by the Board under Section 13(3) of the Federal Reserve Act (Transaction-specific Disclosures), Jan. 11
2021, https://www.federalreserve.gov/publications/files/mlf-transaction-specific-disclosures-01-11-21.xlsx.
37
Board of Governors of the Federal Reserve System, Periodic Report: Update on Outstanding Lending Facilities
Authorized by the Board under Section 13(3) of the Federal Reserve Act (Transaction-specific Disclosures), Jan. 11
2021, https://www.federalreserve.gov/publications/files/talf-transaction-specific-disclosures-01-11-21.xlsx.
38
Id.
32

16

Investment Fund
Alta Fundamental Advisers SP LLC Belstar-Alta Series 1
MacKay Shields TALF 2.0 Opportunities
Master Fund LP
Alta Fundamental Advisers SP LLC Belstar-Alta Series 2
Palmer Square TALF Opportunity Sub
LLC
BlackRock Securitized Investors, L.P.

TALF Loan Amount ($)

Percentage of Total
TALF Program

2,336,550,918

52.5%

900,005,025

20.2%

268,263,483

6.0%

221,611,128
113,504,000

5.0%
2.6%

The investment funds use TALF loans to purchase securities backed by certain types of
consumer and business loans. The chart below illustrates the collateral sector breakdown of the
underlying loans that were purchased by investor funds using TALF loan proceeds.
Collateral Sector

TALF Loan Amount ($)

Small Business Administration Loans
Commercial Mortgage
Leveraged Loan
Private Student Loans
Premium Finance
Total

2,414,888,209
1,158,134,316
479,600,000
289,156,531
106,934,556
4,448,713,611

Percentage of Total
TALF Program
54.3%
26.0%
10.8%
6.5%
2.4%
100.0%

The following chart shows the five asset-backed securities issuers with the most TALF-funded
purchases.
Issuer

Sector
Small Business

TALF Loan
Amount ($)
2,414,888,209

Percentage of Total
TALF Program
54.3%

Small Business
Administration
Golub Capital Partners
TALF 2020-1 LLC
Navient Private
Education Refi Loan
Trust 2020-F
Golub Capital Partners
TALF 2020-2 LLC
PFS Financing Corp

Leveraged Loan

327,600,000

7.4%

Private Student Loans 213,372,493

4.8%

Leveraged Loan

152,000,000

3.4%

Premium Finance

106,934,556

2.4%

17

Treasury Loans for National Security Businesses
The Treasury did not make any additional national security loans since the Commission’s
last report, and the program is now closed. During its operation, the national security loan
program made 11 loans totaling $735.9 million. 39 The Commission continues to review these
loans, their documentation and the rational for these select companies. The Commission recently
sent a letter to the U.S. Transportation Command, a DOD functional combatant
command responsible for providing air, land, and sea transportation to meet national security
needs. The letter inquires about Crowley Logistics’ work a prime contractor for the DOD and
Crowley’s relationship with their subcontractor, YRC. The letter is attached as Appendix B.
Treasury Loans for the Airline Industry
The Treasury did not make any additional airline loans since the Commission’s last
report, and the program is now closed. During its operation, the airline loan program made 24
loans totaling $12.4 billion. 40 The Commission submitted written questions to the Treasury
regarding the airline loan program on November 30, 2020. The Treasury’s written responses,
provided to the Commission on January 15, 2021, are attached as Appendix C.

U.S. Department of the Treasury, Loans to Air Carriers, Eligible Businesses, and National Security Businesses,
last visited Jan. 15, 2020, https://home.treasury.gov/policy-issues/cares/preserving-jobs-for-americanindustry/loans-to-air-carriers-eligible-businesses-and-national-security-businesses.
40
Id.
39

18

Appendix A:
Commission Letter to Federal Reserve Regarding the Main Street Lending
Program Loans

January 26, 2021
The Honorable Jerome H. Powell
Chairman
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue, NW
Washington, DC 20551

The Honorable Eric S. Rosengren
President & Chief Executive Officer
Federal Reserve Bank of Boston
600 Atlantic Avenue
Boston, MA 02210

Dear Chairman Powell and President Rosengren:
Section 4020(b) of the CARES Act charges the Congressional Oversight Commission with the
duty to conduct oversight of both the Treasury Department and the Federal Reserve with respect to
Subtitle A, Division A programs.
Pursuant to Section 4020(e)(1), (4) of the Act, the Congressional Oversight Commission requests
that you provide copies of a sample of loan files related to the recently completed Main Street Lending
Program as outlined below. This sample represents a few of the program’s smallest loans, biggest loans,
median-sized loans, and loans from the program’s most frequent lender, National City Bank of Florida. In
addition, we would like you to discuss what your plan is for monitoring the performance of loans in the
Main Street Lending Program now that the program has completed.
Sample of Loans Requested by Borrower:
•
•
•
•
•
•
•
•
•

Red Rooster of Ridgefield, LLC, (Lender ABA# 221172241)
Tres Hombres Restaurants, Inc., (Lender ABA# 26009593)
Marquez Farms LLC (Lender ABA# 066004367)
Newport Property Construction, LTD. (Lender ABA# 075910921)
Fitness International, LLC (Lender ABA# 26009593)
BCD Travel USA LLC (Lender ABA# 26009593)
SB Investment Group, Inc. (Lender ABA# 066004367)
DeMayo Restaurant Group, Inc. (Lender ABA# 066004367)
Venevision Continental LLC (Lender ABA# 066004367)
The Commission is willing to accept the information on a confidential basis. The Commission
kindly asks that this information be provided by February 16, 2021 in order for it to be able to conduct
proper oversight in anticipation of the February report. Thank you for your attention to this matter.
Sincerely,
/s/
French Hill
Member of Congress
/s/
Pat Toomey
U.S. Senator

/s/
Donna Shalala
Commissioner

Appendix B:
Commission Letter to U.S. Transportation Command Regarding Crowley
Logistics

January 25, 2021
General Stephen R. Lyons
Commander
U.S. Transportation Command
Scott Air Force Base
Illinois, 62225
Dear General Lyons:
This letter continues the Congressional Oversight Commission’s (the “Commission”)
review of the U.S. Department of Treasury (the “Treasury”) loan provided to YRC Worldwide,
Inc. (“YRC”). As you may know, the Commission has been tasked with overseeing the $454
billion provided to the Treasury’s Exchange Stabilization Fund per the Coronavirus Aid, Relief
and Economic Security Act (CARES Act). Of those funds, $17 billion was designated to
businesses critical to maintaining national security of which YRC received $700 million. The
Department of Defense (the “DOD”) determined that YRC is critical to national security.
The Commission has been doing extensive oversight of the YRC loan as it believes the
loan may be hurtful to taxpayers. As part of that work, the Commission conducted a hearing with
Treasury and a teleconference briefing with DOD. It has also sent multiple letters and questions
to both agencies. As part of the DOD teleconference briefing with Undersecretary Ellen M. Lord,
the Commission received additional documentation including a copy of the Crowley Logistics
(“Crowley”) contract dated November 22, 2016 and a copy of the contract modification dated
August 1, 2020. These were accompanied by a performance work statement (“PWS”) for
Department of Defense Freight Transportation Services (“DFTS”) dated August 1, 2020. The
Commission acknowledges that these documents are for internal use only and not for public
dissemination.
In response to this additional documentation, the Commission has additional questions
and information it would like answered or provided as it relates to the work Crowley does as a
prime contractor for the DOD. Please note, the Commission has addressed this letter to
USTRANSCOM as it believes you are in the best position to provide the necessary information,
however, please consult with DOD as warranted to ensure the Commission receives the most
complete answers possible.
1. Correspondence between USTRANSCOM and Crowley
Undersecretary Lord told the Commission during her teleconference that DOD does not
oversee subcontractors and leaves that responsibility to the prime contractor. That same
sentiment is echoed in the PWS stating that “the Contractor shall manage its human and physical
resources, including its sub-contractors, to partner with DOD and its stakeholders.” Additionally,
Undersecretary Lord stated in her follow-up materials that USTRANSCOM contacted Crowley
regarding the anticipated effect of YRC ceasing LTL services.

Please summarize the extent of that correspondence and provide any documentation of
that correspondence including, but not limited, email correspondence with Crowley and the
DOD, memoranda, summary of all meetings and phone calls USTRANSCOM had with Crowley
and DOD and any corresponding documentation.
Additionally, in USTRANSCOM’s correspondence with Crowley, what did they say
would be the anticipated effect of ceasing YRC’s LTL services? Did USTRANSCOM ask
Crowley if YRC should be designated as critical to national security? If so, please provide the
justification Crowley provided.
2. Additional Documentation
As outlined, the PWS requires timely reporting of key metrics for each contractor and
requires contractor to “supply a scorecard of all required performance data to the government
program manager and the contracting officer and the contracting officer representative.”
Please provide copies of the metrics reported by Crowley for all subcontracted LTL
carriers, not just YRC, for 2018, 2019 and 2020. The reports should include but not be limited to
on time response, on time pick up, on time delivery, and any loss and damage claims.
Please also provide information related to the freight prices paid monthly for 2018, 2019,
and 2020, including total freight prices and average freight calls for all LTL shipments, not just
YRC. Please show present the data as cost per mile, cost per hundredweight, cost per pound, as
appropriate.
Thank you for your willingness to help the Congressional Oversight Commission. We
have appreciated the work and cooperation of the DOD with the Commission thus far and look
forward to a continued positive relationship.
Sincerely,
/s/
French Hill
Member of Congress

/s/
Pat Toomey
U.S. Senator
CC:

Lloyd J. Austin III, Secretary of Defense

/s/
Donna Shalala
Commissioner

Appendix C:
Treasury Department’s Responses to Questions Regarding the Airline Loan
Program, dated January 15, 2021