ASA Calls on Fed to Establish “Main Street” Credit Facility

This decision would support America’s Main Street economy by ensuring credit flows to where it’s needed most across our country

WASHINGTON – The American Securities Association (ASA) today sent a letter to Federal Reserve Chairman Jerome Powell urging the Board to use its authority to authorize a “Main Street” non-primary dealer credit facility to expand credit to the broader economy in the wake of market turmoil caused by the COVID-19 outbreak. ASA’s letter follows action by the Board last month to create a Primary Dealer Credit Facility (PDCF) that currently only the largest and most financially interconnected firms (i.e. primary dealers of the New York Fed) are eligible to access.

“We believe the Board should authorize a non-primary dealer credit facility or affirm that non-primary dealers have access to one of the credit facilities the Board has the authorization to create,” ASA CEO Chris Iacovella wrote in the letter. “This decision would support America’s Main Street economy by ensuring credit flows to where it’s needed most across our country,” Iacovella said.

“Without continued access to credit, liquidity problems could become much bigger issues for businesses and municipalities across America, and we believe providing non-primary dealers with access to a credit facility can help to avoid that outcome.”

In the letter, ASA urged the Board to use its broad statutory authority under Section 13(3) of the Federal Reserve Act to extend credit in “unusual and exigent circumstances” to borrowers that post sufficient collateral.

To read the full letter, click here.

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ASA’s regional financial services companies work in communities across the country to create jobs, grow the economy, and increase prosperity for all Americans. The ASA exclusively represents the capital market and private client interests of its members and seeks to promote free market principles making it easier to access financial advice and capital. ASA members help Americans save for retirement, provide Main Street businesses with capital to grow, and advise hardworking Americans how to create and preserve wealth. For the latest updates follow @AmerSecurities and learn more at http://americansecurities.org/.