Rep. Pressley Calls on Federal Reserve to Expand Municipal Lending Facility and Do More to Support Municipal Finances Amid COVID-19 Crisis
WASHINGTON – Today, following a hearing of the CARES Act Congressional Oversight Commission on the Federal Reserve’s Municipal Liquidity Facility (MLF), Congresswoman Ayanna Pressley (MA-07) released the following statement calling on the Fed to make changes to the terms and conditions of MLF funding to support municipalities facing financial distress as a result of the COVID-19 crisis:
“The Federal Reserve has gone to great lengths to stabilize corporate debt markets amid the economic crisis caused by the COVID-19 pandemic. While the Fed also established the Municipal Liquidity Facility (MLF) to support cities’ and states’ capacity to weather this crisis, the punitive terms and restrictive eligibility have discouraged nearly all municipalities in need from accessing this critical relief. In fact, the Fed’s original terms would have excluded most majority-Black cities from eligibility. Today’s hearing only further exposed the incoherence of the Fed’s refusal to support America’s cities and states—a refusal that is negligent, undermines its supposed commitment to an equitable recovery, and guarantees that corporations are getting a better deal than our communities.”
“As Commissioner Ramamurti also noted, public sector workers who are laid off are twenty percent more likely to be Black than private sector workers, meaning that the Fed’s inaction specifically jeopardizes the livelihoods of a disproportionate number of Black and brown workers. In this historic moment or reckoning, every institution must examine its role in addressing the impacts of systemic racism, and the Federal Reserve is no exception. If the Fed is truly interested in advancing racial and economic justice, as Chairman Powell has recently claimed, they must do more to support our cities and states and the employment and services they provide. Should they refuse to do so on their own, my colleagues and I in Congress will examine every tool at our disposal to ensure that they do.”
Congresswoman Pressley has been leading calls for the Fed to do more to support municipalities and vulnerable communities amid the COVID-19 crisis. In July, she penned an op-ed for CNBC.com calling on the Fed to take concrete actions to address disproportionately high levels of Black unemployment. In March, she called for any COVID-19 relief legislation to include provisions requiring the Fed to provide relief for the secondary market and purchase new state and municipal debt issuances. In a February hearing of the House Financial Services Committee, Rep. Pressley got Fed Chairman Jerome Powell to admit on the record for the first time in history that the central bank on its own, will never achieve full employment.
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