Federal Reserve bows again to Big Oil
New rules latest favor to industryWASHINGTON– On the eve of its expected launch, The Federal Reserve has once again modified the terms of the Main Street lending program, a $600 billion program established with money from the stimulus. The new changes increase the maximum loan size to $300 million, lengthen the repayment period, and increase the share of risk borne by taxpayers as opposed to banks. The increase in the overall loan size was sought specifically by Energy Secretary Dan Brouillette for the benefit of oil companies.
The previous changes made in April allowed loans under the program to refinance existing debt—a demand that Senator Cruz specifically made to the Fed on behalf of the oil and gas industry, and which reflects another request from the Independent Petroleum Association of America.
Friends of the Earth program manager Lukas Ross issued the following response:
A surefire way to put taxpayers on the hook for distressed oil companies is to increase the loan size and increase the public share of debt. This is the second time this program has been modified to suit the failing oil industry. The Federal Reserve loans are intended for struggling main streets, not for Big Oil companies who were struggling long before the coronavirus. Congress needs to step up to the plate with oversight and new legislation to make sure that the oil industry does not get another dime of stimulus money.
Expert contact: Lukas Ross, (202) 222-0724, [email protected]
Communications contact: Aisha Dukule, 202-893-3502, [email protected]