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Banks Blame Tight Terms for Fed Main St Program’s Slow Start

  • Fed survey shows banks point to ‘unattractive’ conditions
  • Few banks expect their enthusiasm for program to increase
Photographer: Brendan Smialowski/Bloomberg
Updated on

Banks said “overly restrictive” terms for borrowers discouraged them from approving more loans under the Federal Reserve’s Main Street Lending Program, while others cited “unattractive” terms for lenders for not participating at all, a new Fed survey showed.

“Major fractions of banks of all sizes indicated that the loss sharing with the MSLP in the event of a default was too uncertain, and that the required certifications and covenants were too restrictive for the bank,” the Fed said Tuesday in releasing the results of a special edition of its Senior Loan Officer Opinion Survey on Bank Lending Practices.