Apr 15, 2020 IPAA Advocates for Changes to Federal Reserve’s Main Street Lending Program
Posted at 16:29h
in Letters and Comments
On Wednesday, April 15, IPAA President and CEO Barry Russell sent a letter to Chairman of the Federal Reserve Jerome Powell regarding the ‘Main Street Lending Program.‘
The letter states IPAA “writes to recognize and appreciate the aggressive steps that have been t ken to respond to the threats of the COVID-19 pandemic. As federal, state and local governments continue to work on relief measures, such as the CARES Act, we respectfully request that their implementation consistently supports the American energy industry and protects its workforce….
“As the Federal Reserve is guided in its mandate from Congress to promote maximum employment and stable prices, we are pleased to see your efforts to provide assistance to our nation’s small- and midsized businesses, including many of our members, through the Main Street Lending Program.
“IPAA hopes that you are able to implement this program in a manner that recognizes the critical importance of the energy exploration and production businesses and the variance within the industry regarding financing needs. To that end, IPAA would like to provide input to ensure the program is effective in its support for the economy….
“As currently drafted, the Main Street New Loan Facility contains a key provision that may prevent independent natural gas and oil producers from using these facilities to meet their critical economic needs:
‘The Eligible Borrower must commit to refrain from using the proceeds of the Eligible Loan to repay other loan balances. The Eligible Borrower must commit to refrain from repaying other debt of equal or lower priority, with the exception of mandatory principal payments, unless the Eligible Borrower has first repaid the Eligible Loan in full.’
“IPAA asks that you consider providing flexibility on this provision to otherwise Eligible Borrowers, such as independent producers. Just as the American independent producer has revitalized the country after previous economic hardships, the industry will be essential to restarting our economy after the COVID-19 pandemic has passed…”
