Banking and Finance Law Daily Senate letters call on Mnuchin, Fed to ensure widespread distribution of CARES relief
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Wednesday, April 8, 2020

Senate letters call on Mnuchin, Fed to ensure widespread distribution of CARES relief

By Jacob Bielanski

In separate letters sent April 7, Democrats asked the Treasury to establish programs to get individual payments to the homeless and eligible, non-tax-filing citizens, while Republicans sought to avoid "company bias" in how emergency loans were provided to different industries.

The U.S. Treasury fielded separate concerns about relief fund administration under the Coronavirus Aid, Relief and Economic Security Act (CARES Act) from groups of Senate Democrats and Republicans in letters dated April 7.

Over two dozen Democratic senators asked Treasury Secretary Steven Mnuchin to make sure homeless citizens received individual payments authorized under CARES, while a group of 17 Republican senators asked both Mnuchin and the Federal Reserve Chair Jerome Powell that emergency funds be dispersed "free of company bias."

The Republican letter included concerns that groups, unnamed by letter authors, had already lobbied the Treasury to exclude "certain sectors of the economy" from CARES authorized loans. Letter authors noted that industry assistance under CARES was intended to be both "broad and flexible."

"Acquiescing to [outside demands] would be contrary to Congressional intent and would arbitrarily harm certain American workers," the letter, spearheaded by Sen. Kevin Cramer (R-ND), said.

Republicans also expressed concern over potential bias within the private companies engaged by the Treasury in the bond-purchasing aspects of the CARES Act. Senators said they were "reassured" that an initial agreement with BlackRock Financial Markets Advisory required stringent adherence to conflict of interest policies, as well as requiring BlackRock staff assigned to the CARES work to be precluded from any other company efforts. "This policy should apply to all private entities that are utilized in the execution of provisions of the CARES Act," the letter said.

Democrats, meanwhile, asked the Treasury to ensure individual payments of $1200 under the CARES act would be made to U.S. citizens lacking a permanent address or bank account, particularly the homeless. Citing a March report from the National Alliance to End Homelessness, senators argued that dense conditions in homeless communities and emergency shelters, combined with lack of access to hygiene facilities and health care, risked making homeless communities a point of "rapid transmission" for the COVID-19, or coronavirus, outbreak. Senators asked the Treasury to develop a system of dispersing payments to Americans without a bank account or permanent address, urging them to work with local and national homelessness advocates to identify recipients.

"People experiencing homelessness are among those most in need of the economic relief payments, but also are among the groups of individuals facing the biggest impediments to accessing those funds," the letter, spearheaded by Sen. Tina Smith (D-MN), said.

In addition to the homeless, Senate Democrats also urged the Treasury to expand automatic payments to include those who do not file income tax returns but still receive other government benefits, such as Supplemental Security Income (SSI) and Medicaid.

Sen. Smith’s letter was co-signed by 26 other Senators, all Democrats. Sixteen other Senate Republicans lent their signature to Sen. Cramer’s letter.

Both Cramer and Smith serve on the Senate Banking Committee.

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