Fed Expands Loan Program To Include Local Governments
The Federal Reserve has extended its loan program to cities and counties. This could help property taxpayers who have lost work due to coronavirus shutdowns.
The Federal Reserve typically avoids the municipal bond market. When it first offered coronavirus loans to local governments, only some two dozen cities and counties were eligible. Now 200 can participate, including both Suffolk and Nassau Counties. Only the state of Connecticut can borrow, not any of the state’s local governments.
Both County Executives Steve Bellone and Lauran Curran petitioned Congress and the Fed to expand the program so they can join. Both counties hope to use the loans to offset property tax payments so residents can defer the county portion of their tax bill.
The Fed says the interest rate will be set at market rates. As of last week, the Fed has pumped more than $6 trillion into the economy. About $2 trillion more than during the 2008 financial crisis.
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