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WASHINGTON – The Federal Reserve announced new rules on Thursday for its “Main Street Lending Program” designed to help small and mid-sized businesses during the novel coronavirus (COVID-19) crisis. The rule changes allow both larger companies and those carrying more debt to qualify, potentially exposing taxpayers’ money to more risk. The changes also create an opportunity for oil and gas companies to access government assistance.
In response, U.S. PIRG Tax and Budget advocate R.J. Cross and Environment America’s Director of the Campaign for 100% Renewable Energy Emma Searson released the following statement:
“Oil and gas drillers were in dire financial straits well before COVID-19 struck. Since Congress rejected a direct fossil fuel industry bailout in the CARES Act, the industry has been pushing to tweak the rules to gain access to credit from the Federal Reserve.
“Thursday’s announcement from the Federal Reserve appears to open the door for companies pushing outdated and polluting fossil fuels to access emergency taxpayer-backed loans through the central bank’s Main Street program.
“Today’s move raises important and troubling questions. Why should we put more taxpayer dollars at risk for larger loans to riskier firms? Why throw a lifeline to polluters, especially in the middle of a public health crisis exacerbated by air pollution? And why should the federal government feel compelled to come to the rescue of an industry that is neither environmentally nor economically sustainable?
“We have called for greater transparency and accountability in the Federal Reserve’s emergency lending programs. Today’s announcement underscores the need for that transparency and accountability. It should also lead all Americans to question the wisdom of bailing out an industry whose destruction of the environment will haunt us long after the current health and financial crises are over.”
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