Title page

Contents

Highlights 2

Letter 6

Background 8

The Federal Reserve System and Emergency Lending Authority 8

Emergency Lending Facilities in Response to COVID-19 9

Federal Reserve Oversight of the Facilities 11

Federal Reserve Oversight Continues, and Reserve Banks Have Generally Implemented Previously Identified Enhancements 13

Federal Reserve Identified No Additional Opportunities to Enhance Processes and Controls 13

RBOPS Completed Its Review of Almost All Reserve Bank Actions to Enhance Processes and Controls 15

Actual and Expected Losses Are Limited to the Main Street Lending Program 15

Nearly Half of Main Street Loans Have Been Fully Repaid, but Losses Have Increased 16

Outstanding Main Street Loans Declined as More Borrowers Made Full Repayments 16

Delinquencies Have Fluctuated as Principal Payments Have Come Due and More Loans Have Been Charged Off 29

Agency Comments 32

Appendix I: Objectives, Scope, and Methodology 35

Appendix II: GAO Contact and Staff Acknowledgments 38

Table 1. Federal Reserve Facilities Established with CARES Act Funding 10

Table 2. Number and Dollar Amount of Outstanding Main Street Loans by Sector, as of August 2024 21

Table 3. Number and Dollar Amount of Fully Repaid Main Street Loans by Sector, as of August 2024 25

Table 4. Number and Dollar Amount of Main Street Loan Losses by Census Region, as of August 2024 28

Figure 1. Outstanding Assets of Federal Reserve Lending Facilities Supported by CARES Act Funding, June 2020-September 2024 11

Figure 2. Number of Outstanding Main Street Lending Program Loans, First Quarter 2021-Third Quarter 2024 17

Figure 3. Percent of Outstanding Main Street Loans by Business Size, as of August 2024 18

Figure 4. Outstanding Main Street Loans by Census Division, as of August 2024 19

Figure 5. Number of Fully Repaid Main Street Loans, First Quarter 2021-Third Quarter 2024 22

Figure 6. Percent of Fully Repaid Main Street Loans by Business Size, as of August 2024 23

Figure 7. Fully Repaid Main Street Loans by Census Division, as of August 2024 24

Figure 8. Number and Dollar Amount of Main Street Loan Losses, Second Quarter 2021-Third Quarter 2024 26

Figure 9. Percent of Main Street Loans with Losses by Loan Size, as of August 2024 27

Figure 10. Percent of Main Street Loans with Losses by Business Size, as of August 2024 28

Figure 11. Number of Active Main Street Delinquencies, Fourth Quarter 2021-Third Quarter 2024 30

Figure 12. Main Street Charge-Off and Delinquency Rates, First Quarter 2021-Third Quarter 2024 31