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CARES ACT

As of 3.30.2020

On March 27, 2020, Congress approved, and the President signed, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to provide financial assistance to individuals and businesses affected by the virus.


Small business and non-profits

Under the Act, $349 billion is available to assist small business organizations including nonprofits, qualified veteran organizations and certain Tribal business concerns employing fewer than 500 employees. Loans are made through SBA-qualified bank lenders. The Act expands the Small Business Administration (SBA) authority through Paycheck Protection Program* loans.


Larger Businesses

The CARES Act authorizes the Department of the Treasury to provide additional support through Federal Reserve lending programs. Though details are not yet announced, the Treasury is required to endeavor to seek the implementation of a Federal Reserve lending program that targets U.S.-eligible businesses (and, to the extent practicable, nonprofit organizations) with between 500 and 10,000 employees. The CARES Act also suggests that the Federal Reserve may establish a Main Street Business Lending Program or facility that supports lending to small and mid-size businesses on such terms and conditions that are consistent with its authority under the Federal Reserve Act.


Checking Account Protection

The CARES ACT also authorizes the FDIC to re-implement the transaction account guarantee program, subject to a cap on amounts insured, which is presumed to be much greater than the current FDIC $250,000 amount. During the 2008 financial crisis, the FDIC provided unlimited insurance for amounts held in noninterest-bearing transaction accounts (i.e. checking accounts that don’t pay interest). The Dodd-Frank Act prohibited the FDIC from ever providing that again. The CARES Act authorizes the FDIC to reinstate the program through December 31, 2020. The current draft of legislation limits coverage to “a maximum amount” without specifying a number. Effectiveness will require FDIC action. Since its formation, no depositor has lost a penny of FDIC-insured funds which is backed by the Full Faith and Credit of the US Government.


Resources about the CARES Act

US Chamber of Commerce Guides


House Small Business Committee


National Law Review


Other Legal Guides

McGill Law

Baker Donelson

Gibson Dunn

Pillsbury Law

Venable


We are participating in the Paycheck Protection Program Loans

Click here to learn more about the Economic Injury Disaster Loan Program (EIDL)