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MEMORANDUM
DATE:
April 14, 2021
TO:
Mark E. Van Der Weide
General Counsel
Board of Governors of the Federal Reserve System
FROM:
Khalid Hasan
Senior OIG Manager for Information Technology
Office of Information Technology
SUBJECT:
Results of Analytical Testing of the Board’s Publicly Reported Data for the Main Street
Lending Program
Executive Summary
We are issuing this memorandum to document inaccuracies that we identified in the Board of Governors
of the Federal Reserve System’s publicly reported transaction disclosure data for the Main Street Lending
Program (MSLP). Specifically, we identified several inaccurate city and state data points affecting a limited
number of published loan transactions for the MSLP. We identified these inaccuracies during the survey
phase of our ongoing evaluation of third-party cybersecurity risk management processes for vendors
supporting the MSLP and the Secondary Market Corporate Credit Facility (SMCCF). After informing Board
and Federal Reserve System officials of these inaccuracies, they took immediate steps to address them
and update the Board’s public reporting.1
Our final report for this evaluation may include recommendations related to the issues described in this
memorandum. This memorandum is provided for informational purposes, and a response is not required.
Background
In response to the economic effects of the COVID-19 pandemic, the Board established several emergency
lending programs and facilities to provide loans to employers, certain businesses, and communities across
1 The Board published corrections to the majority of these inaccuracies in its periodic report to Congress dated March 11, 2021.
This report can be found at https://www.federalreserve.gov/publications/files/pdcf-mmlf-cpff-pmccf-smccf-talf-mlf-ppplf-msnlf-
mself-msplf-nonlf-noelf-03-11-21.pdf#page=8. Board officials informed us that the remaining inaccuracies would be corrected in
the report dated April 9, 2021.
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the country to support the U.S. economy.2 The Coronavirus Aid, Relief, and Economic Security (CARES) Act
authorizes the U.S. Department of the Treasury to invest in these facilities established by the Board.
Further, section 4026 of the CARES Act mandates the public reporting of information about the
government’s pandemic response. Specifically, this section requires the Board to provide reports to
Congress on outstanding loan and guarantee programs every 30 days, among other things.3 These reports
are to be publicly released within 7 days of delivery to Congress.4 To meet CARES Act reporting
requirements, the Board provides periodic updates on each of the lending facilities, including the MSLP,
established under section 13(3) of the Federal Reserve Act at least every 30 days.
Main Street Lending Program
The Board established the MSLP to support lending to small and medium-sized for-profit businesses and
nonprofit organizations across the United States. A key purpose of the MSLP, which terminated on
January 8, 2021, was to provide additional credit to assist companies that were in sound financial
condition prior to the onset of the COVID-19 pandemic in maintaining their operations and payroll until
conditions normalize. Specifically, the Board designed the MSLP to support small and medium-sized
businesses that were unable to access the Paycheck Protection Program (PPP) or that required additional
financial support after receiving a PPP loan.
The Federal Reserve Bank of Boston (FRB Boston) administers the MSLP and established a special purpose
vehicle to purchase loan participations from eligible lenders across the United States. The MSLP operated
through five facilities:
•
Main Street New Loan Facility (MSNLF). The MSNLF was established on April 8, 2020, to facilitate
lending to small and medium-sized for-profit businesses by eligible lenders. These lenders would
extend new 5-year term loans ranging in size from $100,000 to $35 million to eligible borrowers.
•
Main Street Expanded Loan Facility (MSELF). The MSELF was established on April 8, 2020, to
facilitate lending to small and medium-sized for-profit businesses by eligible lenders. These
lenders would increase, or upsize, an eligible borrower’s existing term loan or revolving credit
facility. The upsized tranche is a 5-year term loan ranging in size from $10 million to $300 million.
•
Main Street Priority Loan Facility (MSPLF). The MSPLF was established on April 30, 2020, to
facilitate lending to small and medium-sized for-profit businesses by eligible lenders. These
lenders would extend new 5-year loans ranging in size from $100,000 to $50 million to eligible
borrowers.
•
Nonprofit Organization New Loan Facility (NONLF). The NONLF was established on July 16, 2020,
to facilitate lending to nonprofit organizations by eligible lenders. These lenders would extend
new 5-year term loans ranging in size from $100,000 to $35 million to eligible borrowers.
2 The Board established these emergency lending facilities under section 13(3) of the Federal Reserve Act (12 U.S.C. § 343).
3 Section 4026 of the CARES Act requires the Board to submit reports on any programs or facilities it establishes to the Senate
Committee on Banking, Housing and Urban Affairs and the House Financial Services Committee.
4 These public reports can be found at https://www.federalreserve.gov/monetarypolicy/mainstreetlending.htm.
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•
Nonprofit Organization Expanded Loan Facility (NOELF). The NOELF was established on July 16,
2020, to facilitate lending to nonprofit organizations by eligible lenders. These lenders would
increase, or upsize, an eligible borrower’s existing term loan or revolving credit facility. The
upsized tranche is a 5-year term loan ranging in size from $10 million to $300 million.
Objectives, Scope, and Methodology
In February 2021, we announced an evaluation of third-party cybersecurity risk management processes
for vendors supporting the MSLP and the SMCCF. As part of our objective, we plan to evaluate the risk
management processes designed to ensure that effective information security and data integrity controls
are implemented by the third parties supporting the administration of the MSLP and SMCCF. We are
currently conducting survey work to solidify our objectives, scope, and methodology.
As part of our ongoing planning work, we reviewed the February 2021 periodic report provided to
Congress detailing updates on each of the Board’s established lending facilities, as of January 31, 2021. In
addition, we reviewed the February 2021 transaction-specific disclosures for applicable lending facilities,
as available.5 For the MSLP, we used an analytics and visualization tool to perform data accuracy and
completeness checks of specific demographic data to identify invalid city-state combinations. Further, we
compared the MSLP transaction disclosure data to other publicly available data sets to determine
whether there were any inaccuracies. We followed up on any locations that were either not recognized
by the data visualization tool or did not align with publicly available data sources. In addition, we met with
relevant Board and FRB Boston officials to discuss the identified inaccuracies.
Demographic Data Inaccuracies in the Board’s Publicly
Reported Transaction Disclosure Data for the MSLP
We found inaccurate city and state data points that were published in the transaction-specific disclosures
for the MSLP. Specifically, within the MSLP transaction disclosures, we identified 43 inaccurate borrower
city or state data points affecting 45 of the 1,830 published loan transactions6 (approximately
2.5 percent). We noted three main types of inaccuracies for this information: (1) invalid city-state
combinations (for example, New York, DC), (2) misspellings, and (3) inaccuracies based on OIG research
and analysis. Full details on the identified data inaccuracies are available in the attachment to this
memorandum.
After notifying Board and FRB Boston officials of these data inaccuracies, they initiated a review to
determine whether any other discrepancies existed within the publicly reported MSLP data. In addition,
these officials informed us that 33 of the MSLP inaccuracies were the result of either lender error or a
configuration limitation for one of the systems involved in loan data entry (this system has a 15-character
limit in the city field). Another 7 MSLP inaccuracies were confirmed to be errors originating from manual
intervention by FRB Boston personnel. FRB Boston officials informed us this was due to the highly manual
5 Transaction-specific disclosures were published on the Board’s public website for the Term Asset-Backed Securities Loan
Facility, the SMCCF, the Municipal Liquidity Fund, the PPP Liquidity Facility, the MSELF, the MSNLF, the MSPLF, and the NONLF.
6 In two instances, two separate MSLP transactions had the same city or state data point inaccuracies.
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process during the initial reporting phase and multiborrower inputs that resulted in human error. In the
Board’s latest periodic report to Congress, dated March 11, 2021, we noted that the agency had
corrected the majority of inaccuracies that we identified.7 FRB Boston is still working to confirm and
correct the remaining inaccuracies. We plan to follow up on these actions as part of our ongoing
evaluation.
Ensuring the accuracy of publicly reported lending programs and facilities data, including MSLP data, will
provide the Board with greater assurance that it is meeting the needs of the public and Congress. We are
not issuing formal recommendations in this memorandum. As part of our ongoing evaluation, we intend
to further evaluate the controls in place for the systems and processes involved in the reporting of MSLP
and SMCCF data.
Closing
We are reporting these data inaccuracies prior to the completion of our evaluation so that you can take
any additional corrective actions on the Board’s public reporting under the CARES Act that may be
needed. A formal response to this memorandum is not required. Our associated evaluation report may
include recommendations related to the issues described in this memorandum.
We appreciate the cooperation we received from Board and FRB Boston officials during this review. If you
have any questions concerning the matters discussed in this memorandum, please contact Paul Vaclavik,
OIG manager for information technology, or me.
Attachment
cc:
Patrick J. McClanahan
Sharon Mowry
Matthew Eichner
Andreas Lehnert
Larry Mize
Timothy Kirby
Steve Bowne
Sarah Podrygula
Steffanie Brady
Christine Docherty
Joe Lynch
Sandy Costa
Erin Boland
Alicia Grasfeder
Daniel Hartman
7 In the March 11, 2021, report, 36 of the 45 transactions we identified as potentially containing inaccurate city or state data
points had been corrected, as was 1 additional inaccuracy identified as a part of FRB Boston’s full review. FRB Boston officials
informed us that 5 of the transactions we identified did not require a change based on the information that was available. The
periodic report contained a note disclosing the nature of the updates that were made. Board officials informed us that the
remaining inaccuracies would be corrected in the report dated April 9, 2021.
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Attachment
Additional Details
Table 1 details the data inaccuracies identified for the MSLP described in this memorandum. Specifically,
the table details the inaccurate borrower city-state data points that were identified within the publicly
reported MSLP transaction disclosures.
Table 1. Inaccurate Borrower City-State Data Points for Publicly Reported Transaction Disclosures for the
MSLP
Facility
Borrower namea
Borrower city
Borrower state
Type of error
OIG analysisb
MSELF
Finley Production Co LP
Fox Worth
TX
Misspelling
Fort Worth, TX
MSNLF
Four Queens, LLC
Las Vegas
2. WA
Invalid city-state
combination
Las Vegas, NV
MSNLF
A L Silencer Inc.
Nebraska
NE
Invalid city-state
combination
Stapleton, NE
MSNLF
SuperStar Holdings, Inc.
New York
WY
Invalid city-state
combination
New York, NY
MSNLF
Sparks Marking Group,
Inc.
Pennsylvania
PA
Invalid city-state
combination
Philadelphia, PA
MSNLF
Freedom Solar LLC
Texas
TX
Invalid city-state
combination
Austin, TX
MSNLF
Micronoc Incorporated
Rancho
Cucamong
CA
Misspelling
Rancho
Cucamonga, CA
MSNLF
Royal Paper Corporation
Santa Fe Spring
CA
Misspelling
Santa Fe Springs,
CA
MSNLF
U.S. Construction Corp.
Virginia Garden
FL
Misspelling
Virginia Gardens,
FL
MSNLF
1. World Travel Group
Inc.
Mooachie
NJ
Misspelling
Moonachie, NJ
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Facility
Borrower namea
Borrower city
Borrower state
Type of error
OIG analysisb
2. Central Holidays Inc.
3. Travel Auto
International Inc.
MSNLF
1. 1st All Data Recovery,
LLC
2. I & D Belkin, LLC
3. 1st All File Recovery
USA, Inc.
Warrensville
OH
Misspelling
Warrensville
Heights, OH
MSPLF
T.O. CW, LLC
California
CA
Invalid city-state
combination
Thousand Oaks,
CA
MSPLF
Aqueos Corporation
Houston
CA
Invalid city-state
combination
Unknownc
MSPLF
The Brunswick School of
Jersey City Limited
Liability Company
Jersey City
FL
Invalid city-state
combination
Jersey City, NJ
MSPLF
1. Preferred Networks
Inc.
2. Pathfinders USA Inc.
Lake Tahoe
NV
Invalid city-state
combination
1. Yerington, NV
2. Winnemucca,
NV
MSPLF
Bisnow, LLC
New York
DC
Invalid city-state
combination
New York, NY
MSPLF
New Dominion, LLC
Oklahoma
OK
Invalid city-state
combination
Unknownd
MSPLF
Discovery Builders
Tennessee, LLC
Scottsdale
DE
Invalid city-state
combination
Scottsdale, AZ
MSPLF
North Star HVAC, LLC
St. Louis
UT
Invalid city-state
combination
Ogden, UT
MSPLF
1. Frank Martz Coach
Company
Tuxedo
MA
Invalid city-state
combination
Tuxedo, MD
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Facility
Borrower namea
Borrower city
Borrower state
Type of error
OIG analysisb
2. National Coach
Works, Inc.
3. Gold Line, Inc.
4. National Coach
Works, Inc. of VA
5. Gold Line, Inc. of VA
6. FH Family, L.P.
7. FMH Leasing
8. First Class Coach
Company, Inc.
MSPLF
Milestone Electric, Inc.
Garland
LA
Invalid city-state
combination
Garland, TX
MSPLF
Blue Road LLC
Bay Harbor
FL
Invalid city-state
combination
Bay Harbor
Islands, FL
MSPLF
Super C Group, LLC
Bloomfield Hill
MI
Misspelling
Bloomfield Hills,
MI
MSPLF
Northwoods
Entertainment LLC
Bloomfield Hill
MI
Misspelling
Bloomfield Hills,
MI
MSPLF
Machine Build
Technologies LLC
Colorado Spring
CO
Misspelling
Colorado Springs,
CO
MSPLF
West Boynton Auto
Services Inc D/B/A
Hagen Ranch Shell
Coconut Greek
FL
Misspelling
Coconut Creek, FL
MSPLF
1. Northland Restaurant
Group, LLC
2. Northland Investors,
LLC
3. Northland
Investments, LLC
Eau Clarie
WI
Misspelling
Eau Claire, WI
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Facility
Borrower namea
Borrower city
Borrower state
Type of error
OIG analysisb
4. UP North, LLC
MSPLF
Cinch Energy Services
LLC
Granada
TX
Misspelling
Ganado, TX
MSPLF
Skyport Hospitality, LLLP
Greenwood
Villa
CO
Misspelling
Greenwood
Village, CO
MSPLF
Gretna Sports Bar, Inc.
Metaire
LA
Misspelling
Metairie, LA
MSPLF
SeaTec Consulting Inc.
Norcoss
GA
Misspelling
Norcross, GA
MSPLF
M10 Motors, LLC
North Olmstead
OH
Misspelling
North Olmsted,
OH
MSPLF
DiLorenzo Operating
Entity Holding Co., LLC
Porstmouth
NH
Misspelling
Portsmouth, NH
MSPLF
1. Flat Creek Excavating,
LLC
2. Ozark Mountain
Crushing & Screening,
LLC
Reed Springs
MO
Misspelling
Reeds Spring, MO
MSPLF
L Tech Network
Services, Inc.
Santa Fe Spring
CA
Misspelling
Santa Fe Springs,
CA
MSPLF
Georgia Theatre
Company-II
St Simons Islan
GA
Misspelling
St. Simons Island,
GA
MSPLF
Redwood Investment
Management, LLC
Scottdale
AZ
Misspelling
Scottsdale, AZ
MSPLF
TLT Trucking, LLC
Stateboro
GA
Misspelling
Statesboro, GA
MSPLF
Gumps, LLC
Las Vegas
NV
Inaccurate based
on OIG research
and analysis
San Francisco, CA
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Facility
Borrower namea
Borrower city
Borrower state
Type of error
OIG analysisb
MSPLF
Mayorga Organics LLC
St. Petersburg
FL
Inaccurate based
on OIG research
and analysis
Rockville, MD
MSNLF
Indiana Center for
Recovery LLC
Wilmington
DE
Inaccurate based
on OIG research
and analysis
Bloomington, INe
MSPLF
Parkway Dental Services
LLC
Hudson
FL
Inaccurate based
on OIG research
and analysis
Pennsauken, NJ
MSPLF
Hatch Stamping
Company LLC
Southlake
TX
Inaccurate based
on OIG research
and analysis
Chelsea, MI
MSPLF
CL2 Orlando, LLC
Miami Beach
FL
Inaccurate based
on OIG research
and analysis
Kissimmee, FL
MSPLF
T-12 Three, LLC
Newport Beach
CA
Inaccurate based
on OIG research
and analysis
San Diego, CA
Source: OIG analysis of publicly reported MSLP loan transaction data.
a Instances in which multiple borrower names are listed for a single row indicate that those loans had multiple coborrowers.
b Based on our analysis and independent research of the MSLP borrower names, we attempted to identify the most likely correct
city-state combination. Board officials should confirm this information as part of the corrective actions taken.
c Based on our analysis and independent research of the Aqueos Corporation, we identified three potential locations in Santa
Barbara, CA; Carpinteria, CA; or Ventura, CA.
d Based on our analysis and independent research of New Dominion, LLC, we identified two potential locations in Seminole, OK,
and Tulsa, OK.
e FRB Boston’s analysis determined the correct location for this borrower to be West Palm Beach, FL.