Federal Reserve Lending Programs: Nearly Half of Main Street Program Loans Are Fully Repaid — GAO-25-107246
Summary
GAO-25-107246, a December 2024 report to congressional committees from the United States Government Accountability Office, is titled Federal Reserve Lending Programs: Nearly Half of Main Street Program Loans Are Fully Repaid, but Losses Have Increased. The highlights say the Board of Governors of the Federal Reserve System authorized 13 emergency lending programs in response to the COVID-19 pandemic. They say that, of the 1,830 loans made, 850 (or almost half) had been fully repaid as of August 31, 2024, under the Main Street Lending Program. They also say that, as of the end of fiscal year 2024, four of the facilities continued to hold significant outstanding assets and loans of approximately $4.7 billion.
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“Federal Reserve Lending Programs: Nearly Half of Main Street Program Loans Are Fully Repaid — GAO-25-107246.”
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United States Government Accountability Office
Report to Congressional Committees
FEDERAL RESERVE
December 2024
LENDING
PROGRAMS
Nearly Half of Main
Street Program Loans
Are Fully Repaid, but
Losses Have
Increased
GAO-25-107246
December 2024
FEDERAL RESERVE LENDING PROGRAMS
Nearly Half of Main Street Program Loans Are Fully
Repaid, but Losses Have Increased
Highlights of GAO-25-107246, a report to
congressional committees
Why GAO Did This Study What GAO Found
As of the end of fiscal year 2024, four In response to the COVID-19 pandemic, the Board of Governors of the Federal
of the Federal Reserve’s 13 lending Reserve System authorized 13 emergency lending programs—known as
facilities, all part of the Main Street facilities—to ensure the flow of credit across the economy. To improve oversight
Lending Program, continued to hold of these programs, the Federal Reserve issued seven reports from December
significant outstanding assets and 2020 through June 2024 that evaluated its internal processes and controls, such
loans. These facilities had as for risk management and cybersecurity. These reports identified 20
approximately $4.7 billion in opportunities to enhance internal controls. GAO found that Federal Reserve
outstanding assets and loans, which Banks, which manage the facilities, have fully addressed 19 of the 20
will not mature until July 2025 or later.
opportunities. The remaining opportunity, which relates to a facility’s evaluation
About $10.4 billion in collateral was
model that monitors loans’ credit quality, is currently under review. GAO also
pledged to secure the loans. The four
facilities were among the nine that found that the Federal Reserve’s plans for ongoing monitoring of the facilities are
received funds appropriated through generally aligned with federal internal control standards.
the CARES Act (section 4003). The The five facilities under the Main Street Lending Program targeted small and
Federal Reserve is required to monitor midsize businesses and nonprofits. Of the 1,830 loans made through this
and report on the status of the facilities program, 850 (or almost half) had been fully repaid as of August 31, 2024, the
until they no longer hold outstanding most recent data available. Further, 138 loans (or about 8 percent) had recorded
assets or loans.
a total of about $969 million in losses, a significant increase (about $781 million)
year-over-year. About 46 percent (or 847 loans) remained outstanding. The
The CARES Act includes a provision
for GAO to annually report on section
program had collected about $1.89 billion in interest payments.
4003 loans, loan guarantees, and Main Street Lending Program Loans, First Quarter 2021–Third Quarter 2024
investments. This report examines (1)
the Federal Reserve’s oversight and
monitoring of the CARES Act facilities
and (2) the status and performance of
Main Street Lending Program loans.
GAO reviewed Federal Reserve
documentation, conducted loan-level
analysis of Main Street Lending
Program loan performance covering
July 2020 through August 2024, and
interviewed Federal Reserve officials. Note: Numbers may not add to the total number of loans due to varying loan statuses.
Loans to larger businesses have generally performed better than those to smaller
ones. For example, businesses with annual revenues over $42.1 million at loan
origination accounted for the largest share of repaid loans. In contrast, smaller
businesses (annual revenues of $3.1 million or less) experienced higher rates of
delinquencies and losses. Businesses in the construction sector have repaid a
smaller proportion of loans and experienced higher delinquency rates compared
with other sectors, such as the leisure and hospitality sector.
The higher rates of delinquencies and losses partly reflect the effects of higher
interest payments and the 15 percent of each loan’s principal that came due for
borrowers in the second half of 2023. Interest rates higher than those at loan
origination have increased borrowers’ payments, potentially creating financial
View GAO-25-107246. For more information, strain for businesses. Another 15 percent of each loan’s principal came due
contact Michael E. Clements at (202) 512-
8678 or ClementsM@gao.gov. during 2024, and a balloon payment of the remaining 70 percent will come due
beginning mid-2025, potentially further affecting loan performance.
United States Government Accountability Office
Contents
Letter 1
Background 3
Federal Reserve Oversight Continues, and Reserve Banks Have
Generally Implemented Previously Identified Enhancements 8
Nearly Half of Main Street Loans Have Been Fully Repaid, but
Losses Have Increased 11
Agency Comments 27
Appendix I Objectives, Scope, and Methodology 30
Appendix II GAO Contact and Staff Acknowledgments 33
Tables
Table 1: Federal Reserve Facilities Established with CARES Act
Funding 5
Table 2: Number and Dollar Amount of Outstanding Main Street
Loans by Sector, as of August 2024 16
Table 3: Number and Dollar Amount of Fully Repaid Main Street
Loans by Sector, as of August 2024 20
Table 4: Number and Dollar Amount of Main Street Loan Losses
by Census Region, as of August 2024 23
Figures
Figure 1: Outstanding Assets of Federal Reserve Lending
Facilities Supported by CARES Act Funding, June 2020–
September 2024 6
Figure 2: Number of Outstanding Main Street Lending Program
Loans, First Quarter 2021–Third Quarter 2024 12
Figure 3: Percent of Outstanding Main Street Loans by Business
Size, as of August 2024 13
Figure 4: Outstanding Main Street Loans by Census Division, as
of August 2024 14
Figure 5: Number of Fully Repaid Main Street Loans, First Quarter
2021–Third Quarter 2024 17
Figure 6: Percent of Fully Repaid Main Street Loans by Business
Size, as of August 2024 18
Page i GAO-25-107246 Federal Reserve Facilities
Figure 7: Fully Repaid Main Street Loans by Census Division, as
of August 2024 19
Figure 8: Number and Dollar Amount of Main Street Loan Losses,
Second Quarter 2021–Third Quarter 2024 21
Figure 9: Percent of Main Street Loans with Losses by Loan Size,
as of August 2024 22
Figure 10: Percent of Main Street Loans with Losses by Business
Size, as of August 2024 23
Figure 11: Number of Active Main Street Delinquencies, Fourth
Quarter 2021–Third Quarter 2024 25
Figure 12: Main Street Charge-Off and Delinquency Rates, First
Quarter 2021–Third Quarter 2024 26
Page ii GAO-25-107246 Federal Reserve Facilities
Abbreviations
NAICS North American Industry Classification System
RBOPS Division of Reserve Bank Operations and Payment
Systems
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Page iii GAO-25-107246 Federal Reserve Facilities
Letter
441 G St. N.W.
Washington, DC 20548
December 19, 2024
Congressional Committees
In response to the economic effects of the COVID-19 pandemic, in 2020,
the Board of Governors of the Federal Reserve System authorized 13
emergency lending programs, known as facilities. These facilities were
intended to support the flow of credit to employers, consumers, small and
midsize businesses, state and local governments, and nonprofit
organizations. 1 Nine of the 13 facilities received funds appropriated by the
CARES Act. 2
The CARES Act facilities ceased purchasing assets or extending credit by
January 8, 2021. Only the facilities under the Main Street Lending
Program, which targeted small and midsize businesses and nonprofits,
continue to hold substantial outstanding assets and loans. 3 As of
September 30, 2024, the program held about $4.7 billion in outstanding
assets and loans. 4 Main Street loans have a 5-year maturity, meaning
any currently outstanding loans will not mature until July 2025 or later.
Section 4026(f) of the CARES Act includes a provision for us to report
annually on the loans, loan guarantees, and other investments provided
1The facilities are authorized under section 13(3) of the Federal Reserve Act and
approved by the Secretary of the Treasury. Section 13(3) of the Federal Reserve Act
permits the Federal Reserve to provide emergency lending.
2To provide economic relief, section 4003(b)(4) of the CARES Act made available at least
$454 billion for the Department of the Treasury to support the Board of Governors of the
Federal Reserve System in establishing facilities. Pub. L. No. 116-136, § 4003(b)(4), 134
Stat. 281, 470 (2020). We refer to these facilities as CARES Act facilities.
3The Federal Reserve also established four emergency lending facilities that did not
receive CARES Act appropriations, which we refer to as non–CARES Act facilities,
intended to serve various markets and credit needs. On July 30, 2021, the last of the non–
CARES Act facilities stopped purchasing assets or extending credit.
4This amount includes Main Street loan participations at face value, net of an allowance
for credit losses updated as of September 30, 2024. As of September 30, 2024, about
$10.4 billion was held in collateral to secure the loans.
Page 1 GAO-25-107246 Federal Reserve Facilities
under section 4003 of the CARES Act. 5 This report examines (1) the
Federal Reserve’s oversight and monitoring of the CARES Act facilities
and (2) the status of Main Street loans and characteristics and trends in
loan performance.
To address the first objective, we analyzed documentation from the
Federal Reserve’s Division of Reserve Bank Operations and Payment
Systems (RBOPS). This included its procedures for CARES Act facilities,
planning documents, and summaries of its completed reviews. We also
compared RBOPS’s monitoring plans against selected federal internal
control standards. 6 Additionally, we reviewed the Federal Reserve’s
periodic reports and financial statements for updates on potential and
actual losses incurred by the facilities, and we received written responses
from Federal Reserve officials.
For the second objective, we conducted loan-level analysis of Main Street
Lending Program data as of the end of August 2024, the most recent data
available from the Federal Reserve Bank of Boston. To assess the
reliability of these data, we reviewed documentation, including the data
dictionary, for Main Street loan data and performed electronic testing on-
site for outliers, missing data, and erroneous values. We also gathered
information from Federal Reserve Bank of Boston officials about the
collection methodology. We determined the data were sufficiently reliable
for the purpose of describing the status and characteristics of Main Street
loans and their performance. A more detailed description of our
objectives, scope, and methodology can be found in appendix I.
5Specifically, we are to report no later than 9 months after the date of enactment of the
act, and annually thereafter through the year succeeding the last year for which loans,
loan guarantees, or other investments made under section 4003 are outstanding. Our
previous reports were GAO, Federal Reserve Lending Programs: Status of Monitoring and
Main Street Lending Program, GAO-24-106482 (Washington, D.C.: Dec. 22, 2023);
Federal Reserve Lending Programs: Risks Remain Low in Related Credit Markets, and
Main Street Loans Have Generally Performed Well, GAO-23-105629 (Washington, D.C.:
Dec. 19, 2022); Federal Reserve Lending Programs: Credit Markets Served by the
Programs Have Stabilized, but Vulnerabilities Remain, GAO-22-104640 (Washington,
D.C.: Oct. 19, 2021); and Federal Reserve Lending Programs: Use of CARES Act-
Supported Programs Has Been Limited and Flow of Credit Has Generally Improved,
GAO-21-180 (Washington, D.C.: Dec. 10, 2020). Additionally, we regularly issue
government-wide reports on the federal response to COVID-19, available at
https://www.gao.gov/coronavirus.
6GAO, Standards for Internal Control in the Federal Government, GAO-14-704G
(Washington, D.C.: September 2014).
Page 2 GAO-25-107246 Federal Reserve Facilities
We conducted this performance audit from December 2023 to December
2024 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit to
obtain sufficient, appropriate evidence to provide a reasonable basis for
our findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objectives.
Background
The Federal Reserve The Federal Reserve Act established the Federal Reserve System as the
System and Emergency country’s central bank. 7 The system consists of three parts: the Federal
Lending Authority Reserve Board, Reserve Banks, and the Federal Open Market
Committee. 8 The Federal Reserve Board is a federal agency located in
Washington, D.C., that oversees the operations of the Reserve Banks
and shares with them the responsibility for supervising and regulating
certain financial institutions and activities. The Federal Reserve System is
divided into 12 districts, and each district is served by a regional Reserve
Bank.
The Federal Reserve Board has the authority to authorize the Reserve
Banks to extend credit more broadly than usual during emergencies. 9
Specifically, under section 13(3) of the Federal Reserve Act, during
unusual and exigent circumstances, the Federal Reserve can authorize
Reserve Banks to extend credit to a broader range of borrowers. 10
7Federal Reserve Act, Pub. L. No. 63-43, 38 Stat. 251 (1913).
8The Federal Open Market Committee consists of the seven members of the Board of
Governors, the President of the Federal Reserve Bank of New York, and four other
Reserve Bank presidents who serve on a rotating basis. The committee is responsible for
directing open market operations to influence the total amount of money and credit
available in the economy.
9Reserve Banks typically lend to banks through discount window programs based on
established statutory criteria. 12 U.S.C. § 347b(a). The discount window is a Federal
Reserve Board lending program that allows eligible institutions to borrow money, usually
on a short-term basis, at an above-market rate to meet temporary liquidity shortages.
1012 U.S.C. § 343(3). During the 2007–2009 financial crisis, the Federal Reserve invoked
its section 13(3) authority to create emergency programs to stabilize financial markets and
avert the failures of a few individual institutions.
Page 3 GAO-25-107246 Federal Reserve Facilities
Emergency Lending In response to the economic disruptions caused by the COVID-19
Facilities in Response to pandemic, the CARES Act authorized at least $454 billion for the
Department of the Treasury to support the Federal Reserve in
COVID-19
establishing facilities to provide liquidity to the financial system. With the
Secretary of the Treasury’s approval, the Federal Reserve used its
authority under section 13(3) to authorize nine facilities using funds
appropriated by the CARES Act. 11 The Federal Reserve cited a number
of factors in determining that unusual and exigent circumstances existed.
These factors included disruption in the financial markets, reduced
availability of credit, a heightened need for credit, and an increase in
business expenditures.
In general, the CARES Act facilities were designed to address broad
sectors of the economy, such as large corporations, small and midsize
businesses, and state and local governments. Overall, the CARES Act
facilities could support up to $1.95 trillion in transaction volume, and
Treasury disbursed $102.5 billion in CARES Act funds to the support the
facilities. Of this total, as of September 30, 2024, the Federal Reserve
had returned about $97.5 billion to Treasury, leaving about $5 billion
available to cover any potential losses the facilities incur. In accordance
with the Consolidated Appropriations Act, 2021, all nine facilities stopped
purchasing assets or extending credit by January 2021. They conducted
a total of about $41 billion in transactions (see table 1). 12
11The Federal Reserve established 13 emergency lending facilities in response to the
COVID-19 pandemic. Four emergency lending facilities—the Commercial Paper Funding
Facility, Money Market Mutual Fund Liquidity Facility, Paycheck Protection Program
Liquidity Facility, and Primary Dealer Credit Facility—were non–CARES Act facilities,
which all stopped purchasing assets or extending credit by July 30, 2021. In March 2023,
the Federal Reserve established another emergency lending facility to boost operating
banks’ liquidity and minimize contagion after Silicon Valley Bank and Signature Bank
failed. The Bank Term Funding Program was established on March 12, 2023, and ceased
extending loans on March 11, 2024.
12For the Main Street Lending Program, the transaction amount refers to the Federal
Reserve’s participation in the Main Street loans, which is the purchase of 95 percent of
lenders’ authorized loan amount to eligible borrowers.
Page 4 GAO-25-107246 Federal Reserve Facilities
Table 1: Federal Reserve Facilities Established with CARES Act Funding
CARES Act–supported facilities Number Facility activity Termination date Transaction
of amount (in
facilities billions)
Primary Market Corporate Credit 2 Support large businesses by purchasing Dec. 31, 2020 $14.3a
Facility and Secondary Market qualifying corporate bonds and other eligible
Corporate Credit Facility assets
Main Street Lending Program 5b Support small and midsize for-profit businesses Jan. 8, 2021 $16.5c
and nonprofit organizations by purchasing
participations in eligible loans
Municipal Liquidity Facility 1 Support states, certain counties, municipalities, Dec. 31, 2020 $6.4
multistate entities, and revenue bond issuers
by purchasing eligible notes that these entities
issued
Term Asset-Backed Securities 1 Support consumers and businesses by Dec. 31, 2020 $3.7
Loan Facility providing nonrecourse loans to U.S. companies
secured by qualifying asset-backed securities
generally backed by recently originated
consumer and business loans
Source: GAO analysis of documents and data from the Board of Governors of the Federal Reserve System. | GAO-25-107246
aThe Primary Market Corporate Credit Facility did not conduct any transactions.
bThe Main Street Lending Program comprised five facilities: the Main Street New Loan Facility, Main
Street Priority Loan Facility, Main Street Expanded Loan Facility, Nonprofit Organization New Loan
Facility, and Nonprofit Organization Expanded Loan Facility.
cThe transaction amount refers to the Federal Reserve’s participation in Main Street Lending
Program loans, which is the purchase of 95 percent of lenders’ authorized loan amount to eligible
borrowers. The Nonprofit Organization Expanded Loan Facility did not conduct any transactions.
For the facilities that received CARES Act funds, outstanding assets
peaked between November 2020 and January 2021 (see fig. 1). As of
September 2024, only four of the Main Street Lending Program facilities
continued to hold assets. 13
13The Main Street Lending Program’s Nonprofit Organization Expanded Loan Facility did
not conduct any transactions.
Page 5 GAO-25-107246 Federal Reserve Facilities
Figure 1: Outstanding Assets of Federal Reserve Lending Facilities Supported by CARES Act Funding, June 2020–September
2024
Note: Since Feb. 24, 2021, the Main Street Lending Program’s outstanding assets have been reported net of an allowance for credit losses, which is
updated quarterly. The Main Street lending facilities purchased a participation interest in newly issued eligible loans that eligible lenders made to eligible
small and midsize for-profit borrowers and nonprofit organizations.
Federal Reserve The Federal Reserve’s Division of Reserve Bank Operations and
Oversight of the Facilities Payment Systems (RBOPS), which oversees the policies and operations
of the Reserve Banks, is primarily responsible for the oversight of the
facilities. RBOPS’s general framework for oversight consists of three
phases:
• Phase one. During its initial phase of oversight, RBOPS, through
communication with Reserve Bank staff, focused on providing
assistance in setting up the various facilities quickly.
• Phase two. As the facilities became operational, RBOPS reviewed
the facilities’ established governance structures, process workflows,
and internal control design. RBOPS conducted these reviews to assist
Reserve Banks in identifying any enhancements at an early point in
the life of the facilities and to obtain reasonable assurance that the
design of controls and processes was adequate to ensure the
Page 6 GAO-25-107246 Federal Reserve Facilities
facilities’ effective operation. RBOPS completed phase two reviews
for all facilities by December 2020.
• Phase three. The third phase consists of ongoing monitoring
activities. These include continued communication with Reserve Bank
management and periodic reviews of facility operations and controls
to obtain reasonable assurance that controls are present and are
functioning in a manner that addresses identified risks. According to
RBOPS documentation, phase three oversight activities will continue
throughout the life of the facilities, until they no longer hold
outstanding assets or loans.
As part of phase three, RBOPS prepares interim reports at 6-month
intervals, unless a change in timing is approved by the credit facilities’
oversight steering group and advisers. 14 These reports summarize the
scope of oversight activities and any enhancement opportunities related
to facility processes and controls. As of October 2024, RBOPS had
issued seven interim reports to Reserve Bank management
communicating the results of phase three reviews, cumulatively covering
December 2020 to June 2024.
As we previously reported, RBOPS has a process for determining
whether enhancement opportunities have been addressed. 15 RBOPS
officials said Reserve Bank staff notify RBOPS when they have
completed steps to address an enhancement opportunity. RBOPS then
analyzes the actions taken and determines whether the enhancement
opportunity has been addressed. According to RBOPS officials, this
analysis may include discussions with a Reserve Bank’s internal audit
team and management, walk-throughs with Reserve Bank staff to
understand new or updated processes, and reviews of documentation,
such as process flows and procedures.
As of February 2024, all of the CARES Act facilities, except those under
the Main Street Lending Program, had wound down all processes and
terminated operations.
14RBOPS’s organizational structure for phase three credit facility oversight consists of a
steering group and an adviser group that oversee the teams responsible for phase three
focus areas.
15GAO-24-106482.
Page 7 GAO-25-107246 Federal Reserve Facilities
Federal Reserve
Oversight Continues,
and Reserve Banks
Have Generally
Implemented
Previously Identified
Enhancements
Federal Reserve Identified RBOPS’s two most recent interim reports identified no additional
No Additional opportunities to enhance facilities’ processes and controls. These reports,
which were issued to the applicable Reserve Banks, covered 6-month
Opportunities to Enhance
periods from July 2023 to June 2024.
Processes and Controls
Consistent with our previous reporting, we found that RBOPS’s ongoing
monitoring of the facilities generally aligns with federal internal control
standards for monitoring of an entity’s internal control system. 16 According
to the standards, management should establish and operate monitoring
activities to monitor the internal control system and evaluate the results.
This includes ongoing monitoring of the design and operating
effectiveness of the internal control system as part of the normal course
of operations. Further, management should remediate identified internal
control deficiencies on a timely basis.
From July 2023 to June 2024, RBOPS continued to monitor facilities with
outstanding loans and to review progress toward implementing a
previously identified enhancement opportunity, discussed further below.
RBOPS communicated the results of its ongoing monitoring to facility
management teams at relevant Reserve Banks and the Federal Reserve
Board. As part of its phase three reviews, RBOPS conducts ongoing
follow-up and periodic reporting on facilities’ progress in incorporating the
remaining enhancement.
RBOPS last updated its overall monitoring approach in fiscal year 2023
and made no changes for fiscal year 2024. In early 2023, RBOPS
reassessed operation and risk factors to calibrate its oversight activities
for the year. RBOPS identified three overall focus areas for 2023: (1)
16See GAO-14-704G and GAO-24-106482.
Page 8 GAO-25-107246 Federal Reserve Facilities
collateral and asset management; (2) operations and controls; and (3)
cybersecurity, resiliency, and data management. The operations and
controls area was further divided into four subfocus areas: risk
management; vendor management; internal controls; and resources,
roles, and responsibilities.
RBOPS noted the following for each focus area:
• Collateral and asset management. RBOPS will continue to monitor
underlying collateral, such as by reviewing activities to understand
and evaluate whether the Reserve Banks’ approach ensures that the
emergency loans remain adequately collateralized and whether asset
management procedures are consistent with sound risk management
practices.
• Operations and controls. RBOPS will use the components of the
operations and controls function to obtain reasonable assurance that
controls are present and are functioning in a manner that addresses
evolving risks.
• Cybersecurity, resiliency, and data management. To strengthen
risk management practices, reduce cyber risks, and maintain
resiliency for the facilities, RBOPS will continue to oversee ongoing
operations and improvements to the cybersecurity programs through
various oversight activities. These oversight activities include regular
reviews, continuous monitoring, and other efforts to reduce risk and
improve the efficiency and effectiveness of information technology
operations.
According to RBOPS’s 2023 planning documentation, phase three
oversight will continue to take an adaptive approach, given the maturity of
the underlying assets and ongoing investments. Board staff are to consult
and coordinate ongoing oversight activities with Reserve Bank control
functions, such as risk management and internal audit, and with external
auditors. Additionally, RBOPS is to perform a risk assessment each year
to inform its planned oversight activities. Based on its ongoing
assessments, RBOPS determined that no changes were needed to its
monitoring approach for 2024.
Page 9 GAO-25-107246 Federal Reserve Facilities
RBOPS Completed Its As we previously reported, Reserve Banks have implemented processes
Review of Almost All to address all 20 opportunities for enhancing processes and controls
identified by RBOPS. 17 Of the 20 enhancement opportunities, RBOPS
Reserve Bank Actions to
has completed its review of 19. The remaining opportunity, which relates
Enhance Processes and to the validation of one facility’s credit evaluation model, is currently under
Controls review. 18
During 2023, RBOPS balanced its ongoing oversight of the CARES Act
facilities with other activities, including the Federal Reserve’s response to
2023 banking stress and the announcement and implementation of the
Bank Term Funding Program. According to RBOPS, review of the
remaining opportunity resumed in December 2023.
Actual and Expected As of September 30, 2024, the Main Street Lending Program facilities
Losses Are Limited to the were the only ones that had experienced losses. As of that date, the Main
Street facilities had recognized approximately $1.2 billion in actual credit
Main Street Lending
losses, net of subsequent recoveries, which we discuss in more detail
Program later in the report. This accounts for about 7 percent of the total
transaction amount the program conducted.
The Federal Reserve analyzes all of the outstanding CARES Act facilities
on a quarterly basis to determine if it is necessary to set aside an
allowance for potential losses. The evaluation of loan participations
purchased by the Main Street Lending Program, including those in
nonaccrual status, resulted in recording a credit loss allowance for the
Main Street Lending Program of $923 million as of June 30, 2024 (down
from $1.1 billion reported for the prior quarter). According to RBOPS, the
open opportunity for enhancement related to the credit valuation model is
unlikely to have any effect on the Main Street Lending Program’s portfolio
valuation, credit loss reserve calculation, or other processes.
17GAO-24-106482. The 20 opportunities identified include those related to the Paycheck
Protection Program Liquidity Facility, which is a non–CARES Act facility.
18The credit evaluation model is used to monitor the credit quality of loans purchased by
the facility.
Page 10 GAO-25-107246 Federal Reserve Facilities
As of the end of August 2024, about 46 percent of Main Street loans were
Nearly Half of Main outstanding, and about 46 percent had been fully repaid. However, about
Street Loans Have 8 percent of loans had been charged off (either partially or fully) by that
date, which may reflect borrowers’ first and second principal payments
Been Fully Repaid, coming due starting in July 2023 and July 2024, respectively. 19
but Losses Have Delinquencies have fluctuated over time, rising throughout most of the
program’s life cycle but falling in recent quarters as many delinquent
Increased loans were charged off.
Outstanding Main Street
Loans Declined as More
Borrowers Made Full
Repayments
Outstanding Loans Since the Main Street Lending Program terminated in January 2021, Main
Street borrowers generally have made regular and early (unscheduled)
payments, resulting in fewer outstanding loans than expected at this point
compared with the program’s repayment schedule. 20 As of August 31,
2024, 847 loans (or about 46 percent) of the 1,830 Main Street Lending
Program loans remained outstanding. This accounted for about $7.5
billion (or about 43 percent) of the total authorized loan amount. 21 The
number of outstanding loans has decreased steadily over time, as the
number of loans that have been fully repaid or charged off has increased
(see fig. 2). Across all loans, including those currently outstanding, the
program has collected $1.89 billion in interest payments. 22
19Banks charge off debts when they do not believe that a borrower will pay the amount
owed. That is, charge-offs are the value of loans that are removed from the books and
charged against loss reserves. However, because Main Street loans are recourse loans,
borrowers are still responsible for repaying that debt.
20Loans issued under the Main Street Lending Program are recourse loans and have a 5-
year maturity, meaning they are expected to be fully repaid 5 years after the date of
origination. As recourse loans, lenders can pursue the borrower’s assets in the event of
default.
21The total authorized amount is defined as the total amount eligible lenders have
extended to eligible borrowers.
22The amount of interest payments collected by the Main Street Lending Program relative
to losses cannot be used as a measure of the program’s profitability, as it does not
account for other program costs, such as those incurred for establishing and maintaining
the program throughout its life cycle.
Page 11 GAO-25-107246 Federal Reserve Facilities
Figure 2: Number of Outstanding Main Street Lending Program Loans, First Quarter 2021–Third Quarter 2024
Note: This figure reflects data through the end of August 2024, which only partially represents the third quarter of 2024. In addition, these counts reflect
the final count of outstanding Main Street loans at the end of a given quarter.
Distribution of outstanding loans by loan size. Since the Main Street
Lending Program terminated in January 2021, the distribution of
outstanding loans by loan size has generally aligned with the overall
distribution of Main Street loans made under the program. However, since
the fourth quarter of 2022, the smallest loans (valued at $1.2 million or
less) have constituted a slightly larger share of outstanding loans. As of
the end of August 2024, these smaller loans accounted for about 22
percent of outstanding loans, although they account for 20 percent of all
originated Main Street loans.
Distribution of outstanding loans by business size. As of the end of
August 2024, the distribution of outstanding loans had shifted slightly
toward smaller businesses, compared with the distribution of all Main
Street loans. Businesses with annual revenues of $7.7 million or less at
loan origination accounted for about 46 percent of outstanding loans,
whereas these businesses represented about 40 percent of all Main
Street borrowers.
Page 12 GAO-25-107246 Federal Reserve Facilities
In contrast, businesses with annual revenues exceeding $7.7 million
accounted for about 54 percent of outstanding loans but 60 percent of all
Main Street borrowers (see fig. 3). This distribution generally aligns with
our findings in 2023. 23 It may reflect the varying abilities of businesses of
different sizes to fully repay their loans in advance, which we discuss
further below.
Figure 3: Percent of Outstanding Main Street Loans by Business Size, as of August
2024
Note: Percentages may not sum to 100 percent due to rounding. In this figure, percentages are
rounded individually for graphical presentation.
aThis subtotal percentage does not equal the sum of the two percentages it represents due to
rounding of the individual categories.
Regional distribution of outstanding loans. The regional distribution of
outstanding loans generally aligned with the overall distribution of all Main
Street loans. As of the end of August 2024, most of the program’s
outstanding loans were in the southern United States, particularly in
census divisions 5 and 7 (South Atlantic and West South Central) (see
fig. 4). 24 This concentration is consistent with our findings in 2023. 25
23GAO-24-106482, 31.
24The Census Bureau divides the United States into a variety of geographies for analytical
purposes. Regions are the largest geographic unit, dividing the country into four major
areas, with U.S. territories (other than the District of Columbia) not represented in a formal
region. Divisions are the second largest geographic unit, dividing the country into nine
major areas. As with regions, U.S. territories (other than the District of Columbia) are not
represented in a formal division.
25GAO-24-106482, 27.
Page 13 GAO-25-107246 Federal Reserve Facilities
When comparing the proportion of outstanding loans across census
divisions, both the number and dollar amount of outstanding loans varied
considerably across different regions of the United States. Across all
census divisions, census division 4 (West North Central) had the highest
percentage of loans outstanding by number and dollar amount in a
division. In this division, 59 percent of loans remain outstanding by both
number and dollar amount. Conversely, division 1 (New England) had the
lowest percentage of loans outstanding by both number and dollar
amount.
Figure 4: Outstanding Main Street Loans by Census Division, as of August 2024
Page 14 GAO-25-107246 Federal Reserve Facilities
Sectoral distribution of outstanding loans. The sectoral distribution of
outstanding loans also generally aligned with the sectoral distribution of
all Main Street loans. About 73 percent of outstanding loans were in
service-providing sectors, while about 27 percent were in goods-
producing sectors. This distribution is consistent with our findings in
2023. 26
Businesses in service-providing sectors accounted for the largest share of
outstanding loans, both by number and dollar value. The top sectors were
(1) leisure and hospitality and (2) trade, transportation, and utilities.
However, the percentage of loans outstanding within each sector varied.
Businesses in construction—a goods-producing sector—had the greatest
percentage of loans outstanding by both number and dollar amount, with
58 percent outstanding by number and 62 percent outstanding by dollar
amount (see table 2). In contrast, loans to businesses in leisure and
hospitality had the smallest share outstanding based on the number of
loans. The “other services” sector had the smallest share based on dollar
amount. This sector includes industries not classified within the defined
service-providing sectors, such as personal and laundry services and
repair and maintenance.
26GAO-24-106482, 27–28.
Page 15 GAO-25-107246 Federal Reserve Facilities
Table 2: Number and Dollar Amount of Outstanding Main Street Loans by Sector, as of August 2024
Sector Number of outstanding loans Dollar amount outstanding, dollars in millions
(% of all loans in sector) (% of total loan amount in sector)
Service-providing sectors 621 (44.5%) $5,225 (40.0%)
Leisure and Hospitality 153 (39.7%) $1,262 (36.8%)
Trade, Transportation, and 146 (45.8%) $1,290 (40.8%)
Utilities
Professional and Business 121 (48.6%) $815 (37.3%)
Services
Financial Activities 93 (48.9%) $876 (46.2%)
Education and Health Services 43 (44.3%) $506 (44.2%)
Information 37 (40.2%) $360 (39.7%)
Other Services 28 (43.8%) $117 (33.2%)
(except Public Administration)
Goods-producing sectors 225 (52.0%) $2,263 (51.6%)
Construction 97 (58.4%) $696 (61.5%)
Manufacturing 76 (45.0%) $684 (40.0%)
Natural Resources and Mining 52 (53.1%) $883 (57.2%)
Source: GAO analysis of Federal Reserve Bank of Boston data. | GAO-25-107246
Fully Repaid Loans As of the end of August 2024, 850 loans (about 46 percent of all Main
Street loans) had been fully repaid. These loans accounted for about $8.8
billion (or about 51 percent) of the total authorized loan amount. These
totals reflect a year-over-year increase of 238 loans and about $2.8 billion
repaid since August 2023 (see fig. 5).
Page 16 GAO-25-107246 Federal Reserve Facilities
Figure 5: Number of Fully Repaid Main Street Loans, First Quarter 2021–Third Quarter 2024
Note: This figure reflects data through the end of August 2024, which only partially represents the third quarter of 2024.
Distribution of fully repaid loans by loan size. The distribution of fully
repaid loans by loan size generally aligned with the overall distribution of
loans made, as of the end of August 2024. The smallest loans (valued at
$1.2 million or less) accounted for about 18 percent of fully repaid loans,
while representing 20 percent of all Main Street loans. In contrast, the
largest loans (valued at more than $14.3 million) accounted for 22 percent
of fully repaid loans, while representing 20 percent of all Main Street
loans.
Distribution of fully repaid loans by business size. As of the end of
August 2024, loans to larger businesses constituted a slightly larger share
of fully repaid loans than those made to smaller businesses (see fig. 6).
Specifically, loans to larger businesses (those with annual revenues
exceeding $42.1 million) represented 20 percent of all loans but
accounted for nearly 25 percent of fully repaid loans. In contrast, loans to
smaller businesses (those with annual revenue of about $3.1 million or
less) accounted for 20 percent of all borrowers but about 16 percent of
fully repaid loans.
Page 17 GAO-25-107246 Federal Reserve Facilities
Figure 6: Percent of Fully Repaid Main Street Loans by Business Size, as of August
2024
Note: Percentages may not sum to 100 percent due to rounding.
Regional distribution of fully repaid loans. As of the end of August
2024, fully repaid loans were concentrated in the southern United States,
consistent with our findings from 2023. 27 Borrowers in census divisions 5
(South Atlantic) and 7 (West South Central) fully repaid more loans, both
by number and dollar amount, than borrowers in other areas of the United
States. Fully repaid loans in Florida and Texas together accounted for
almost one-third of all fully repaid loans.
The percentage of loans that had been fully repaid varied across different
regions. Compared with other census divisions, division 6 (East South
Central) had the highest percentage of fully repaid loans by number (59
percent repaid), while division 1 (New England) had the highest
percentage by dollar amount (74 percent repaid). In contrast, division 4
(West North Central) had the lowest percentage of fully repaid loans,
measured by both number and dollar amount (see fig. 7).
27GAO-24-106482, 36.
Page 18 GAO-25-107246 Federal Reserve Facilities
Figure 7: Fully Repaid Main Street Loans by Census Division, as of August 2024
Sectoral distribution of fully repaid loans. As of the end of August
2024, about 80 percent of fully repaid loans were in service-providing
sectors, while about 20 percent were in goods-producing sectors. This
distribution generally aligns with our findings in 2023. 28 Across all sectors,
the percentage of fully repaid loans varied by both number and dollar
amount. The information sector and the leisure and hospitality sector had
the highest percentages of fully repaid loans, at about 59 and 56 percent,
respectively, by number of loans repaid. In contrast, the construction
28GAO-24-106482, 36–37.
Page 19 GAO-25-107246 Federal Reserve Facilities
sector had the lowest percentage of fully repaid loans, at about 32
percent (see table 3).
Table 3: Number and Dollar Amount of Fully Repaid Main Street Loans by Sector, as of August 2024
Sector Number of fully repaid loans Dollar amount fully repaid, dollars in millions
(% of all loans in sector) (% of total loan amount in sector)
Service-providing sectors 682 (48.9%) $7,031 (53.8%)
Leisure and Hospitality 217 (56.4%) $2,008 (58.6%)
Trade, Transportation, and 144 (45.1%) $1,648 (52.1%)
Utilities
Professional and Business 110 (44.2%) $1,253 (57.3%)
Services
Financial Activities 80 (42.1%) $810 (42.7%)
Information 54 (58.7%) $544 (60.0%)
Education and Health Services 47 (48.5%) $597 (52.2%)
Other Services 30 (46.9%) $171 (48.7%)
(except Public Administration)
Goods-producing sectors 168 (38.8%) $1,802 (41.1%)
Manufacturing 76 (45.0%) $952 (55.6%)
Construction 53 (31.9%) $330 (29.2%)
Natural Resources and Mining 39 (39.8%) $521 (33.7%)
Source: GAO analysis of Federal Reserve Bank of Boston data. | GAO-25-107246
Losses Have Increased, As of the end of August 2024, 138 loans (or about 8 percent of all Main
Particularly among Street loans) had been partially or fully charged off, totaling about $969
million in recorded losses, a significant increase year-over-year (about
Smaller Businesses $781 million). 29 Losses increased sharply during the fourth quarter of
2023, with that trend continuing through the second quarter of 2024 (see
fig. 8).
29Recorded losses reflect losses on the principal amount of Main Street loans.
Page 20 GAO-25-107246 Federal Reserve Facilities
Figure 8: Number and Dollar Amount of Main Street Loan Losses, Second Quarter 2021–Third Quarter 2024
Note: This figure reflects data through the end of August 2024, which only partially represents the third quarter of 2024. The dollar amount of losses
reflects losses on the principal amount of Main Street loans.
This significant increase in the number and dollar amount of losses may
reflect the effects of increased interest payments and the first of three
required principal payments coming due for Main Street loans. As we
reported in 2023, higher interest rates have led to increased interest
payments on outstanding loans for borrowers, potentially imposing
financial burdens on businesses. 30 The first principal payments, which
began in July 2023 and continued through early 2024, required borrowers
to pay 15 percent of their loan’s principal. The second principal payment
of an additional 15 percent came due for most borrowers during the
second half of 2024, which could lead to further losses. A balloon
payment of 70 percent of the loan’s principal will come due for the earliest
program participants in the second half of 2025.
Distribution of losses by loan size. Of the approximately 8 percent of
Main Street loans that have experienced losses to date, losses by loan
30GAO-24-106482, 33. Main Street loans are subject to adjustable interest rates based on
a benchmark rate (generally, the Secured Overnight Financing Rate). Interest rates have
generally stabilized since our 2023 report, but they may still be higher than borrowers
initially anticipated.
Page 21 GAO-25-107246 Federal Reserve Facilities
size generally aligned with the distribution of Main Street loans at
origination. For example, loans valued at $1.2 million or less represent 20
percent of all loans and accounted for about 21 percent of charge-offs. In
addition, the largest loans (valued at more than $14.3 million), which also
represent 20 percent of all loans, accounted for about 18 percent of
charge-offs (see fig. 9). The largest loans represented 2 percent of all
losses when we last reported on losses in the Main Street program in
2023, which reflects the changing spread of losses year-over-year. 31
Figure 9: Percent of Main Street Loans with Losses by Loan Size, as of August 2024
Note: Percentages may not sum to 100 percent due to rounding.
Distribution of losses by business size. Loans to smaller businesses
accounted for a greater share of losses than loans to larger businesses,
as of the end of August 2024. Specifically, loans to Main Street borrowers
with annual revenue of about $3.1 million or less at the time of program
entry—the program’s smallest businesses—represent 20 percent of all
Main Street loans but about 28 percent of loans with losses to date. In
comparison, the program’s largest businesses, those with annual
revenues exceeding $42.1 million, also account for 20 percent of all loans
but about 14 percent of loans with losses (see fig. 10). These largest
businesses accounted for a smaller share of losses when we last
reported on Main Street loans, at about 2 percent. 32
31GAO-24-106482, 57.
32GAO-24-106482, 58.
Page 22 GAO-25-107246 Federal Reserve Facilities
Figure 10: Percent of Main Street Loans with Losses by Business Size, as of August
2024
Note: Percentages may not sum to 100 percent due to rounding.
Regional distribution of losses. As of the end of August 2024, census
region 3 (the South) accounted for the highest number and dollar amount
of losses in the Main Street program. 33 In this region, 81 loans
experienced about $581 million in losses, resulting in a charge-off rate
(that is, the number or dollar amount of loans charged off as a percentage
of total loans in a region) of about 9 percent by number of loans and
about 7 percent by dollar amount of loans. (See table 4.)
Table 4: Number and Dollar Amount of Main Street Loan Losses by Census Region, as of August 2024
Region Number of loans with losses Percent (%) of all Dollar amount of losses, in Percent of total loan
(number of loans made) loans in region that millions amount in region
have been charged (total dollar amount of that has been
off loans made) charged off
1 (Northeast) 17 (225) 7.6% $115 ($2,419) 4.8%
2 (Midwest) 10 (290) 3.4% $32 ($2,972) 1.1%
3 (South) 81 (927) 8.7% $581 ($8,378) 6.9%
4 (West) 29 (382) 7.6% $235 ($3,615) 6.5%
Source: GAO analysis of Federal Reserve Bank of Boston data. | GAO-25-107246
33As noted earlier, the Census Bureau divides the United States into various geographies
for analytical purposes. We report losses by Census region rather than Census division
due to the smaller percentage of loans that have incurred losses, compared with
outstanding and fully repaid loans.
Page 23 GAO-25-107246 Federal Reserve Facilities
Sectoral distribution of losses. Loans with losses were concentrated in
service-providing sectors, which generally reflects the overall distribution
of Main Street loans. In particular, loans to the trade, transportation, and
utilities sector accounted for the most losses by number (28), while loans
to financial activities companies accounted for the highest losses by dollar
amount (about $213 million).
Certain sectors have experienced higher charge-off rates than others. For
example, based on dollar value, about 12 percent of loans made to
construction businesses have been charged off. The financial activities
sector had the second highest charge-off rate, about 11 percent by dollar
value. In comparison, most sectors have experienced lower charge-off
rates, ranging from about 3 to 6 percent.
Delinquencies Have Delinquencies have generally increased over the course of the Main
Fluctuated as Principal Street Lending Program’s life cycle, but they began to decline after the
fourth quarter of 2023 (see fig. 11). 34
Payments Have Come
Due and More Loans
Have Been Charged Off
34The Federal Reserve Bank of Boston defines delinquent payments as any interest or
principal payment that is 30 or more days late. We calculate the delinquency rate as the
ratio of delinquent loans to outstanding loans at a given time. Generally, our delinquency
rate refers to active Main Street loans only. It excludes charged-off loans, which are no
longer considered active despite remaining in the Main Street portfolio for potential
recovery during the 5-year term of the loan.
Page 24 GAO-25-107246 Federal Reserve Facilities
Figure 11: Number of Active Main Street Delinquencies, Fourth Quarter 2021–Third Quarter 2024
Note: This figure reflects data through the end of August 2024, which only partially represents the third quarter of 2024. Delinquency counts include all
instances as of each quarter, meaning individual loans may be represented multiple times.
Federal Reserve Bank of Boston staff told us they attribute this decline to
the fact that many delinquent loans were fully charged off, removing them
from the count of active delinquencies. Our analysis of charge-offs and
delinquencies shows that the charge-off rate in the second and third
quarters of 2024 exceeded the delinquency rate among active loans (see
fig. 12). This suggests that many delinquent loans were charged off and
recorded as losses. The losses in the first two quarters of 2024 occurred
after initial principal payments (15 percent of loan principal) came due for
most borrowers in the second half of 2023. Some loans may have been
charged off because borrowers were unable to make this initial principal
payment.
Page 25 GAO-25-107246 Federal Reserve Facilities
Figure 12: Main Street Charge-Off and Delinquency Rates, First Quarter 2021–Third Quarter 2024
Note: This figure reflects data through the end of August 2024, which only partially represents the third quarter of 2024.
Distribution of delinquencies by loan size. Smaller loans accounted for
more delinquencies than larger loans as of the end of August 2024. The
smallest loans (valued at $1.2 million or less), which represent 20 percent
of all loans, accounted for about 22.4 percent of delinquent active loans.
In contrast, the largest loans (valued at more than $14.3 million), which
also represent 20 percent of all loans, accounted for about 14 percent of
delinquent loans.
Distribution of delinquencies by business size. Loans made to smaller
businesses accounted for more delinquencies than those made to larger
businesses. Specifically, loans to borrowers with annual revenue of $3.1
million or less represent 20 percent of all loans but accounted for about
30 percent delinquent active loans. Conversely, loans to larger
businesses, which also represent 20 percent of all loans, accounted for
about 11 percent of delinquent loans.
Regional distribution of delinquencies. The number of delinquent
active loans varied across U.S. regions. Census region 3 (the South) had
the highest number of delinquent active loans, with 66 loans (about 7
percent of the region’s loans). Although census region 1 (the Northeast)
Page 26 GAO-25-107246 Federal Reserve Facilities
had fewer delinquent loans, at 16, its delinquency rate was equal to that
of region 3.
Sectoral distribution of delinquencies. More delinquencies occurred in
service-providing sectors than in goods-producing sectors, reflecting the
distribution of loans at origination. The trade, transportation, and utilities
sector had the most delinquent loans, with 27 active loans delinquent.
In contrast, other sectors had higher delinquency rates despite having
fewer delinquent loans. For example, while the construction sector had 15
active delinquent loans—tied for third highest of all sectors—it had a
delinquency rate of about 9 percent, which is higher than any other
sector.
We provided a draft of this report to the Federal Reserve and Treasury for
Agency Comments review and comment. The Federal Reserve provided technical comments,
which we incorporated as appropriate. Treasury informed us it had no
comments.
We are sending copies of this report to the appropriate congressional
committees, the Chair of the Board of Governors of the Federal Reserve
System, and the Secretary of the Treasury. This report will also be
available at no charge on GAO’s website at https://www.gao.gov.
If you or your staff have any questions about this report, please contact
me at (202) 512-8678 or clementsm@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. GAO staff who made key contributions to this
report are listed in appendix II.
Michael E. Clements
Director, Financial Markets and Community Investment
Page 27 GAO-25-107246 Federal Reserve Facilities
List of Committees
The Honorable Patty Murray
Chair
The Honorable Susan Collins
Vice Chair
Committee on Appropriations
United States Senate
The Honorable Sherrod Brown
Chairman
The Honorable Tim Scott
Ranking Member
Committee on Banking, Housing, and Urban Affairs
United States Senate
The Honorable Sheldon Whitehouse
Chairman
The Honorable Chuck Grassley
Ranking Member
Committee on the Budget
United States Senate
The Honorable Maria Cantwell
Chair
The Honorable Ted Cruz
Ranking Member
Committee on Commerce, Science, and Transportation
United States Senate
The Honorable Kyrsten Sinema
Chair
The Honorable James Lankford
Ranking Member
Subcommittee on Government Operations and Border Management
Committee on Homeland Security and Governmental Affairs
United States Senate
Page 28 GAO-25-107246 Federal Reserve Facilities
The Honorable Tom Cole
Chairman
The Honorable Rosa DeLauro
Ranking Member
Committee on Appropriations
House of Representatives
The Honorable Jodey Arrington
Chairman
The Honorable Brendan Boyle
Ranking Member
Committee on the Budget
House of Representatives
The Honorable Patrick McHenry
Chairman
The Honorable Maxine Waters
Ranking Member
Committee on Financial Services
House of Representatives
The Honorable Sam Graves
Chairman
The Honorable Rick Larsen
Ranking Member
Committee on Transportation and Infrastructure
House of Representatives
Page 29 GAO-25-107246 Federal Reserve Facilities
Appendix I: Objectives, Scope, and
Appendix I: Objectives, Scope, and
Methodology
Methodology
The objectives of this report were to examine (1) the Board of Governors
of the Federal Reserve System’s oversight and monitoring of the CARES
Act facilities and (2) the status of Main Street loans and their
characteristics and trends in loan performance.
To address the first objective, we analyzed documentation from the
Federal Reserve’s Division of Reserve Bank Operations and Payment
Systems (RBOPS). This included its policies and procedures pertaining to
the monitoring and controls of the CARES Act facilities. We reviewed
planning documents and summaries of completed reviews of the facilities.
We also obtained written responses from Federal Reserve officials on
RBOPS’s framework and approach for ongoing monitoring of the facilities
and results of RBOPS’s oversight reviews.
We compared RBOPS’s monitoring plans against selected federal
internal control standards, including the principles that management
should establish and operate monitoring activities to monitor the internal
control system and evaluate the results, and that management should
remediate identified internal control deficiencies on a timely basis. 1
Additionally, we reviewed the Federal Reserve’s periodic reports covering
6-month periods from July 2023 to June 2024 and quarterly and annual
financial statements for updates on potential and actual losses incurred
by the Federal Reserve facilities. We also received written responses to
discussion questions from RBOPS officials on their lending facility
oversight and monitoring activities.
To address the second objective, we conducted on-site reviews of Main
Street Lending Program data at the Federal Reserve Bank of Boston. To
assess the status and characteristics of and trends in Main Street
Lending Program loans, we retrieved information from two data sources:
(1) a compendium from the Reserve Bank of borrower information
collected in the lender registration and participation review processes and
(2) Main Street accounting records that are generated by a third-party
contractor. The compendium included borrower information at loan
origination, as well as borrower-reported payment information. The
accounting records included information on loan positions, loan
transactions from inception, and loan delinquencies. We reviewed and
1GAO, Standards for Internal Control in the Federal Government, GAO-14-704G
(Washington, D.C.: September 2014).
Page 30 GAO-25-107246 Federal Reserve Facilities
Appendix I: Objectives, Scope, and
Methodology
analyzed participation data and loan-level payment data as of the end of
August 2024, the most recent data available.
We analyzed data from the program’s July 2020 inception through August
2024 to determine:
• the number and dollar amount of Main Street loan payments,
including interest and principal payments due and made;
• the number and dollar amount of outstanding, fully repaid, and
charged-off loans;
• the number of delinquent loans; and
• the distribution of outstanding, fully repaid, charged-off, and
delinquent loans by their loan and business sizes.
In addition, we analyzed geographic and sectoral information for
outstanding, fully repaid, charged-off, and delinquent loans. For our
geographic analysis, we used Main Street program data to match loan
payment information as of August 2024 to geographic identifiers collected
from borrowers at intake. To avoid revealing borrower-specific
information, we aggregated geographic data at the census division level
for outstanding and fully repaid loans and at the census region level for
charged-off and delinquent loans. We reported the number of loans for
each status category and analyzed dollar amounts for outstanding, fully
repaid, and charged-off loans.
For our sectoral analysis, we used program data to match loan payment
information to North American Industry Classification System (NAICS)
codes collected from borrowers at intake. To avoid revealing borrower-
specific information, we aggregated Main Street borrowers’ designated
NAICS codes into sectors defined by the Bureau of Labor Statistics. We
further aggregated sectors into super-sectors. 2 We reported the number
of loans for each loan status (outstanding, fully repaid, charged off, and
delinquent) by sector and super-sector. We also analyzed and reported
dollar amounts for outstanding, fully repaid, and charged-off loans.
2According to the Bureau of Labor Statistics, NAICS codes can be grouped into 10
sectors: construction; education and health services; financial activities; information;
leisure and hospitality; manufacturing; natural resources and mining; professional and
business services; trade, transportation, and utilities; and other services. These sectors
can be further aggregated into super-sectors, which include a goods-producing super-
sector and a service-providing super-sector.
Page 31 GAO-25-107246 Federal Reserve Facilities
Appendix I: Objectives, Scope, and
Methodology
To understand the relationship between delinquent and charged-off loans,
we used Main Street loan performance data to calculate delinquency and
charge-off rates on a quarterly basis. We first identified the number of
outstanding, delinquent, and charged-off loans for each quarter from April
2021 to August 2024. We then generated the delinquency and loss rates
by dividing the number of delinquent or charged-off loans by the number
of outstanding loans for each quarter.
We assessed the reliability of the Main Street data we used by reviewing
agency documentation, including a data dictionary, and conducting
electronic testing for outliers, missing data, and erroneous values. We
also interviewed staff of the Federal Reserve Bank of Boston to discuss
the interpretation and reliability of various data fields and how data are
collected, stored, and maintained. We determined that the data were
sufficiently reliable for describing selected characteristics of Main Street
loans and payment performance.
We conducted this performance audit from December 2023 to December
2024 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit to
obtain sufficient, appropriate evidence to provide a reasonable basis for
our findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objectives.
Page 32 GAO-25-107246 Federal Reserve Facilities
Appendix II: GAO Contact and Staff
Appendix II: GAO Contact and Staff
Acknowledgments
Acknowledgments
Michael E. Clements, clementsm@gao.gov, (202) 512-8678
GAO Contact
In addition to the contact named above, Tarek Mahmassani (Assistant
Staff Director), Zamir Ruli (Analyst in Charge), Blake Faucher, Daniel Flavin,
Acknowledgments John Karikari, Christopher Klemmer, Marc Molino, Jessica Sandler,
Jennifer Schwartz, and Farrah Stone made key contributions to this
report.
Page 33 GAO-25-107246 Federal Reserve Facilities
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