Chuck Morton was quoted by Bloomberg on April 16, 2020, and by the Washington Post on April 17, 2020, from his discussion of the regulations surrounding the Federal Reserve’s program to give loans to mid-size business using funds allocated to it by the Coronavirus Aid, Relief and Economic Security (CARES) Act.
According to the article, Congress attached strings to any funding doled out in some programs, ranging from prohibitions against interfering with union organization to limitations on off-shoring jobs. The Fed is adhering to some of the restrictions, asking companies to adhere to limitations in the law on stock buybacks, dividends, compensation, and to make “reasonable efforts” to retain employees during the term of the loan.
Fed programs that buy securities directly in the market are aimed at a broad universe of companies, and it would be difficult to apply constraints. “As businesses get larger, the struggles to apply the regulations to the international aspects” of their operations “become more difficult,” said Morton.