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To help our clients navigate the coronavirus (COVID-19) crisis, Arnold & Porter has established a Coronavirus Task Force covering a wide range of issues and challenges. Subscribe to our "Coronavirus (COVID-19)" mailing list to receive our latest client Advisories and register for upcoming webinars.

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Note: This Advisory was last updated on August 6, 2020

The unprecedented economic dislocation caused by the COVID-19 pandemic has prompted comprehensive legislative and administrative responses. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act or Act), signed into law on March 27, 2020, is the largest single piece of recovery legislation in US history. It is the third piece of federal legislation enacted in response to the COVID-19 crisis. Since then, a fourth bill has been passed to provide additional funding and relief, and still more legislation is in the works.

Unlike many industries that are largely shut down or sharply curtailed due to the pandemic, the financial services sector is generally seen by policymakers as a critical component of the solution. Many of the CARES Act's primary avenues for assistance to the business community are through loan and loan guarantee programs that rely on financial institutions to extend the credit and provide the liquidity needed by affected businesses. Loan programs such as the $500 billion U.S. Department of the Treasury (Treasury Department) loan/guarantee/investment program make up a substantial portion of the CARES Act. Even before the legislation was enacted, the Board of Governors of the Federal Reserve System (Federal Reserve) had begun expanding its efforts, in the form of a wave of financing facilities. In acting on the present crisis, both the Treasury Department and the Federal Reserve are drawing on experience gained in the aftermath of the 2008 financial melt-down.1

© Arnold & Porter Kaye Scholer LLP 2020 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

  1. A review of federal and state financial services regulatory actions to aid financial institutions, other businesses, and individuals confronted by the pandemic can be found in our Advisory, "Financial Services Regulatory Actions to Address the Economic Impact of the COVID-19 Epidemic."