Is the Fed’s Latest Round of Stimulus Legal?

by Robert Aro

The Fed cites section 13(3) of the Federal Reserve Act in order to engage emergency lending programs whenever “unusual and exigent circumstances” occur. Read the legislation below and decide for yourself if the forgivable loans under the Paycheck Protection Program Lending Facility (PPP/ PPPLF) are in defiance of the law.

The first dubious action occurred when the Fed-Congress symbiosis created “Special Purpose Vehicles” (SPV) owned by the US Government with appropriations from treasury. This is important as many of the Fed loan programs would be illegal if this loophole wasn’t created. As of latest release, the treasury funded $66.5 Billion for equity to the Fed’s facilities.

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