U.S. Treasury chief says reserving capital to add to Fed coronavirus lending programs

U.S. Treasury Secretary Steven Mnuchin said on Wednesday he is keeping some $259 billion worth of coronavirus aid capital in reserve for new or expanded Federal Reserve lending programs but is not considering further aid to airlines at the moment. Mnuchin told reporters during a video news briefing that all of the unallocated capital would go to broad-based Fed lending programs.

"I didn't want to allocate all the money up front," Mnuchin said on a Zoom chat. "I wanted to leave some in reserve to see how each one of these programs did, to see if the programs needed more money and to see if we needed to do more programs." Regarding airlines, he said there was currently no discussion regarding further aid to airlines after the current round of $25 billion in payroll assistance runs out. Airlines taking the aid must keep employees on their payrolls through Sept. 30, and Mnuchin said there was no consideration to changing that rule.

"I think this money was critical to keep these airlines together, which was important for national security," Mnuchin said. "I think we've struck the right balance of both payroll support, as well as offering them lending facilities which will also create additional liquidity." As small businesses and nonprofit groups scramble for a second, $310 billion round of forgivable payroll loans, Mnuchin also said that a third round of funding was not under discussion for the Paycheck Protection Program.

"There haven't been any discussions about a re-up," Mnuchin said of the program. The $310 billion, along with $350 billion in small business disaster loans approved last week by Congress, would provide substantial support to small businesses, he added.

Larger companies are continuing to return payroll loan funds following new Treasury guidance that largely excludes publicly traded firms, Mnuchin said. He did not offer a figure on the amount of returned money.