On June 17, GAO released its annual report examining the Fed’s oversight of emergency lending programs established under the CARES Act and the performance of Main Street Lending Program loans (previously covered by InfoBytes here). The report notes that the Fed authorized 13 emergency lending programs in response to the COVID-19 pandemic. Of the 1,830 loans made through the Main Street Lending Program — totaling $16.6 billion to small and midsize businesses and nonprofits — 70 percent were fully repaid as of January 5, GAO reported. The remaining 30 percent experienced or were at risk of losses: roughly 14 percent remained outstanding past their scheduled maturity dates, representing nearly $2 billion in authorized loan amounts, while 16 percent resulted in program losses, including $1.3 billion in charged-off loan amounts and $1.4 billion in loans sold back to lenders at a net loss.

As of January 2026, GAO reported that approximately $672 million in loan participations remained outstanding. GAO found that significant interest rate increases over the program’s life cycle and the timing of principal payment milestones were generally associated with a decreased likelihood of full repayment and an increased likelihood of loan impairment. About 70 percent of borrowers with loans outstanding through their scheduled maturity date were unable to make their final balloon payments on time, GAO reported. According to GAO’s analysis, loans to larger borrowers and those made by larger lenders had higher payoff rates and lower default rates; about 87 percent of loans made by the largest lenders were fully repaid. The report provides that the Federal Reserve Bank of Boston, which administered the Main Street Lending Program facilities, initiated a formal buyback program in June 2025, through which it sold 92 loans back to lenders at a loss, as an effort to minimize loan expenses and limit additional program losses.