In response to the COVID-19 crisis, the Federal Reserve established several emergency lending facilities to provide access to credit across the economy. The program terms were originally limited to issuances rated by only the largest incumbent rating agencies, excluding all other Nationally Recognized Statistical Ratings Organizations (NRSROs). This caused the potential pool of participants in the Fed facilities to be smaller than optimal, and limited the scale of relief. Municipalities and small and midsize businesses were particularly affected by these limitations.

The challenge.

In addressing the need to adjust the terms of the programs, Mindset had to ensure that regulatory officials and Congress, who were dealing with a profound national crisis, could turn attention to a narrow issue with widespread effects.

The approach.

To successfully tackle this esoteric issue, we first took the time to understand the underlying business concerns the problem would pose for specific sectors. Armed with this knowledge, we engaged in tailored outreach to regulators and Congress with diverse coalition partners. Regulators expanded the terms of the facilities, but with some limitations. To help advance the issue further, we turned to the lawmakers who have championed competition and access to relief. We worked with them on legislation to enshrine requirements that the Fed accept ratings from all NRSROs, a measure which has already unanimously passed the House of Representatives.

We thrive on tough problems and work hard to make sure our clients’ issues get the attention in Washington they deserve, no matter how narrow or technical they might seem. In this case, we mastered the details so we could underscore the real-world importance of this problem to drive policy solutions.

Chris Brown, Principal

The solution.

Because of Mindset’s efforts, a greater number of borrowers can now access needed capital to maintain essential services. However, knowing there are still small and mid-sized businesses that need better access to credit, we won’t stop working until we secure the right outcome.