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U.S. Senate Republicans are preparing to bring up legislation today to replenish a program that helps small businesses slammed by the coronavirus, as House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin discuss a larger stimulus package, Reuters reported. Pelosi and Mnuchin, who have been negotiating intermittently since August on a fresh coronavirus aid plan, plan to speak again on Tuesday after they “continued to narrow their differences” in a nearly hour-long call yesterday, Pelosi’s spokesman, Drew Hammill, wrote on Twitter. Pelosi, the top elected U.S. Democrat, has set the end of the day today as a deadline for agreement with the White House, if a comprehensive coronavirus relief bill is to get through both chambers of Congress before Election Day on Nov. 3. President Donald Trump’s administration has proposed $1.8 trillion, while Pelosi has been pushing for a $2.2 trillion aid and stimulus package. That is in addition to the $3 trillion in coronavirus relief Congress already approved in the spring. While Pelosi said on Sunday she was optimistic a deal could be reached on a fresh package, and a spokeswoman said Monday the White House was also “cautiously optimistic,” optimism was in shorter supply in the Republican-run Senate, where many Republicans oppose passing more coronavirus aid. A senior Senate Republican, John Thune, expressed doubt Monday that there would be enough Senate Republican votes to pass a comprehensive bill as large as the White House bid of $1.8 trillion. Instead, Senate Republicans will propose on Tuesday a new round of funding just for the Paycheck Protection Program, a popular program that was launched earlier in the pandemic with bipartisan support to provide loans to small businesses. The measure is not expected to advance, because Senate Democrats have already given notice they consider such targeted efforts inadequate. McConnell said that the Senate also plans a vote on Wednesday on a $500 billion-plus Republican proposal to include unemployment benefits and aid to schools. It would provide people with $300 in federal weekly unemployment benefits, while the Democrats want to return to the $600 weekly level in a measure approved earlier this year. Democrats blocked a similar Republican proposal last month and the measure on Wednesday is also expected to fail. Read more.

In related news, Congress in March allotted $454 billion to the Treasury Department to support the central bank’s emergency lending programs, including those for struggling businesses and local governments. Of that pot, only $195 billion has been specifically committed to cover any losses the Fed might take, including through loans that companies fail to repay, the Washington Post reported. Seven months into the crisis, the remaining $259 billion still has not been committed to any of the Fed’s specific programs or for any other purpose, and it is unlikely that it will be anytime soon. The fate of this money show the surprising limits of the nearly $3 trillion in emergency aid Congress approved early in the pandemic. Federal Reserve and Treasury Department officials say there are ways the money could be repurposed to more directly reach businesses and workers but say they cannot do so without congressional approval. White House officials tried redirecting the money without congressional approval but were told by administration attorneys that they could not do so legally, according to two people who spoke on the condition of anonymity to describe internal conversations. Read more.

With the price of a barrel stuck around $40 and no recovery in sight, companies are combining to cut costs and ride out the pandemic, the New York Times reported. Most companies have cut back drilling, laid off workers and written off assets. Now some are seeking out merger and acquisition targets to reduce costs. ConocoPhillips announced on Monday that it was acquiring Concho Resources for $9.7 billion, the biggest deal in the industry since oil prices collapsed in March. The acquisition, days after the completion of Chevron’s takeover of Noble Energy, would create one of the country’s biggest shale drillers and signals an accelerating industry consolidation as oil prices languish around $40 a barrel, just above the levels many businesses need to break even. Just last month Devon Energy said it would buy WPX Energy for $2.6 billion. But many investors are not sure such deal making will be enough to protect the industry from a sharp decline. The share prices of ConocoPhillips and Concho closed down by about 3 percent on Monday. The big problem is that the fortunes of oil companies are fundamentally tied to oil and natural gas prices, which remain stubbornly low. Few experts expect a full recovery of oil demand before 2022, and some analysts have gone so far as to declare that oil demand might have peaked in 2019 and could slide in the years to come as the popularity of electric cars grows. More than 50 North American oil and gas companies with debts totaling more than $50 billion have sought bankruptcy protection this year. Among the casualties was Chesapeake Energy, a shale pioneer based in Oklahoma City. More failures could come in the next two years as companies are required to repay tens of billions of dollars in debt. Oil companies are facing daunting uncertainties, particularly as concerns over climate change mount and governments impose tougher regulations to reduce greenhouse gas emissions caused by the burning of fossil fuels. Read more.

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LRGHealthcare yesterday filed for chapter 11 protection, the latest hospital chain to succumb to disruptions from the novel coronavirus, Bloomberg News reported. The company has a stalking-horse offer from Concord Hospital Inc. for Lakes Region General Hospital, Franklin Regional Hospital and the hospitals’ ambulatory sites, according to a statement. The group plans to conduct a sale process and auction for the assets. The pandemic has pushed a cohort of struggling U.S. hospitals into deeper financial distress as they cope with the cost of care and precautions, a slowdown in profitable elective procedures, and a loss of lucrative privately insured patients. The American Hospital Association released a report in July from Kaufman, Hall & Associates that estimated as many of half of U.S. hospitals could be losing money by year-end. Population shifts from rural areas have also pressured many institutions. Problems at LRG, which listed liabilities of more than $100 million, began many years before the virus gut-punched the U.S. economy. Previous managers invested in inpatient care at a time when “patient demographics and medical trends indicated more reliance on outpatient services and decreased hospital use,” according to a court declaration. Costs rose, reimbursements fell, and it lost patients to other communities. The Laconia, New Hampshire-based company made extensive cost cuts, including eliminating more than a fifth of its workforce, but found that the reductions “did not result in profitability or sustainability.”

Dave & Buster’s Entertainment Inc., the chain that features sports bars and arcade games, launched a junk bond sale yesterday that would give the company more liquidity and provide relief from Covid-19 pressures, Reuters reported. The company is looking to borrow $500 million through the five-year secured note offering. Proceeds will repay a term loan and credit line, and be used for general corporate purposes. As part of the transaction, the firm is suspending certain maintenance covenants through April 2022, adding a $150 million minimum liquidity covenant and extending the maturity of its revolving credit facility by two years to 2024, according to a news release. Upon closing, the company will have about $299 million in available liquidity. Pandemic shutdowns sent revenue at the chain plunging, and it risked breaching the terms of a $500 million credit line. A waiver from lenders was set to expire Nov. 1, and the company has previously warned that it may need to file chapter 11 to restructure its obligations. Dave & Buster’s has been showing improving sales in October. 

Hudson Mercantile, the tony event space in Manhattan’s Hudson Yards neighborhood, filed for bankruptcy Monday after the Covid-19 pandemic curtailed revenues to almost nothing, Bloomberg News reported. Founded in 2008, the company is located in a former industrial building and is “one of the premier event venues in New York,” owner and operator Bentley Meeker said in a court declaration. The space has hosted fashion shows, product launches and cultural conventions, including parts of New York Comic Con. Hudson Mercantile posted revenues in excess of $1.6 million in each of the past three years, but event restrictions this year brought the company’s business to a halt, Meeker said. The space went from having “scores of events per week, often simultaneously” to completely shutting down in March, Meeker said in court papers. It’s recently started hosting outdoor events on its rooftop again. To deal with the temporary closures, the space’s staff of four shrank to one, and it stopped contracting with the “dozens” of freelancers it did before, he said. The venue includes a 5,200-square-foot ground floor, a 6,000-square-foot sixth floor studio and 5,000-square-foot rooftop, court papers show. Though Hudson Mercantile can host outdoor events again, that revenue stream is now under threat because the developer of an adjacent building is suing Hudson Mercantile’s landlord for access to the rooftop for construction. Damage to the rooftop business would be a “death blow,” Meeker said. Hudson Mercantile expects to be able to reorganize in chapter 11 bankruptcy, which allows companies to continue operating while working out a plan to repay debts, by executing a “strategic pivot” to rooftop events and eventually resuming limited indoor functions.

The proportion of U.S. households without access to a bank account fell in recent years but could be driven up again by the coronavirus pandemic, according to a survey released Monday by the Federal Deposit Insurance Corp. (FDIC), the Wall Street Journal reported. The unbanked rate declined to 5.4 percent in 2019 from 6.5 percent in 2017, as some 1.5 million households saw at least one member open a checking or savings account, the FDIC said in the biennial report. That rate represents the lowest level since at least 2009, when the survey began. Most of the decline reflected improvement in the circumstances of households that didn’t previously have bank accounts, the FDIC said. Unemployment is strongly correlated with lack of access to banking services and had fallen to 50-year lows before the pandemic sent the U.S. economy reeling this year. Officials warned that the economic disruption caused by the pandemic is likely to derail the trend of rising access to banking services. The U.S. jobless rate stood at 7.9 percent in September, more than double its year-ago levels. The reason for not having a bank account most frequently cited by respondents in the FDIC’s survey was inability to meet minimum balance requirements. Many of the nation’s largest banks charge monthly fees unless customers maintain several hundred dollars or more in their accounts.

Atlanta Federal Reserve Bank President Raphael Bostic said yesterday that it will be a while before the U.S. economy is fully recovered and before the Federal Reserve will raise interest rates or remove the support it is providing financial markets, Reuters reported. “On balance, I am comfortable with our current policy stance,” Bostic said. “As I have detailed today, though the U.S. economy continues to show clear signs of recovery, there remain significant portions where the recovery has been weak or nonexistent.” The Fed moved quickly to support the economy in March by slashing rates to zero and launching emergency lending programs to support market functioning. Those programs will stay in place as long as needed, however, market participants should expect the central bank to sunset some of its emergency lending vehicles after the crisis has passed, Bostic said. The economic crisis caused by the coronavirus pandemic caused the most pain for Black and Hispanic workers, who were disproportionately affected by job losses, Bostic said. Many of the jobs lost may not return, particularly in travel and food services, as companies adjust to lower demand or use technology to replace workers, he said.

AMC Entertainment Holdings Inc., the world's largest theater chain, said yesterday that it plans to open more cinemas in the United States this week, offering some hope to an industry hammered by pandemic restrictions and sending its shares up 24 percent, Reuters reported. The company said that it will reopen about a dozen locations in New York state starting Oct. 23, following guidance from Governor Andrew Cuomo over the weekend, and plans to have more than 530 theaters open in the country by the end of the month. While big theater chains such as AMC Entertainment, Cineworld Group and others have reopened many locations, audiences have been thin due to virus fears and delays in major releases by studios. Small and mid-sized theater companies have said they may not survive the impact of the pandemic.

Nancy Pelosi set a Tuesday deadline for more progress with the White House on a fiscal stimulus deal before the Nov. 3 election, while President Donald Trump renewed his offer to go beyond the dollar amounts now on the table, Bloomberg News reported. While Pelosi said that a pre-election deal remains possible, her team sent conflicting signals after setting a 48-hour deadline for progress on Saturday night. Her spokesman, Drew Hammill, later said the timing of the deadline means by the end of Tuesday, not Monday. At issue is wording “on the design on some of these things” that remain unresolved in the bill, Pelosi said on ABC’s “This Week.” “Are we going with it, or not? And what is the language?” she said. “The 48 only relates to if we want to get it done before the election, which we do.” Trump weighed in after drawing a rebuff by Senate Majority Leader Mitch McConnell last week for saying he’s prepared to go higher then the $1.8 trillion his team had been trying to offer Pelosi. She favors a $2.2 trillion plan. The president told reporters in Reno, Nevada, on Sunday, “I want at a bigger number” than Pelosi. “That doesn’t mean all the Republicans agree with me but I think they will in the end.” On Saturday, calling in to a Wisconsin TV station, Trump said he could exceed the amounts floated so far and voiced confidence that he “could quickly convince” Republicans wary of another large spending package to back a “good” deal. 

The Treasury Department privately encouraged lenders to prioritize existing customers when issuing loans for the federal government’s small-business coronavirus aid program, according to a report released on Friday by a Democratic-led congressional oversight subcommittee, the Wall Street Journal reported. The Treasury Department’s actions were one of several ways the Trump administration and several large banks put underserved businesses, including those owned by women and minorities, at a disadvantage when applying for the $670 billion Paycheck Protection Program, said the report from the House Select Subcommittee on the Coronavirus Crisis. Banks and other lenders issued PPP loans, and the Small Business Administration guaranteed them. The Treasury Department, which helped run the program along with the Small Business Administration, denied to the subcommittee that it had told banks to prioritize existing customers, the report said. The report said that documents obtained by the subcommittee show the Treasury Department instructed PPP lenders to “go to their existing customer base” when issuing the loans. “We encouraged all banks to offer loans to their existing small business customers, but no Treasury official ever suggested that banks should do so to the exclusion of new customers,” a Treasury Department spokesperson said. “The subcommittee’s conclusion to the contrary is false and unsupported by its own record.” On March 28, a day after the law establishing the PPP was enacted, Rob Nichols, president of the American Bankers Association, emailed the trade group’s board about a call with Treasury officials the previous day. “Treasury would like for banks to go to their existing customer base,” said the email, according to the report. “This will allow loans to move quickly,” Nichols added. A spokesman for the American Bankers Association said Friday the email “shows the lengths to which ABA was trying to assist the government in getting the PPP program off the ground in the middle of a pandemic.” He noted that while banks initially processed loans faster for customers they already knew, “over time it became easier to gather information to process new customers in this new and unprecedented program.”