Beverly Hills, LA – Puerto Rico’s debts popped up to take center stage as Jack Lew, the US Treasury secretary, spoke about allied subjects at the ongoing Milken Institute Global Conference in Beverly Hills.
Addressing a select audience, Lew reminded them about his communications with US lawmakers and reiterated that legislation to create a restructuring authority for the territory was necessary to prevent a choice between “chaos or a bailout.”
Urging the lawmakers to act fast, Lew said, “The cost of delay is you get to the point where there is nothing to restructure.”
Going into details, Lew noted while some creditors support the US Treasury’s plans, “there are others who want to maximize their chance of getting a dollar on a dollar even if others get nothing.”
Puerto Rico, a US territory, had a major breakdown on Monday when the island’s governor ordered a moratorium on debt payments due from its de facto finance authority. Over the years, Puerto Rico does not have access to bankruptcy protection like US states, counts $70bn of debt and a severely underfunded $46bn pension system.
In a prepared speech provided to journalists, Lew mentioned about how the Small Business Lending Fund (SBLF) provides capital to community banks and Community Development Loan Funds to help expand their lending capacity to small businesses.
“Through SBLF, Treasury has invested over $4 billion in more than 300 institutions. These institutions operate in over 3,000 locations across 47 states and the District of Columbia,” said Lew, adding, “And, since the program’s inception, total small business lending reported by current and former participants has increased by $18.4 billion.”
Most of his prepared speech was dedicated to the small business world as he concluded, “Small business leaders provide opportunities for America’s future and demonstrate the diverse pathways that can be taken to achieving the American dream.”