The news affected stocks of economic giants JP Morgan,  Wells Fargo ( WFC). The helping to drive the Dow down as much as about 300 points,  or 1%. US Treasury yields also crept higher, weighing on the broader markets.

Last March, companies were facing a lot of disarrays the Federal Reserve handed a sort of “get out of jail free” card to America’s big banks:  It loosened leverage rules that JPMorgan, Bank of America ( BAC), and other large lenders must obey.

But on Friday, US regulators said they would allow the leverage exemption to expire at the end of the month, explaining that the “temporary change was made to provide flexibility” to banks — allowing them to keep providing credit to families and businesses during the pandemic.

The Federal regulators also announced it will attempt to rework the leverage rule to make sure it remains effective in the current environment.

The decision follows pressure from leading democrats who were worried big banks were using the pandemic as an excuse to weaken post-2008 crisis rules.

From March 31, the Paycheck Protection Program, which was created by Congress a year ago to help locally owned stores, restaurants, and service providers survive the crisis, will stop taking applications.

“No applicant should be left stranded because of bureaucratic red tape,” Alice Frazier, president, and CEO of the Bank of Charles Town (in West Virginia) told the House Small Business Committee Wednesday.

The upcoming deadline has the bipartisan support of federal lawmakers hurrying to pass legislation extending the PPP at least through May.

The Senate Committee on Small Business & Entrepreneurship chairman Maryland Democratic Sen. Ben Cardin said, “It’s clear that the most vulnerable small businesses will need help beyond March 31, so we must pass this extension as quickly as possible.”

Cardin is co-sponsoring a bill with Republican Susan Collins of Maine and Democrat Jeanne Shaheen of New Hampshire that would give the Small Business Administration until May 31 to accept applications and until June 30 to process them.

The PPP comes as part of the CARES Act that was approved in March 2020 by Congress. It helped firms employing 500 or fewer workers with low-interest loans of up to $10 million (that often turned into grants) to cover their pandemic-related costs. 

Congress has kept refining the program and has targeted the smallest of companies, allowing the hardest-hit firms to take out a second loan.

American Rescue Plan by the Biden administration passed by Congress last week includes another $7.25billion for the program. But not extending the PPP loan deadline could spell doom for thousands of businesses facing a crisis.

According to the National Federation of Independent Businesses, 15% of small-business owners say that they will have to shut their doors if current economic conditions do not improve over the next six months.

“The PPP will continue to play a vital role for many small businesses to keep employees on payroll and assist with certain business expenses,” wrote Kevin Kuhlman, NFIB vice president for federal government relations in a letter to congressional leaders.