Today Congresswoman Maxine Waters (D-CA), the top Democrat on the House Financial Services Committee, announced the reintroduction of H.R. 9767, the “Promoting and Advancing Communities of Color Through Inclusive Lending Act” to support Minority Depository Institutions (MDIs) and Community Development Financial Institutions (CDFIs) in honor of the 30th anniversary of the creation of the CDFI Fund. This legislation builds on the Committee’s work to support CDFIs and MDIs and authorizes $4 billion in additional capital, grants, technology support, and other reforms to increase affordable lending in minority communities, including to small businesses and minority-owned businesses.

“CDFIs and MDIs are critical lifelines for underserved communities, often stepping in to provide financial products and services for these communities who have been historically and systemically shut out from access to traditional banking services,” said Congresswoman Waters. “While Committee Democrats have made major progress to support MDIs and CDFIs in recent years, we must build on this success by advancing additional resources and reforms to bolster these diverse and mission-driven community financial institutions. That’s why I am pleased to reintroduce this critical piece of legislation on the 30th anniversary of the CDFI Fund, which if passed, will ensure these institutions can continue their mission to provide communities with affordable and fair financial services and access to credit, and aid Congress in the effort to reverse decades of exclusion and discrimination in the banking system.”

While MDIs and CDFIs have a proven track record of providing greater financial access to low-income communities and communities of color compared to other financial institutions, these diverse and mission-driven community institutions have faced a number of challenges in recent years. For example, more than half of Black-owned banks have closed their doors since 2008. While Ranking Member Waters worked with Republicans and Democrats to secure an initial investment of $12 billion to bolster CDFIs and MDIs in December 2020, applications for part of those funds was oversubscribed by more $4 billion. It is clear more financial support and reforms are needed to support these institutions as they provide financial access to communities of color and underserved communities.

Specifically, this bill will:

• Strengthen diverse and mission-driven community financial institutions;
  
• Support capital investments, grants, and technology for MDIs and CDFIs;
  
• Create a new young entrepreneurs’ program at the CDFI Fund to get the start-up capital needed to start a small business;
  
• Require Treasury to provide an interactive, searchable map of MDIs and CDFIs that shows the geographic locations of their headquarters and branch locations;
  
• Codify an annual report on certified CDFIs regarding the impact various types of CDFIs have on different communities;
  
• Require the CDFI Fund to periodically consult with Federal banking agencies and the CFPB, regarding applying and certified CDFIs they regulate;
  
• Ensure MDIs and CDFIs have access to the Fed’s discount window; and
  
• Require a Treasury study on the use of securitization by CDFIs.
  
  

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Background:

• After Congress passed the CARES Act in March 2020, launching the Paycheck Protection Program, Congresswoman Waters worked with then chair of the Small Business Committee Congresswoman Nydia Velazquez to secure a $60 billion set aside for community financial institutions in the PPP, including CDFI loan funds, to ensure diverse and truly small businesses could quickly access the relief they need to keep their doors open and survive.
  
• In December 2020, Congresswoman Waters and Senator Warner worked together to secure an unprecedented $12 billion in capital investments and grants for CDFIs and MDFIs to allow them to expand and provide the support that all communities deserve, including small businesses and businesses owned by people of color, which were the hardest hit during the COVID-19 pandemic.
  
• In 2021, Congresswoman Waters and Senator Warner organized a Community Development Advisory Group with key stakeholders they periodically have met with, in coordination with Vice President Kamala Harris, to monitor the implementation of the programs supporting CDFIs and MDIs and identify opportunities for additional reform.
  
• Whenever Waters meets with big bank CEOs, she asks what they are doing to help CDFIs and MDIs and the Congresswoman presses them for updates to make sure those commitments are fulfilled.
• Congresswoman Waters worked with Senator Warner to send a letter to the Government Accountability Office, requesting a study to identify the technology needs that CDFIs and MDIs have and policy options to address those challenges, and along with several other colleagues, a letter to the Environmental Protection Agency, urging them to ensure that investments through the new Greenhouse Gas Reduction Fund are administered in a way that collaborates with and empowers CDFIs and other community financial institutions to ensure we bring clean energy investments to underserved communities, especially communities of color.