The government spending and economic relief legislation passed by the House and Senate includes a vital set of bipartisan provisions to support community development financial institutions (CDFIs) and minority depository institutions (MDIs). The U.S. Impact Investing Alliance offered its praise for the provisions, which will help bolster community lending for small businesses and nonprofits in the country’s hardest hit communities.
Section 520 of the Coronavirus Response and Relief Supplemental Appropriations Act will set aside $12 billion for CDFIs and MDIs - $9 billion to support expanded lending to small businesses in underserved communities through the new Emergency Capital Investment Program and $3 billion for the CDFI Fund to strengthen the CDFIs and MDIs serving them. The broader package also includes important provisions to ensure that these community lenders are able to leverage the renewed Paycheck Protection Program to support Main Street businesses.
“The successes of CDFIs and MDIs have been bright spots in our country’s ability to respond to the economic fallout of the COVID-19 crisis,” said Executive Director Fran Seegull. “From the PPP to private sector response efforts, these financial institutions act as capillaries nimbly and effectively reaching the kinds of Main Street businesses most in need of support.
“Passage of these crucial provisions will fortify CDFIs and MDIs at a critical moment,” she went on. “Investors looking to support a just and equitable recovery will now have a set of community lending institutions to partner with. We are grateful to our Republican and Democrat champions in the House and Senate of the Jobs and Neighborhood Investment Act and related efforts, which helped lay the groundwork for ensuring that CDFIs and MDIs were included in this package. We hope that the Biden-Harris Administration and the next Congress continue to build on this historic investment for years to come.”
The U.S. Impact Investing Alliance recently released its updated public policy agenda “Private Capital, Public Good.” Efforts to support CDFIs and MDIs, such as in this new relief package, were included as recommendations in that report.
“The creation of the CDFI sector and the critical role it is playing in the economic relief effort is a powerful example of how effective federal policy can unlock private capital for public good, Seegull said. “These institutions have been built to serve the communities that mainstream finance overlooks – Black, Brown, tribal and rural communities – through a combination of philanthropic, government and private sector investment stretching back decades.”
About the U.S. Impact Investing Alliance
The U.S. Impact Investing Alliance ("Alliance") is a non-profit organization dedicated to building the impact investing ecosystem by bridging market gaps and addressing shared challenges. The Alliance's long-term vision is to place measurable social, economic and environmental impact alongside financial return and risk at the center of every investment decision. For more information, please visit www.impinvalliance.org.