The U.S. Impact Investing Alliance submitted public comments today opposing proposed regulations from the U.S. Department of Labor that would harm retirement savers and suppress their voices on critical environmental, social and governance issues.
U.S. Impact Investing Alliance Calls for a Suspension to Yet Another DOL Rulemaking Harmful to Retirement Savers
The U.S. Impact Investing Alliance again called on regulators today to suspend an unnecessary and harmful rulemaking effort given the ongoing global health and economic crises. The Department of Labor has proposed a rule that would effectively prohibit ERISA-regulated retirement and pension plan fiduciaries from engaging corporate managers through the proxy vote process, singling out engagement on environmental, social and governance (ESG) issues in particular. The Alliance and many in the field view this proposal as an attack on shareholder engagement and the broader principles of impact investing.
CDFIs Are on the Frontlines of Supporting Communities. Now They Need Our Help.
As the U.S. grapples with the triple crises of the COVID-19 pandemic, economic recession and systemic racism, a pain point has emerged in federal efforts to build an inclusive and equitable recovery – the lack of funding for community development finance institutions, or CDFIs. CDFIs have a rich history, providing low- to moderate-income households, small businesses and operating nonprofits like health clinics with access to responsible, affordable capital. Amid ongoing crises, CDFIs are proving to be the single best avenue for getting capital into the hands of the hardest hit communities.
Alliance Opposes Harmful DOL Rule on ESG Investing
The U.S. Impact Investing Alliance submitted a comment letter to the Department of Labor (DOL) today in opposition to the proposed changes to the fiduciary standard for ERISA-regulated retirement plans. The Alliance and its members strongly disagree with the substance of the DOL’s proposal, and we urge regulators to reconsider their foundational assumptions that either lack supporting evidence or are in direct contradiction with broadly accepted investment practices and theories.
Alliance Urges DOL to Pause Disruptive Rulemaking on ESG in ERISA Regulations
In a public comment to the U.S. Department of Labor today, the U.S. Impact Investing Alliance called on regulators to suspend efforts to rewrite the fiduciary standards for ERISA-regulated pensions. The Alliance is concerned that the proposed rule would have a chilling effect on ESG investments by placing an undue burden on fiduciaries considering ESG criteria, despite the fact that ESG metrics often correlate with long-term financial performance. The comment period is scheduled to close on July 30, and given the significant upheaval and distress caused by the COVID-19 pandemic, as well as the complexity of the proposed changes, the Alliance urges the Administration to delay the deadline until well after the crisis has passed.
U.S. Impact Investing Alliance’s Statement on Black Lives Matter
In this time of deep pain, frustration, anxiety, and anger, we at the U.S. Impact Investing Alliance stand with protesters around the country who are crying out for change. They are right. Our country is long overdue for its institutions and systems to recognize and reflect this fundamental truth: Black Lives Matter.
Final CRA Rule Imperils Communities at a Time of Heightened Uncertainty
Today, outgoing Comptroller of the Currency Joseph Otting pushed through dangerous revisions to the Community Reinvestment Act (CRA) that threaten to undermine the bedrock of community investment activity in the United States. Tellingly, he was not joined in this effort by any of the OCC’s fellow regulators at the FDIC or the Federal Reserve. In its own words, the FDIC “recognizes the herculean effort community banks are making to support America's small businesses and families during this challenging time and encourages financial institutions to work constructively with borrowers affected by COVID-19.” We agree that an economic crisis is not the time to undermine community finance institutions or to saddle banks and investors with complicated new investment regulations.
CRA Reforms Jeopardize Impact Investments in Vulnerable Communities
The U.S. Impact Investing Alliance submitted comments to federal regulators today outlining our substantial concerns with proposed rules to fundamentally overhaul the Community Reinvestment Act (CRA). The proposed changes from the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) would significantly dilute the CRA, putting billions of dollars of community development activities at risk at a time when American communities need them the most. The Alliance previously submitted comments last month urging regulators to extend the rulemaking until well after the COVID-19 National Emergency is lifted, echoing similar calls from the Presidents’ Council on Impact Investing.
To learn more about the potentially harmful implications of the proposed rules from the OCC and FDIC, click here.
In Effort to Modernize CRA, Regulators Are Poised to Strip Community Development Tool, At a Time When Stability is Paramount
The COVID-19 pandemic and the threat of a prolonged recession or even depression will inflict long-lasting damage on our most vulnerable communities, even in a best-case scenario where we can restrain the virus’ spread. Leaders and institutions are rightfully looking to marshal every available resource to aid our collective response. We must move decisively to keep people in their homes, protect the well-being of those most vulnerable, and prepare businesses to reopen when possible. It is in this context that we are calling for the immediate suspension of efforts that could severely undermine the Community Reinvestment Act (CRA) and rob communities of desperately needed support.
Alliance Calls for CRA Rulemaking Extension Amid COVID-19 Pandemic
The U.S. Impact Investing Alliance submitted comments late last week urging federal regulators to extend the comment period for proposed changes to the Community Reinvestment Act (CRA) given the ongoing health crisis. The Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) have proposed rules that would drastically alter the CRA, a key community development tool that requires banks to be responsive to their communities’ financial needs. While the Alliance plans to submit additional comments on the substance of the proposed rules, the initial comments call for the extension of the current April 8 deadline until 90 days after the National Emergency Concerning the COVID-19 Outbreak is declared over. The Alliance believes that stability for communities and banks right now is paramount as the country grapples with the health and economic impacts of the pandemic.
Alliance Statement on Final Rules for Opportunity Zones
The regulations released yesterday give important clarity to investors in Opportunity Zones, particularly those looking to invest in the kinds of operating businesses that create meaningful economic opportunity for residents of Opportunity Zones. Treasury also took important steps to preempt abuse – speculators won’t be able to buy up land for parking lots or safe deposit boxes. Unfortunately, this rule from Treasury fails to address public transparency and accountability in a meaningful way.
Statement on Congressional Oversight of Opportunity Zones Implementation
Fran Seegull Testifies at IRS Hearing on Opportunity Zones
U.S. Impact Investing Alliance Executive Director Fran Seegull testified before the Internal Revenue Service on the importance of data collection and transparency in Opportunity Zones at a public hearing held February 14, 2019. Echoing written comments she called on the IRS and Treasury to take action to immediately begin collecting fund- and market-level information related to investments in Opportunity Zones.
BUILD Act Passage Signals New Era for U.S. Development Finance
U.S. Impact Investing Alliance Statement on Department of Labor ESG Guidance
On April 23, the Department of Labor published a “Field Assistance Bulletin” providing guidance to fiduciaries of private-sector employee benefit plans. The note served as a clarification related to the DOL 2015 guidance on economically targeted investments and the DOL 2016 guidance on shareholder engagement. While remaining clear that fiduciaries must prioritize financial returns, the DOL confirmed that pension managers can and should feel comfortable using ESG factors as an input in evaluating potential risk and financial return.
Congress Passes the Social Impact Partnerships to Pay for Results Act (SIPPRA)
Included in the recently passed Bipartisan Budget Act of 2018 was the Social Impact Partnerships to Pay for Results Act (SIPPRA). This legislation is the result of more than five years’ worth of efforts by bipartisan lawmakers to create a standing pool of capital to support outcomes based financing. It builds on the work and learning of the Social Innovation Fund, state level pay for success projects, and the global movement to create social impact bonds. It was also highlighted as a priority in the National Advisory Board on Impact Investing’s report, Private Capital for Public Good. At the U.S. Impact Investing Alliance, we have been following this bill closely as we know it is a topic of interest to many of our members.