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.
Launching the Tipping Point Fund to Help Scale the Impact Investing Field
Statement on Congressional Oversight of Opportunity Zones Implementation
Foundations Push for Reporting Requirements on Opportunity Zone Funds
The Presidents’ Council on Impact Investing, a group of powerful private foundations, is asking legislators to add a mandatory reporting requirement and other regulations to the rulebook for opportunity zone funds.
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.
Impact Investing Leaders Introduce Opportunity Zones Reporting Framework
BUILD Act Passage Signals New Era for U.S. Development Finance
Why impact data and transparency are keys to the success of opportunity zones
(This article was originally posted to ImpactAlpha) Assets in impact investing continue to surge, buoyed by increasing investor interest in aligning financial goals with social and environmental objectives. Today such assets represent as much as one in five of all U.S. assets under professional management.
Opportunity Zones: Moving Toward a Shared Impact Framework
The tax bill passed in 2017 includes a provision creating various benefits for investors that move capital gains into designated low-income census tracts, known as Opportunity Zones, through special investment vehicles known as Opportunity Funds. This tax benefit has captured the attention of a wide range of stakeholders — from investors attracted by a new tax incentive to community development practitioners drawn by the promise of increased investment in low-income areas.
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.
The Future of Investing is Impact Investing
The United Nations estimates that achieving its 17 Sustainable Development Goals by 2030 will require trillions of dollars. The global goals aren’t the only way to measure our challenges, but they do paint a clear picture: given the scale of the problems the world faces, it’s clear that traditional sources of capital, like government aid and philanthropy, simply won’t be enough.
