House Financial Services Chairman Maxine Waters (D-Calif.) and credit union trade groups are pushing policymakers to immediately boost funding for the Community Development Financial Institutions program as a way to funnel assistance to small business and low-income communities.
But the Trump Administration, which has targeted the CDFI program for elimination, has ignored the program in its economic stimulus proposals.
Waters on Wednesday released a list of proposals that she said would help consumers and small businesses weather the coronavirus.
She proposed providing an immediate appropriation of $500 million for the CDFI program and said that requirements for matching funds should be eliminated.
The CDFI program received a $12 million boost this year, to $262 million. The Trump Administration has proposed eliminating the program in each of its budgets.
However, Treasury Secretary Steven Mnuchin has conceded that there is strong support for the program on Capitol Hill and that he would not attempt to defend the proposed cuts.
CUNA President/CEO Jim Nussle has endorsed an immediate appropriation of $300 million for the CDFI program, as well as $3 million for the NCUA’s Community Development Revolving Fund program.
“Both of these funds support generally smaller financial institutions that serve people and small businesses that will likely be the first to feel the real-world effects of a missed paycheck or a cancelled order or contract,” Nussle said.
“Both the Community Development Financial Institutions Fund and the Community Development Revolving Loan Fund are designed to help the types of community-based financial institutions, like credit unions, that are perfectly positioned to receive this funding the quickest and then turn it around and provide emergency financial assistance to the people and small businesses that need it the most,” he added.
NAFCU President/CEO B. Dan Berger said the CDFI and the revolving loan fund are important tools for credit unions to access funds to help people in underserved and low-income communities.
The CDFI has an upcoming deadline of April 21 for the submission of grants, noted Michael Beall, chief strategic and advocacy officer at CU Strategic Planning, a consulting group that assists credit unions in writing CDFI applications.
Beall asked congressional appropriators to immediately increase CDFI funding to $600 million for the April 21 grant cycle.
And he asked Congress to create an emergency round of CDFI grants “targeted to lending institutions that can demonstrate the capacity to increase small dollar consumer, transportation, small business and home mortgage lending.”
He also recommended that the NCUA revolving fund receive an immediate $5 million infusion of funds.