SDL round opens as House Financial Services Committee and Senate debate two separate CDFI-related bills.
From both sides of the Capitol and both ends of Pennsylvania Avenue, it’s a busy time for people watching the Community Development Financial Institutions (CDFI) program.
Here are the latest developments…
Small-Dollar Loan (SDL) Program Opens
The Treasury Department on Tuesday announced that the FY22 round for the CDFI’s Small Dollar Loan Program is now open. The program is intended to expand consumer access to financial institutions by offering an alternative to high-cost loans, such as those offered by store-front payday lenders. It also is intended to help unbanked and underbanked people build credit. However, grant funds may not be used for loans to consumers.
For the CDFI program, small dollar loans are considered to be unsecured loans of up to $2,500.
Applications for the program, which provides grants for loan loss reserves and technical assistance, must be submitted by July 15.
Reference copies of the SDL Program Notification of Funds Available (NOFA) and all application materials can be found on the SDL Program page on the CDFI Fund’s website.
House Financial Services Committee Markup
On Tuesday, the House Financial Services Committee will mark up several bills, including H.R. 7733, legislation that would decrease the CDFI Bond Guarantee Program minimum issuance threshold from $100 million to $25 million. The bill, introduced by Rep. Emanuel Cleaver, D-Mo., also would make the program permanent.
Congressman Emanuel Cleaver of Missouri
The bond program provides CDFIs with long-term capital at fixed, below-market interest rates through federally guaranteed bonds.
Program supporters have the $100 million threshold makes it difficult for small and medium CDFIs to participate because they often are interested in seeking smaller bond loans, from $10 million to $25 million.
Senate Bill Introduction
Across the Capitol, meanwhile, Sen. Brian Schatz, D-HI., and 11 of his colleagues have introduced legislation to create a fund to support CDFIs during acute periods of crisis.
Senator Brian Schatz of Hawaii
The bill, titled the CDFI Crisis Fund Act (S.4165), states the fund would make grants to CDFIs to enable them to provide financial products and services to help small business and low-income populations respond to and recover from serious emergencies.