Initiative aims to provide additional support to CDFIs and MDIs through “strategic, coordinated approach.”
A bipartisan group of senators on Monday announced the formation of a Senate Community Development Finance Caucus to support the missions of both CDFIs and Minority Depository Institutions (MDIs).
The caucus is being led by Sen. Mark Warner, D-Va., and Sen. Mike Crapo, R-Id. Warner’s committee assignments include membership on the tax-writing Senate Finance Committee and the Senate Banking Committee. Crapo is a member of both committees as well; he is ranking Republican on the Finance panel.
Members said they want to help generate more lending in low- and moderate-income communities. “We have seen increased congressional focus, but a strategic, coordinated approach is needed,” the group stated.
What Will the Caucus Do?
Caucus members said they intend to:
–Organize events to educate congressional staff and senators on challenges facing community-based lenders.
–Coordinate regulatory and legislative efforts on behalf of community-based lenders and serve as a forum for staff to share information.
–Develop legislation to support CDFIs and MDIs.
–Track the implementation of federal programs and private-sector commitments.
In announcing the initative, Warner said that “While Congress took significant steps to support community-based lenders over the last two years on a bipartisan basis, CDFIs continue to need more long-term patient capital, operating capital, and resources to modernize their systems and compete in an era of rapid financial innovation.”
Added Crapo: “I have consistently heard positive news and success stories about CDFIs in Idaho and across the country, and their responsiveness to the small business community, particularly during these last few challenging years of the pandemic.”
Credit Union Response
Several credit union and banking trade groups support formation of the caucus.
“This body will provide a platform to engage the CDFI industry and inform the development of public policy that’s both impactful and sustainable,” said Cathie Mahon, president/CEO of Inclusiv, which represents CDFI credit unions.
Maria Martinez, chair of the National Association of Latino Credit Unions and Professionals, said the caucus “will give lawmakers a platform to support the critical work CDFIs play in low income and communities of color as financial first responders and engines of economic revitalization.”
“The creation of the Caucus represents an important step in ensuring that America’s financial system works for everyone,” added Bill Bynum, CEO of the Hope Credit Union.
Makeup and Outlook
The caucus’s members include Sens. Amy Klobuchar, D-Minn.; Mike Braun, R-Ind.; Jon Ossoff, D-Ga.; Steve Daines, R-Mt.; Jack Reed, D-R.I.; Cindy Hyde-Smith, R-Miss.; Tina Smith, D-Minn.; Cynthia Lummis, R-Wy.; Chris Van Hollen, D-Md.; Jerry Moran, R-Kan.; Raphael Warnock, D-Ga.; and Mike Rounds, R-S.D.
The caucus could have its work cut out for itself in the Senate after Democratic appropriators last week proposed providing the CDFI program with $324 million in FY23. While that is $29 million more than the program received during the current fiscal year, it is $7.4 million less than the House has proposed for FY23 and $7 million less than the Biden Administration proposed in its FY23 budget request.
Learn more about the CDFI program and the benefits it could bring your credit union by visiting our page on certification, or contact our consulting team directly today!