Connect with the House Financial Services Committee Get the latest news: https://financialservices.house.gov/ Follow us on Facebook: https://www.facebook.com/FinancialDems/ Follow us on Twitter: https://twitter.com/FSCDems ________ On Wednesday, June 3, 2020, from 12:00 p.m. (ET) - - - - - A virtual hearing entitled, “Promoting Inclusive Lending During the Pandemic: Community Development Financial Institutions and Minority Depository Institutions” This single-panel hearing will have the following witnesses: • Lisa Mensah. President and CEO, Opportunity Finance Network • Michael T. Pugh, President, CEO, and Board Member, Carver Federal Savings Bank • Samuel C. Scott, Chairman, Black Chicago Tomorrow, and Co-Chair, American Business Immigration Coalition (ABIC) • James H. Sills, III, President and CEO, M&F Bank, representing the Independent Community Bankers of America (ICBA) Overview During the COVID-19 pandemic, Community Development Financial Institutions (CDFIs) and minority depository institutions (MDIs) have delivered much needed capital and relief to underserved communities, many of which have borne a disproportionate impact of the COVID-19 pandemic. For example, CDFIs and MDIs have provided more than $15.8 billion in Paycheck Protection Program (PPP) loans to small businesses through May 23, with a smaller median loan size of about $85,000 compared to the overall program median loan size of $116,000. In addition to establishing relief funds and services for local businesses and individuals experiencing loss of income, CDFIs and MDIs have provided mortgage forbearances, loan deferments, and modifications to help address the needs of their borrowers. The hearing will explore these efforts, existing challenges faced by CDFIs and MDIs, and proposals to enhance the work of CDFIs and MDIs to ensure underserved communities and minority-owned businesses are supported during this critical time. Community Development Financial Institutions The Community Development Financial Institutions (CDFI) Fund is an agency of the U.S. Treasury Department and was established by the Riegle Community Development and Regulatory Improvement Act of 1994. The mission of the CDFI Fund is “to expand economic opportunity for underserved people and communities by supporting the growth and capacity of a national network of community development lenders, investors, and financial service providers.” The CDFI Fund certifies CDFIs and Community Development Entities (CDE). A CDFIs certification is “the U.S. Department of the Treasury's recognition of specialized financial institutions serving low-income communities,” while a CDE is “a domestic corporation or partnership that is an intermediary vehicle for the provision of loans, investments, or financial counseling in low-income communities.” Becoming a certified CDFI or CDE allows organizations to participate in various CDFI Fund programs, as authorized by several statutes, as follows: • CDFI Program: financial assistance (FA) and technical assistance (TA) awards for CDFIs to invest in, and build their capacity, including product development and loan loss reserves. • Bank Enterprise Award (BEA Program): awards to FDIC-insured depository institutions for a demonstrated increase in lending and investments in distressed communities and CDFIs. • Native American CDFI Assistance Program (NACA Program): FA and TA awards for CDFIs and Sponsoring Entities to increase lending, and grow the number and build capacity of Native CDFIs • Capital Magnet Fund: awards to CDFIs and non-profit affordable housing organizations to finance affordable housing solutions and related economic development activities • Bond Guarantee Program (BGP): a source of long-term, patient capital for CDFIs to expand lending and investment capacity for community and economic development purposes. • Small Dollar Program: financial assistance for the creation of loan loss reserves to support small dollar loan offerings among CDFIs, including certified banks and credit unions. • New Market Tax Credit: tax credits for making equity investments in CDEs that stimulate capital investments in low-income communities. • Qualified Opportunity Funds: certain tax incentives if the investments meet defined criteria, and are held typically for a minimum period of 5 to 10 years. The CDFI Fund certifies Qualified Opportunity Funds. CDFI Key Financial and Performance Metrics As of May 14, 2020, there were 1142 certified CDFIs. The composition of CDFIs consists predominantly of nonbank lenders (loan funds), banks, and credit unions. This total number included 68 Native CDFIs. CDFIs have a national footprint, with certified CDFIs in all 50 states, D.C., Guam, and Puerto Rico. Congress appropriates funds annually to the CDFI Fund, with specific appropriations for each program and for the CDFI Fund operations. New Market Tax Credits... Hearing page: https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=406609