Mary Scott Balys
Several recent hearings on Capitol Hill have highlighted the work of CDFIs and their ability to reach underserved markets. These hearings are an example of the increasing interest in CDFIs in the “new D.C.” and the expanded role that policymakers are looking to CDFIs to play in ensuring an equitable economic recovery.
Leadership from Wells Fargo, Goldman Sachs, Citigroup, JPMorgan Chase, Bank of America, and Morgan Stanley all testified before both the Senate Banking, Housing, and Urban Affairs Committee (May 26) and the House Financial Services Committee (May 27). Each of the witnesses specifically called out their partnerships with CDFIs and highlighted CDFI work in their testimony. Congressional leaders also focused on the partnership between banks and CDFIs in their questions. Senator Chris Van Hollen (D-MD) specifically asked bank CEOs about CDFIs need for equity capital.
Federal Agency Oversight
In addition to the hearings with bank executives, several Congressional committees recently held oversight hearings for programs at the Small Business Administration (SBA) and Department of the Treasury. During these hearings Treasury Secretary Yellen and SBA Administrator Guzman both spoke about their agencies’ work with CDFIs.
In her testimony (May 28), Administrator Guzman focused on the success of the Paycheck Protection Program (PPP) and how community financial institutions were integral in reaching small business owners across the country. Community financial institutions exceeded their set aside in PPP, and three OFN members were in the top ten of 2021 PPP lenders.
Secretary Yellen’s testimony (May 27) highlighted how CDFIs are “very effective at injecting capital into areas the financial sector hasn’t traditionally served well” and expressed her support for the expanded funding CDFIs received through the COVID-19 relief bill passed in December 2020. Several Members of Congress asked Secretary Yellen about the supplemental resources and encouraged Treasury to get the resources to CDFIs as quickly and responsibly as possible.