Peters Introduces Bill to Increase Access to Capital for Financial Institutions that Support Small Business Owners, Consumers in Minority Communities
DETROIT, MI – U.S. Senator Gary Peters (MI) today announced he introduced a bill that would increase access to capital for community investment institutions working to support small business owners and consumers through the Coronavirus pandemic in minority communities. The Community Capital Investment Act would establish a Treasury Department program to provide community investment institutions, such as Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), community banks and credit unions, in historically underserved communities with critical direct capital investments and loans. Although recent measures to support these institutions were approved in the latest round of Coronavirus relief legislation, those limited resources were exhausted within 48 hours of their availability.
“After seeing how financial relief from the CARES Act was allocated, it is clear we must do more to address the shortage of resources provided to underserved communities,” said Senator Peters, a member of the Commerce, Science and Transportation Committee. “This bill would support the financial institutions that are dedicated to helping small business owners and consumers in communities of color in Michigan and across the nation navigate this unprecedented economic crisis. I will be pushing for this measure to be included in the next Coronavirus relief package.”
The legislation would specifically direct a new Community Capital Investment Program to grant capital injections and loans in community investment institutions on an as-needed basis. Community investment institutions include CDFIs, MDIs, and credit unions and banks that have under $10 billion in assets and provide at least half of their loans to low-income borrowers.
Specifically, the loans would be interest-free, have a loan term of 5 years and do not require payment for a 6-month period beginning on the date the loan is made, or a longer term period as designated by the Treasury Secretary. The Treasury Department would begin accepting applications for capital investments and loans under the program within 10 days of the bill’s enactment.
Peters has led numerous measures to increase resources provided to minority communities to combat the pandemic. Last month, Peters successfully led the charge to secure funding that was enacted last month as part of Coronavirus relief legislation that allotted dedicated funding for small community-based lenders, including CDFIs and MDIs. The legislation included $60 billion dedicated to small lenders and community-based financial institutions to serve the needs of unbanked and undeserved small businesses and non-profits. Of that funding, $30 billion was to specifically assist CDFIs, MDIs and other community-focused lenders. This came after the Treasury Department found that only 78 of 950 CDFIs participated in the first round of Small Business Paycheck Protection Program funding, largely impacting minority-owned businesses including those in low-income communities.
Earlier this month — through his role as Ranking Member of the Senate Homeland Security and Governmental Affairs Committee — Peters introduced a bill that would establish the Office of Equal Rights and Community Inclusion at FEMA to increase access to and improve the quality of disaster assistance for communities of color, and eliminate racial and ethnic disparities in the delivery of disaster assistance. Peters also helped introduced legislation that would establish an interagency task force focused on identifying and addressing disparities that are disproportionately affecting minority communities in Michigan during the Coronavirus pandemic.
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