Sec. 2. Findings; Sense of Congress

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The Congress finds the following: The Coronavirus 2019 (COVID–19) pandemic and the resulting recession have led to more than 4.8 million cases and at least 157,000 deaths in the United States as of August 6, 2020; a 7.6 percent increase in the unemployment rate from February to June, or approximately 12 million more persons who have lost their job; and an estimated 36 percent of renters and 4.1 million homeowners who are struggling to pay their rent and mortgages. According to the Centers for Disease Control, long-standing systemic health and social inequities have put some members of racial and ethnic minority groups at increased risk of getting COVID–19 or experiencing severe illness .

Minority-owned businesses are also facing more difficult economic circumstances than others as a result of the COVID–19 pandemic. In April 2020, the Federal Reserve Bank of New York reported that minority- and women-owned businesses were not only more likely to show signs of limited financial health, but also twice as likely to be classified as at risk or distressed than their non-minority counterparts. During the Coronavirus 2019 (COVID–19) pandemic, community development financial institutions (CDFIs) and minority depository institutions

(MDIs)have delivered needed capital and relief to underserved communities, many of which have borne a disproportionate impact of the COVID–19 pandemic. Through July 31, 2020, CDFIs and MDIs have provided more than $16.2 billion in Paycheck Protection Program

(PPP)loans to small businesses with a smaller median loan size of about $75,000 compared to the overall program median loan size of $103,000. 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. CDFIs and MDIs are reaching underserved communities and minority-owned businesses at a critical time. The Community Development Financial Institutions Fund (CDFI Fund) is an agency of the U.S. Department of the Treasury 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 . As of July 13, 2020, there were 1,129 certified CDFIs in all 50 States, District of Columbia, Guam, and Puerto Rico. Following the 2008 financial crisis and the disproportionate impact the Great Recession had on minority communities, the number of MDI banks fell more than 30 percent over the following decade, to 143 as of the first quarter of 2020. Meanwhile, MDI credit unions have seen similar declines, with more than one-third of such institutions disappearing since 2013. The Committee on Financial Services of the House of Representatives has examined the importance of CDFIs and MDIs through three hearings held during the 116th Congress. At these hearings, the Committee received testimony from 13 witnesses, most of whom were representatives of CDFIs or MDIs, and four of whom were Federal regulators. These hearings include: October 22, 2019, An Examination of the Decline of Minority Depository Institutions and the Impact on Underserved Communities . November 20, 2019, An Examination of Regulators’ Efforts to Preserve and Promote Minority Depository Institutions . June 3, 2020, Virtual Hearing— Promoting Inclusive Lending During the Pandemic: Community Development Financial Institutions and Minority Depository Institutions . At these hearings, the Committee discussed the opportunities and challenges facing CDFIs and MDIs. The Committee discussed 9 different pieces of legislation to address some of these challenges and fully support the work of MDIs and CDFIs. The following is the sense of the Congress: The Department of the Treasury, Board of Governors of the Federal Reserve System, Small Business Administration (SBA), Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, National Credit Union Administration, and other Federal agencies should take steps to support, engage with, and utilize minority depository institutions and community development financial institutions in the near term, especially as they carry out programs to respond to the COVID–19 pandemic, and the long term. The Department of the Treasury and prudential regulators should establish a strategic plan identifying concrete steps that they can take to support existing minority depository institutions, as well as the formation of new minority depository institutions consistent with the goals established in the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) to preserve and promote minority depository institutions. Congress should increase funding and make other enhancements, including those provided by this legislation, to enhance the effectiveness of the CDFI Fund, especially reforms to support minority-owned and minority led CDFIs in times of crisis and beyond. Congress should conduct robust and ongoing oversight of the Department of the Treasury, CDFI Fund, Federal prudential regulators, SBA, and other Federal agencies to ensure they fulfill their obligations under the law as well as implement this Act and other laws in a manner that supports and fully utilizes minority depository institutions and community development financial intuitions, as appropriate.