Sec. 802. 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 4,800,000 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 12,000,000 more persons who have lost their job; and an estimated 36 percent of renters and 4,100,000 homeowners who are struggling to pay their rent and mortgages. According to the Centers for Disease Control and Prevention, 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 (in this section referred to as CDFIs ) and minority depository institutions (in this section referred to as MDIs ) have delivered needed capital and relief to underserved communities, many of which have borne a disproportionate impact of the COVID–19 pandemic.
Through August 8, 2020, CDFIs and MDIs have provided more than $16,400,000,000 in loans under the Paycheck Protection Program under section 7(a)(36) of the Small Business Act ( 15 U.S.C. 636(a)(36) ) to small businesses with a smaller median loan size of about $74,000 compared to the overall program median loan size of $101,000. 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 (in this section referred to as the CDFI Fund ) is an agency of the Department of the Treasury and was established by the Community Development Banking and Financial Institutions 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 September 15, 2020, there were 1,137 certified CDFIs in all 50 States, the District of Columbia, Guam, and the Commonwealth of Puerto Rico. Following the 2008 financial crisis and the disproportionate impact the Great Recession had on minority communities, the number of MDIs that are banks fell more than 30 percent over the following decade, to 143 as of the second quarter of 2020. Meanwhile, MDIs that are credit unions have seen similar declines, with more than one-third of such institutions disappearing since 2013.
The following is the sense of the Congress: The Department of the Treasury, Board of Governors of the Federal Reserve System, Small Business Administration, 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 MDIs and CDFIs in the near term, especially as they carry out programs to respond to the COVID–19 pandemic, and the long term.
The Board of Governors of the Federal Reserve System should, consistent with its mandates, work to increase lending by MDIs and CDFIs to underserved communities, and when appropriate, should work with the Department of the Treasury to increase lending by MDIs and CDFIs to underserved communities. The Department of the Treasury and prudential regulators should establish a strategic plan identifying concrete steps that they can take to support existing MDIs, as well as the formation of new MDIs consistent with the goals established in section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ( 12 U.S.C. 1463 note) to preserve and promote MDIs.
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, the CDFI Fund, Federal prudential regulators, the Small Business Administration, and other Federal agencies to ensure they fulfill their obligations under the law as well as implement this title and other laws in a manner that supports and fully utilizes MDIs and community development financial intuitions, as appropriate.
The investments made by the Secretary of the Treasury under this title and the amendments made by this title should be designed to maximize the benefit to low- and moderate-income and minority communities and contemplate losses to capital of the Treasury.
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