CDBA Announces New $1 Billion CDFI Tax Credit Bill to Boost Main Street Investments in Underserved Communities

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WASHINGTON–(BUSINESS WIRE)–On June 16, 2022, the Community Development Bankers Association (CDBA) announced a new tax credit bill with U.S. Senator Mark R. Warner (D-VA)joined by Meaning. Roger Wicker (R-MS), Chris Van Hollen (D-MD)and Cindy Hyde-Smith (R-MS)), introducing bipartisan legislation to promote economic prosperity in low-income communities across America through Community Development Financial Institutions (CDFIs).

This bill creates a CDFI investment tax credit which will attract private sector investors who make equity, equity equivalent or long-term patient capital investments for the benefit of CDFIs of all types, including banks, credit unions, equity funds- risk and loan funds, while providing institutions with maximum flexibility and funding. Support.

Warner has been a congressional leader for CDFIs and Minority Depository Institutions (MDIs). In July 2020, Warner partnered with a bipartisan group of senators to introduce the Neighborhood Employment and Investment Act. In 2021, Senator Warner and Maxine Waters, Chair of the US House Financial Services Committee guaranteed provisions of the bill in the Coronavirus Response and Relief Supplementary Appropriations Actwhich was signed into law, funding an unprecedented $12 billion in funding for CDFIs.

“As a former entrepreneur and venture capitalist, I know talent and ambition aren’t limited to an income bracket or zip code. Unfortunately, access to start-up capital is. CDFIs and MDIs do invaluable work in bridging the gap and reaching small businesses in our most vulnerable communities – a role that has become even more critical during the pandemic,” said Senator Warner.

“As the national trade association for Community Development Banks, the Community Development Bankers Association (CDBA) is proud to have led the advocacy efforts for the new Credit Investment Act. CDFI tax. In addition to another recent win for communities served by CDFI banks – the US Treasury’s $9 billion Emergency Capital Investment Program (ECIP) – this tax credit will bolster CDFIs serving the grassroots, supporting the most vulnerable and disengaged communities in the United States. This tool will be a game-changer by bringing private capital to the main street, where it is needed most. ” said Jeannine Jacobes, CEO, CDBA.

In addition to the CDBA, this legislation has the support of a number of organizations, including National Association of Affordable Housing Lenders, Venture Capital Alliance for Community Development, ISCL, OFN, CDFI Coalition, Inclusiveand the Business Community Loan Fundamong others.

The text of the invoice is available here. A page of the bill is available here. To learn more about CDBA, please visit www.cdbanks.org


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