Starkville Daily News
CDBA Announces New $1 Billion CDFI Tax Credit Bill to Boost Main Street Investment in Underserved Communities
Sen. Mark Warner, Senate Colleagues and Community Development Bankers Association Steward Historic Bi-Partisan Legislation
By The Community Development Bankers Association (CDBA) via Business Wire
On June 16, 2022, The Community Development Bankers Association (CDBA) announced a new tax credit bill with U.S. Sen. Mark R. Warner (D-VA), joined by Sens. 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 that will attract private sector investors that make equity, equity-equivalent investments, or long-term patient capital to benefit CDFIs of all types including banks, credit unions, venture capital funds, and loan funds, while providing institutions with the maximum flexibility and financial support.
Warner has been a leader in Congress for CDFIs and Minority Depository Institutions (MDIs). In July of 2020, Warner teamed up with a bipartisan group of Senators to introduce the Jobs and Neighborhood Investment Act. In 2021, Sen. Warner and U.S. House Financial Services Committee Chairwoman, Maxine Waters secured provisions from the bill in the Coronavirus Response and Relief Supplemental Appropriations Act, which was signed into law, funding an unprecedented $12 billion in funding for CDFIs.
“As a former entrepreneur and venture capitalist, I know that talent and ambition is not confined by income bracket or zip code. Unfortunately, access to start-up capital often is. CDFIs and MDIs do the invaluable work of bridging the gap and reaching small businesses in our most vulnerable communities – a role that became even more critical during the pandemic,” said Sen. Warner.
“As the national trade association for community development banks, Community Development Bankers Association (CDBA) is proud to have led the advocacy efforts for the new CDFI Tax Credit Investment Act. In addition to another recent victory for the communities served by CDFI banks – the U.S. Treasury’s $9 Billion Emergency Capital Investment Program (ECIP) – this tax credit will strengthen CDFIs serving at the grassroots, supporting the most vulnerable and disinvested communities in the U.S. This tool will be a game changer by attracting private capital to Main Street where it’s needed most.'' said Jeannine Jacokes, Chief Executive Officer, CDBA.
In addition to the CDBA, this legislation has the support of a number of organizations, including National Association of Affordable Housing Lenders, Community Development Venture Capital Alliance, LISC, OFN, CDFI Coalition, Inclusiv, and the Enterprise Community Loan Fund, among others.