Senate Holds Hearing on Community Development Financial Institutions (CDFIs) and Underserved Communities
On Wednesday, the Senate Banking, Housing and Urban Affairs Subcommittee on Housing, Transportation, and Community Development held a hearing titled, “Exploring How CDFIs Support Underserved Communities.” The witnesses for the hearing included John Holdsclaw IV, President, CDFI Coalition, Frank Altman, Founder and CEO, Community Reinvestment Fund, USA, and Lakota Vogel, Executive Director, Four Bands Community Fund. During their testimonies, witnesses highlighted recommendations to the subcommittee, including increased capital from the CDFI Fund, improvements to existing programs like the Bond Guarantee Program, and recommendations around the CDFI certification process. Throughout the hearing, members of the subcommittee voiced their support for several CDFI priority issues. Senator Steve Daines (R-MT) expressed his support for making the New Markets Tax Credit permanent and asked witnesses to discuss the benefits of making the program permanent. Senator Van Hollen (D-MD) voiced his support for the CDFI Fund, the implementation of the $1.25 billion Rapid Response Program and the $9 billion Emergency Capital Investment Program.
Chairwoman of the subcommittee, Senator Tina Smith (D-MN), and Ranking Member Mike Rounds (R-SD), also highlighted their recently introduced bill that seeks to improve access to the Bond Guarantee Program. The CDFI Bond Guarantee Program Improvement Act (S. 3441) would make the CDFI Bond Guarantee Program permanent, while making it more reliable and accessible to smaller CDFIs. This legislation would expand and improve a successful program that operates without a taxpayer subsidy and allows CDFIs to access long-term, stable funding. The CDFI Bond Guarantee Program was enacted in 2010 to provide long-term, low-cost capital to CDFIs, which use the funding for economic development activities in underserved communities. The program’s authorization lapsed in 2014, but it has been extended on a year-by-year basis in annual appropriations bills. Under current program rules, borrowers must have a loan size of at least $100 million – which means that the program can only be used for relatively large projects. The CDFI Bond Guarantee Program Improvement Act would permanently authorize the program, to provide certainty to borrowers and lenders. It would also reduce the minimum loan size to $25 million, to allow smaller CDFI to utilize the program and to support more community development projects. “Unequal access to capital and financial services is a key driver of economic disparity in rural areas, communities of color, and Indigenous communities. This legislation can jumpstart economic development in these communities by expanding and enhancing a program with a track record of effective capital investment and community development.” said Senator Smith. The bill has been referred to the full Senate Committee on Banking, Housing and Urban Affairs.
To view the full Senate hearing, click here.
Alanna McCargo Sworn in as Ginnie Mae President
On Monday, Alanna McCargo was sworn in by HUD Secretary Marcia Fudge to become Ginnie Mae’s 18th President. McCargo is the first Senate confirmed President for Ginnie Mae in nearly five years, and the confirmation is historic as she is the first woman in Ginnie Mae’s history to hold this position. Prior to her confirmation as President, McCargo was Senior Advisor for Housing Finance to Secretary Fudge. Before joining HUD, McCargo was Vice President of the Housing Finance Policy Center at the Urban Institute where she led and developed evidence-based research and analysis on the U.S Housing Finance system. She helped to advance the national policy conversation around reducing racial homeownership and wealth gaps and removing barriers to accessing credit and capital. McCargo also served as Executive Director of the Mortgage Servicing Collaborative, a cross-sector initiative that identified and developed policy recommendations for mortgage servicing and securitization reforms to enable stability for the housing finance system through all economic cycles. “It is an honor to lead Ginnie Mae through its next phase of transformation, ensuring our MBS remains a secure, nimble, and reliable vehicle to support the U.S. mortgage market and continues to make affordable homeownership and rental housing available for millions of households and our veterans,” said McCargo. “I am joining a solid and committed team that has maintained stability and results for the American people through the pandemic and very trying economic times. I look forward to working with the team and Secretary Fudge to strengthen Ginnie Mae’s impact and advance our important mission.”
To view Alanna McCargo’s full biography, click here.