Menendez Continues Advocacy for Access to Capital for Underserved Communities through CDFIs During Banking Subcommittee Hearing

Source: United States Senator for New Jersey Bob Menendez

WASHINGTON, D.C.–U.S. Senator Bob Menendez (D-N.J.), a senior member of the Senate Banking Committee, continued his decades-long advocacy to support access to capital for underserved communities through Community Development Financial Institutions (CDFIs) as Congress works to finalize the Build Back Better Act. During a Subcommittee hearing Wednesday, Sen. Menendez pointed out the many ways in which CDFIs provided much-needed assistance to minority- and women-owned businesses hit hardest by the COVID-19 pandemic, as well as supported the creation of key community services such as housing, childcare centers and health facilities.

“Throughout the pandemic we saw that minority- and woman-owned small businesses were hit particularly hard. At the same time, we saw the vast majority of funding under the Paycheck Protection Program go not to these businesses that were the most affected, but to predominantly white-owned businesses with preexisting relationships with banks,” said Sen. Menendez, while questioning CDFI industry representatives. “What lessons did you learn from the pandemic that can be taken forward to mitigate disproportionate harm to minority and woman owned businesses in future crises?”

Providing greater access to the financial system is one of the most effective ways CDFIs can foster strong development in traditionally marginalized communities. CDFIs have proven to successfully attract private sector investments in disadvantaged communities to spur economic activity and job creation, grow small businesses and revitalize neighborhoods.

The Build Back Better Act currently being debated by Congress contains many crucial investments in community development. The House-passed version of the bill provides $2.2 billion dollars to eligible institutions, including CDFIs, to assist first-time, first-generation homebuyers, which aims to address the racial wealth gap. It also contains $3 billion dollars for these institutions for community facilities and other housing and civic infrastructure.

Sen. Menendez has long-been committed to supporting the work of CDFIs and annually leads the CDFI Funding Appropriations Request Letter to the Senate Appropriations Committee. Last June, Sen. Menendez and Sen. Cory Booker (both D-N.J.) announced the awarding of $6,335,530 in federal funding to support several New Jersey Community Development Financial Institutions (CDFIs) and their efforts to spur economic activity in underserved communities that were disproportionately affected by the COVID-19 pandemic. In 2020, Sen. Menendez introduced the Coronavirus CDFI Funding Act, which would have injected an additional billion dollars to the CDFI Find to support low income, rural and urban communities affected by the pandemic. Over a decade ago, Sen. Menendez fought for the passage of the Small Business Jobs Act of 2010 which includes the CDFI Bond Guarantee Program which allows CDFIs to access long-term, low-cost capital to jumpstart economic growth and community development, all at no cost to taxpayers. As part of the legislative package, Senator Menendez secured inclusion of the Full Faith and Credit in our Communities Act, legislation he authored, which will ensure communities and small businesses have access to the capital they need to grow.