House of Representatives Passes Chairman Cleaver’s Bill to Spur Economic Development in Underserved Communities

(Washington, D.C.) – Today, the House of Representatives passed H.R. 2543, the Financial Services Racial Equity, Inclusion, and Economic Justice Act, a package of several bills from the House Financial Services Committee focused on promoting racial and economic justice. Included in the legislation was H.R. 7733, the CDFI Bond Guarantee Program Improvement Act, a bill introduced by U.S. Representative Emanuel Cleaver, II (D-MO), Chair of the Financial Services Subcommittee on Housing, Community Development, and Insurance. The CDFI Bond Guarantee Program Improvement Act would stimulate greater economic development in underserved communities by reauthorizing the CDFI Bond Guarantee Program for four years and implementing reforms to ensure smaller Community Development Financial Institutions (CDFIs) can access the program, giving support to more community development projects in the most economically distressed areas.

"According to the Federal Reserve, Black and Latino households earn about half as much as the average White household and own only 15 to 20 percent as much net wealth. As the United States continues to build back from the global pandemic, my colleagues on the Financial Services Committee and I are committed to ensuring our economic recovery is equitable and enjoyed by every community across the nation, including those who have been traditionally underserved by the financial system," said Congressman Cleaver. "That's why I am extraordinarily proud to have worked on the Financial Services Racial Equity, Inclusion, and Economic Justice Act, which would expand access to credit and critical financial services, support minority-owned small businesses, and strengthen Minority Depository Institutions and Community Development Financial Institutions that have a proven track record of serving our most underserved communities."

"And I am particularly proud that my bipartisan CDFI Bond Guarantee Program Improvement Act was included in the bill passed by the House of Representatives today—which would help to spur much needed economic development in rural, minority, and low-income communities by reauthorizing the CDFI Bond Guarantee Program and lowering the minimum issuance threshold to allow more CDFIs to participate in this successful program," said Congressman Cleaver. "I have long prided myself on reaching across the aisle to get things done for the people of Missouri's Fifth District. With this bill's bipartisan support, I'm hopeful my colleagues in the Senate will quickly send it to the President's desk for signature."

The CDFI Bond Guarantee Program was created in 2010 to provide long-term capital to CDFIs across the country at no expense to American taxpayers. While the program's authorization lapsed in 2014, it has been extended on a year-by-year basis through annual appropriations legislation. As currently codified, CDFI borrowers must have a loan size of at least $100 million to participate in the program—which allows for only relatively large and often complex multi-party applications.

The CDFI Bond Guarantee Program Improvement Act would reauthorize the CDFI Bond Guarantee Program for another four years and lower the minimum loan threshold to $25 million, enabling smaller CDFIs to access the benefits of the program and stimulate additional community development projects in rural, urban, and Tribal communities across the country.

The Financial Services Racial Equity, Inclusion, and Economic Justice Act is endorsed by Americans for Financial Reform, Asian Real Estate Association of America, Center for LGBTQ Economic Advancement & Research, Center for Responsible Lending, CDFI Coalition, NAACP, National Association of Latino Community Asset Builders, National Bankers Association, National Housing Law Project, National Consumer Law Center, National Rural Housing Coalition, National Housing Resource Center, and more.

Official text of the Financial Services Racial Equity, Inclusion, and Economic Justice Act is available here.

Official text of the CDFI Bond Guarantee Program Improvement Act is available here.

Emanuel Cleaver, II is the U.S. Representative for Missouri's Fifth Congressional District, which includes Kansas City, Independence, Lee's Summit, Raytown, Grandview, Sugar Creek, Blue Springs, Grain Valley, Oak Grove, North Kansas City, Gladstone, Claycomo, and all of Ray, Lafayette, and Saline Counties. He is a member of the exclusive House Financial Services Committee; Chairman of the House Subcommittee on Housing, Community Development, and Insurance; member of the Select Committee on the Modernization of Congress; member of the Committee on Homeland Security; and a Senior Whip of the Democratic Caucus. A high-resolution photo of Conressman Cleaver is available here.