CDFI Bond Guarantee Program Improvement Act of 2022

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 7733) to amend the Community Development Banking and Financial Institutions Act of 1994 to reauthorize and improve the community development financial institutions bond guarantee program, and for other purposes, as amended.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on this legislation and to insert extraneous material thereon.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I support H.R. 7733, the CDFI Bond Guarantee Program Improvement Act, led by Representative Cleaver, who also is the chair of the Subcommittee on Housing, Community Development, and Insurance.

The CDFI Fund's Bond Guarantee Program provides CDFIs with federally guaranteed, long-term, low-cost capital to support existing and new economic development projects in their communities.

Unfortunately, small-sized CDFIs currently have difficulty applying for this financing directly because the current $100 million minimum financing amount is much higher than the amount many small CDFIs are seeking. As a result, some CDFIs can only access the program by applying with larger CDFIs.

This bill would lower the minimum threshold for a bond issuance from $100 million to $25 million, giving smaller CDFIs a fairer shot at being able to access this program. This will help expand financing and investments to support small businesses, healthcare facilities, and affordable housing.

This bill builds upon the work I led last Congress to provide CDFIs with $12 billion in equity and grant funding. In particular, that legislation, which has already distributed $1.25 billion to CDFIs, represented the largest public investment in CDFIs ever.

Mr. Cleaver's bill complements those efforts by helping smaller CDFIs better access private dollars to further their efforts to serve low- income and underserved communities.

While the Bond Guarantee Program's authorization ended in 2014, Congress has extended it on a year-by-year basis in annual appropriations bills. This bill would extend the program for 4 years, creating longer-term certainty. The bill also includes studies to examine areas where the program can be strengthened.

Furthermore, this bill is a House companion to a bipartisan bill in the Senate, S. 3441, introduced by Senators Tina Smith and Mike Rounds.

I urge my colleagues to support this bill to ensure that more CDFIs have access to long-term financing through the Bond Guarantee Program so they continue to spur economic development in communities across the Nation.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 3 minutes to the gentleman from Missouri (Mr. Cleaver).

Mr. Speaker, I yield myself the balance of my time.

H.R. 7733 is supported by a number of groups, including the CDFI Coalition, Credit Union National Association, Independent Community Bankers of America, National Association of Federally-Insured Credit Unions, National Community Reinvestment Coalition, and Opportunity Finance Network.

Mr. Speaker, I urge my colleagues to support this bill, and I yield back the balance of my time.

Mr. Speaker, I thank Chairwoman Waters for her longstanding support of CDFIs.

I speak today in support of my bill, the CDFI Bond Guarantee Program Improvement Act of 2022, which would open up a significant source of long-term, low-cost capital to support CDFI projects in low-income urban, rural, and indigenous areas of the country.

Community development financial institutions, CDFIs, deliver critical lending opportunities to low- and moderate-income communities and communities of color. CDFIs are banks, credit unions, and other financial institutions that provide products and services specifically aimed at the needs of low-income and marginalized communities and are certified by the CDFI fund, which is operated by the United States Department of the Treasury.

CDFIs support people and businessowners in underserved communities by providing affordable capital to communities typically excluded from the mainstream financial system. According to Treasury, in 2019, 33 percent of CDFI lending was in high poverty areas, nearly 75 percent of lending was to underserved populations and distressed areas, and 17 percent was to rural areas. I think that ought to make all the people committed to this concept of everybody participating quite happy.

CDFIs in my district, including Central Bank of Kansas City, LISC of Greater Kansas City, AltCap, and others, are instrumental in the effort to narrow the racial wealth gap and increase financial opportunities in underserved communities. However, we know that the high demand for CDFI services far exceeds available funding.

One tool the Federal Government has to support CDFIs in their mission is by making significant capital for economic development available to CDFIs through the bond guarantee program. Enacted through the Small Business Administration, the CDFI bond guarantee program is administered by Treasury, which guarantees bonds issued by qualified issuers and injects new and substantial capital into our Nation's most distressed communities.

Unlike CDFI fund programs, the bond guarantee program does not offer grants or direct loans but is instead a Federal credit subsidy that is designed to be repaid and function at no cost to the taxpayers.

Since inception, the bond guarantee program has guaranteed over $1.7 billion in bonds used to finance schools, not-for-profit facilities, small businesses, healthcare facilities, and commercial and residential real estate, among others.

My bill, H.R. 7733, endorsed by the CDFI Coalition, Community Reinvestment Fund, Opportunity Finance Network, and others, would recognize and reauthorize this program.

The bill was a bipartisan effort and unanimously voted out of our committee. Mr. Speaker, I thank Chairwoman Waters, Ranking Member McHenry, and my colleagues for partnership on this legislation, and I urge swift passage today.

Mr. Speaker, I yield myself such time as I may consume.

I thank my colleague from Missouri, Mr. Cleaver, for offering this bill and for working with Republicans on the Financial Services Committee to make it a better bill.

H.R. 7733, as amended through bipartisan negotiations, would lower the CDFI Fund's Bond Guarantee Program minimum issuance threshold from $100 million to $25 million. It would also require the Secretary of the Treasury to review the effectiveness of the CDFI Bond Guarantee Program and report its findings to Congress; and the program would sunset after 4 years allowing Congress adequate time to make adjustments and ensure proper stewardship of taxpayer dollars.

This increased accountability will allow Congress to make certain that the programs that we authorize match the needs of the communities to be served.

Mr. Speaker, I urge my colleagues to support this bill, and I reserve the balance of my time.

Mr. Speaker, I urge my colleagues to support H.R. 7733, and I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.