Cdfi Bond Guarantee Program Improvement Act of 2022

Floor Speech

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Ms. WATERS. 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.

The Clerk read the title of the bill.

The text of the bill is as follows: H.R. 7733

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.

This Act may be cited as the ``CDFI Bond Guarantee Program Improvement Act of 2022''. SEC. 2. SENSE OF CONGRESS.

It is the sense of Congress that the authority to guarantee bonds under section 114A of the Community Development Banking and Financial Institutions Act of 1994 (12 U.S.C. 4713a) (commonly referred to as the ``CDFI Bond Guarantee Program'') provides community development financial institutions with a sustainable source of long-term capital and furthers the mission of the Community Development Financial Institutions Fund (established under section 104(a) of such Act (12 U.S.C. 4703(a)) to increase economic opportunity and promote community development investments for underserved populations and distressed communities in the United States. SEC. 3. GUARANTEES FOR BONDS AND NOTES ISSUED FOR COMMUNITY OR ECONOMIC DEVELOPMENT PURPOSES.

Section 114A of the Community Development Banking and Financial Institutions Act of 1994 (12 U.S.C. 4713a) is amended--

(1) in subsection (c)(2), by striking ``, multiplied by an amount equal to the outstanding principal balance of issued notes or bonds'';

(2) in subsection (e)(2)(B), by striking ``$100,000,000'' and inserting ``$25,000,000''; and

(3) in subsection (k), by striking ``September 30, 2014'' and inserting ``the date that is 4 years after the date of enactment of the CDFI Bond Guarantee Program Improvement Act of 2022''. SEC. 4. REPORT ON THE CDFI BOND GUARANTEE PROGRAM.

Not later than 1 year after the date of enactment of this Act, and not later than 3 years after such date of enactment, the Secretary of the Treasury shall issue a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate on the effectiveness of the CDFI bond guarantee program established under section 114A of the Community Development Banking and Financial Institutions Act of 1994 (12 U.S.C. 4713a).

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.

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.

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