Sen. Warner, Colleagues Reintroduce Bill to Boost Economic Growth in Underserved, Low-Income Communities Through CDFIs

This week, U.S. Sen. Mark R. Warner (D-VA), joined by Sens. Roger Wicker (R-MS), Chris Van Hollen (D-MD), Cindy Hyde-Smith (R-MS), Gary Peters (D-MI), and Jerry Moran (R-KS), reintroduced bipartisan legislation to promote lasting economic prosperity in low-income, minority, and rural communities. The Community Development Investment Tax Credit would help unlock more equity and long-term financial capital for community development financial institutions (CDFIs). CDFIs often serve as a backbone for underserved communities including small and disadvantaged businesses, which tend to have fewer banking relationships and less access to credit.

“As someone who worked in the business world long before I ever joined politics, I know well that talent and ambition are not confined by income bracket or zip code. Unfortunately, access to start-up capital often is. CDFIs do the invaluable work of bridging the gap and reaching small businesses in our most vulnerable communities, and we have seen historic investments on this front over the past few years,” said Sen. Warner. “Despite this progress, CDFIs remain in need of additional equity and capital to continue serving their communities. This legislation will create a new tax credit, helping spur important private-sector investments and allowing these community lenders to grow.”

Your League supports efforts to aid CDFIs. We worked during this past session of the General Assembly to win passage and enactment of a measure that codifies the Virginia Community Development Financial Institutions (CDFI) Fund. We worked closely with member credit unions and others to host a CDFI awareness event last February that drew key lawmakers and Lt. Gov. Winsome Earle-Sears.

CDFIs are specialized community-based financial institutions with a primary mission to promote economic development by providing financial products and services to people and communities underserved by traditional financial institutions, particularly in low-income communities. In addition to community development credit unions and banks, CDFIs can also be non-regulated institutions such as non-profit loan funds or venture capital funds. Virginia has 22 Community Development Financial Institutions (CDFIs), including six credit unions.

In 2021, the Virginia General Assembly passed a $10 million budget amendment that established and funded the VA CDFI Fund, to be administered by the Virginia Department of Housing and Community Development (DHCD). The purpose of this fund is to support Virginia-based Community Development Financial Institutions (CDFIs) and build their capacity to support communities and businesses across the state. VCDC’s lending affiliate, VCDF, collaborated with a group of CDFIs to form the Virginia CDFI Coalition, which, among other things, is actively involved with the state agencies responsible for deploying the fund.