Along with reviving the Paycheck Protection Program, the COVID-19 aid bill that Congress is expected to vote on today would provide additional funding for Minority Depository Institutions (MDIs) and Community Development Financial Institutions (CDFIs).

Congressional leaders have hashed out a massive, year-end catchall bill that combines $900 billion in COVID-19 aid with a $1.4 trillion omnibus spending bill and reams of other unfinished legislation on taxes, energy, education and health care. The huge, still-unreleased bill is slated for votes on Monday – with lawmakers having only a few hours to read it before casting their votes.

The proposed legislation revives the Paycheck Protection Program, which provides forgivable loans to qualified businesses. Especially hard-hit businesses that received PPP grants would be eligible for a second round. The program would receive $284 billion. The bill also ensures that PPP subsidies are not taxed.

Lenders in low- and moderate-income communities would also receive funding. According to a statement from the U.S. House Committee on Financial Services, minority depository institutions and community development financial institutions would receive $12 billion in emergency capital investment and support.

In the statement, the Financial Services Committee pointed to the role of MDIs and CDFIs in providing affordable lending options to economically disadvantaged individuals, including those in low- and moderate-income and minority communities.

“When the COVID-19 pandemic further disadvantaged these communities, CDFIs and MDIs maintained their focus on helping businesses in their target areas minimize the economic impacts,” the statement said.

The proposed legislation includes $9 billion for MDIs and CDFIs that are depository institutions as part of an emergency capital investment program that would be administered by the U.S. Treasury Department. The program would provide low-cost, long-term capital investments.

The program would require participants to develop and comply with a plan to maintain or expand significant lending or investment activity in LMI minority communities, especially those disproportionately impacted by COVID-19, and minorities with significant unmet capital or financial services needs, according to the committee’s statement.

The program would also ensure access to capital for small CDFIs and MDIs by setting aside $4 billion for institutions with under $2 billion in total assets, including $2 billion set aside for institutions with under $500 million in total assets.

The bill also includes $3 billion in emergency support through the CDFI Fund. The funds would support grants and other financial and technical assistance to CDFIs, including CDFI loan funds, as they serve consumers, small businesses, and nonprofits in their communities responding to the coronavirus pandemic.

The funding would include $1.25 billion for the current fiscal year for the CDFI Fund to award grants and other financial assistance to help CDFIs serve their communities responding to the economic hardships created by the pandemic.

Another $1.75 billion of these funds would be available until they are expended to provide additional grants and financial assistance to CDFIs. Of these funds, $1.2 billion would be reserved for “minority lending institutions,” a new category of CDFIs that predominantly serve minority communities and are either MDIs or meet other standards for accountability to minority populations as determined by the CDFI Fund.

These provisions had previously been introduced in a House bill by Rep. Maxine Waters, chair of the House Financial Services Committee.

“For decades, I have worked to help our nation’s minority depository institutions and community development financial institutions,” Waters said in a separate statement. “CDFIs and MDIs are critical sources of capital and investment for our nation’s low-income communities and for communities of color and they need additional resources and tools to help them to support the communities they serve.”

The Associated Press contributed to this report.

CDFIs, MDIs Would Receive $12M in Investments and Support

by Diane McLaughlin time to read: 2 min