Lansing, Mich. (WLNS) — Senator Gary Peters has introduced a bill that would increase access to capital for community investment institutions working to support small business owners and consumers through the Coronavirus pandemic in minority communities.
The Community Capital Investment Act would establish a Treasury Department program to provide community investment institutions, such as Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), community banks and credit unions, in historically underserved communities with critical direct capital investments and loans.
Although recent measures to support these institutions were approved in the latest round of Coronavirus relief legislation, those limited resources were exhausted within 48 hours of their availability.
“After seeing how financial relief from the CARES Act was allocated, it is clear we must do more to address the shortage of resources provided to underserved communities,” said Senator Peters, a member of the Commerce, Science and Transportation Committee. “This bill would support the financial institutions that are dedicated to helping small business owners and consumers in communities of color in Michigan and across the nation navigate this unprecedented economic crisis. I will be pushing for this measure to be included in the next Coronavirus relief package.”
The legislation would specifically direct a new Community Capital Investment Program to grant capital injections and loans in community investment institutions on an as-needed basis. Community investment institutions include CDFIs, MDIs, and credit unions and banks that have under $10 billion in assets and provide at least half of their loans to low-income borrowers.
Specifically, the loans would be interest-free, have a loan term of 5 years and do not require payment for a 6-month period beginning on the date the loan is made, or a longer-term period as designated by the Treasury Secretary. The Treasury Department would begin accepting applications for capital investments and loans under the program within 10 days of the bill’s enactment.