A bipartisan group of senators recently introduced an American Bankers Association-backed bill to create a community development financial institutions tax credit for private sector investors that make equity, equity-equivalent investments or long-term patient capital available to CDFIs.
The proposed legislation seeks to benefit CDFIs of all types—including banks, credit unions, venture capital CDFIs and loan funds—while providing institutions with the maximum flexibility and financial support they need to increase wealth in low- and moderate-income communities, according to the sponsors. Sens. Mark Warner (D-Va.) and Roger Wicker (R-Miss.) are lead sponsors, with Sens. Chris Van Hollen (D-Md.), Cindy Hyde-Smith (R-Miss.), Gary Peters (D-Mich.) and Jerry Moran (R-Kan.) signing on as cosponsors.
In a statement, ABA President and CEO Rob Nichols thanked the senators for introducing the bill. “ABA is proud to represent a number of CDFIs across the country and this legislation would expand investment in these critically important financial institutions, allowing them to have an even bigger impact in the communities they serve,” he said.