The Treasury Department will require the Community Development Financial Institutions Fund to modify its New Market Tax Credits program allocations to ensure compliance with federal anti-discrimination laws, and it will increase monitoring of award recipients, according to an announcement today. The Treasury also announced a new round of NMTC allocations that reflect a 20% increase in investments in rural and non-metro communities.
In a statement, Treasury Secretary Scott Bessent accused the Biden administration of using the NMTC program to promote diversity, equity and inclusion (DEI) and environmental, social and governance (ESG) goals, which he said strayed from its community revitalization mission. Moving forward, the CDFI Fund will modify the permitted uses of allocations to ensure compliance with federal law, and it will enhance monitoring of how awardees use their funds.
“In the event of noncompliance with NMTC requirements, Treasury intends to vigorously exercise its remedies, to the extent permitted by law, including potentially decertification of the infringing community development entity, termination of any unused NMTCs, and recapture of past NMTC awards,” according to the announcement.
As for the 20% increase in rural and non-metro allocations, the investments “will help expand rural hospitals, strengthen small businesses, build domestic manufacturing capacity, and support job creation.”
