U.S. Department of Treasury building. (Source: Shutterstock)
Late last week, NAFCU and Inclusiv sent a joint letter to the Department of the Treasury in response to the Treasury's notice and request for information concerning the State Small Business Credit Initiative (SSBCI) to encourage insured credit unions that are CDFI and MDI certified to take part.
In the letter, penned by Inclusiv President/CEO Cathie Mahon and NAFCU Senior Regulatory Affairs Counsel Kaley Schafer, the two groups pointed out the support and concerns of the SSBCI program.
"While our organizations are supportive of inclusion of the SSBCI program as part of the overall American Rescue Plan Act of 2021 (ARPA), we have concerns about the wide latitude the statue affords to states in the development and execution of this important program," NAFCU and Inclusiv wrote. "In certain states, a very real possibility exists that low-income communities and the capital needs of businesses owned by people of color will not be prioritized."
The letter continued, "MDI and CDFI certified credit unions play an integral role in providing capital to small businesses. As demonstrated by the active participation of CDFI lenders -including banks and credit unions – in the Paycheck Protection Program, we believe that their involvement in any state-level credit support programs, including capital access programs, loan guarantee programs, loan participation programs and collateral support programs, is critical if the aim is to direct resources to financially underserved, minority communities and populations."
According to an additional statement released by NAFCU and Inclusiv, they urged the Treasury to support meaningful engagement with the CDFI and MDI sector across all states and recommended the following:
- States should be required or strongly incentivized to work with CDFIs and MDIS with long records of serving very small businesses and economically distressed communities in the development and implementation of the SSBCI.
- Through written guidance provided by the U.S. Treasury to states administering the SSBCI, highlight the unique capabilities of CDFIs/MDIs in meeting the statutory requirements of the program to meet the needs of disadvantaged businesses as lenders or administrators of the funds.
- Require robust data collection by all SSBCI lenders and public reporting on loans made by geography at the county level, including whether or not the county is a non-metro county or a county in which the majority of the population is represented by people of color.
"Any dollars deployed by CDFIs through the SSBCI that are repaid, should be allowed to stay with the institutions in exchange for a future commitment to deploy the dollars in economically distressed communities or to disadvantaged small businesses," NAFCU and Inclusiv added.
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
