Community Development Investment Tax Credit
As Congress considers a transformative tax package, CDBA is thrilled to be leading support for the bipartisan Community Development Investment Tax Credit Act of 2023 (S. 2963).
Introduced by Senators Mark Warner and Roger Wicker, the Community Development Investment Tax Credit is a smart and strategic tool that will effectively use a very small amount of public resources to leverage private investment to generate enormous community impact - CDFIs can leverage capital up 12 times for every dollar invested to serve credit markets and communities that otherwise might not be served. Beyond CDBA, this bill enjoys the full support of national trade organizations representing the full range of Community Development Financial Institutions (CDFIs), as well as banking trades representing the full range of U.S. domestic banks and thrifts.
CDFI and MDI trades:
Community Development Bankers Association (CDBA)
African American Alliance of CDFI CEOs
Community Development Venture Capital Alliance (CDVCA)
National Association for Latino Community Asset Builders (NALCAB)
National Bankers Association (NBA)
Native CDFI Network
Opportunity Finance Network (OFN)
American Bankers Association
Independent Community Bankers of America
"The CDFI Investment Tax Credit is a smart and strategic tool. The credit uses a very small amount of public resources to leverage a multiple of private dollars and generate enormous community impact."
- Jeannine Jacokes, CEO, Community Development Bankers Association.
We are excited to announce the reintroduction in the Senate of the bipartisan Community Development Investment Tax Credit. CDBA has worked closely with Senator Mark Warner and his colleagues to draft and reintroduce this legislation, and we thank all of the initial sponsors for their support. Endorsements for the bill also come from a wide range of organizations, including national banking, credit union and CDFI trades. Bill text is available here. Over the coming months, please look out for communications from CDBA on how your bank can support the successful passage of this landmark legislation.
Below is an excerpt from the press release sent from Senator Warner's office.
"WASHINGTON – Today, U.S. Sen. Mark R. Warner (D-VA), joined by Sens. Roger Wicker (R-MS), Chris Van Hollen (D-MD), Cindy Hyde-Smith (R-MS), Gary Peters (D-MI), and Jerry Moran (R-KS), reintroduced bipartisan legislation to promote lasting economic prosperity in low-income, minority, and rural communities. The Community Development Investment Tax Credit would help unlock more equity and long-term financial capital for community development financial institutions. CDFIs often serve as a backbone for underserved communities including small and disadvantaged businesses, which tend to have fewer banking relationships and less access to credit.
'As someone who worked in the business world long before I ever joined politics, I know well that talent and ambition are not confined by income bracket or zip code. Unfortunately, access to start-up capital often is. CDFIs do the invaluable work of bridging the gap and reaching small businesses in our most vulnerable communities, and we have seen historic investments on this front over the past few years,' said Sen. Warner. 'Despite this progress, CDFIs remain in need of additional equity and capital to continue serving their communities. This legislation will create a new tax credit, helping spur important private-sector investments and allowing these community lenders to grow.'
'Our country was built by small business, but many in low-income areas have trouble accessing the financing they need to launch and grow their businesses,' said Sen. Wicker. 'CDFI investments play a pivotal role in bridging these gaps. The proposed tax credit in this legislation would help address the challenges faced by small business owners and provide an alternative to predatory loans.'
This bill will help direct support to lenders that focus on underserved communities by creating a CDFI Tax Credit for private sector investors that make equity, equity-equivalent investments, or long-term patient capital available to CDFIs. The bill would 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."
Text of the bill can be found here.