ABA Letter on the Federal Community Investment Programs RFI

Dear Colleagues:

The American Bankers Association is pleased to comment on the Interagency Community Investment Committee’s (ICIC) Request for Information (RFI) seeking feedback on how to improve the effectiveness and impact of federal community investment programs. The RFI also solicits information regarding the challenges of accessing and working with these programs. The ICIC intends to use the feedback received through the RFI to better align numerous federal programs in order to facilitate the flow of resources into historically underserved communities, including communities of color, rural, and Tribal communities.

The ICIC’s four primary areas of focus are:

• Strengthening the capacity of community financial institutions, including Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs);
• Starting and scaling small businesses among historically underserved communities;
• Broadening financial inclusion and the provision of financial services; and
• Investing in community facilities and infrastructure to improve access to assets and resources that bolster economic mobility and generate community wealth.

I. Summary of the Comment

Access to capital is fundamental to economic opportunity in the United States. For this reason, ABA believes the ICIC’s work is critically important to underserved and distressed communities as the federal government deploys historic levels of public-sector investments authorized by the American Rescue Plan Act of 2021 (ARP), the Bipartisan Infrastructure Law (BIL), the Consolidated Appropriations Act, the CHIPS and Science Act (CHIPS), and the Inflation Reduction Act (IRA). Further, ICIC’s work will build on the more than $271 billion in mortgage and small business capital that banks provide to low-and-moderate (LMI) communities each year.

We offer the following recommendations to ICIC based on input from our members that are involved in various federal community investment programs. Our comments suggest enhancements to federal loan programs and removal of barriers to bank participation in them; suggestions for improving public awareness of federal loan programs; and steps the agencies can take to enhance the ability of Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) to provide capital to low-and moderate-income communities and underserved populations.

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