Statement for the Record Regarding Support for the Community Development Investment Tax Credit Act of 2023

The American Bankers Association (ABA) appreciates the opportunity to provide a Statementfor the Record for this hearing entitled How Community Development Financial InstitutionsPromote Housing and Economic Opportunity. ABA represents banks of all sizes and businessmodels across all 50 States, including Community Development Financial Institution (CDFI)banks, which are a critical piece of the overall banking ecosystem. CDFI banks are mission-driven organizations focused on supporting economic development in their communities,including by providing affordable lending and financial services in low-to-moderate income anddisadvantaged communities.

Support for the Community Development Investment Tax Credit Act of 2023

The ABA wishes to express our strong support for the "Community Development InvestmentTax Credit Act of 2023." This legislation seeks to amend the Internal Revenue Code of 1986 toprovide a credit for investment in Community Development Financial Institutions (CDFIs) andMinority Depository Institutions (MDIs).

This legislation presents a comprehensive framework for incentivizing investments in CDFIs andMDIs, which are instrumental in providing access to capital and financial services to individualsand businesses in distressed communities. It introduces tax credits for individuals and businesseswho invest in qualified CDFIs, thereby encouraging the flow of private capital into theseinstitutions.

The Act also contains provisions to support emerging community development financialinstitutions, nurturing their growth and impact in expanding the reach of financial services tounderserved areas.

We strongly believe that the "Community Development Investment Tax Credit Act of 2023" canaddress critical issues of economic inequality, access to financial resources, and economicrevitalization in underserved communities. By providing tax incentives for investments in CDFIsand MDIs, it encourages the flow of capital into these vital institutions, stimulating localeconomies, creating jobs, and empowering disadvantaged individuals and businesses.

Download the statement for the record to read the full text.