A bill to amend the Community Development Banking and Financial Institutions Act of 1994 to provide for capitalization assistance to enhance liquidity.

Key Points

• This bill helps small banks and credit unions that focus on low-income neighborhoods, known as Community Development Financial Institutions. It allows a federal fund to buy loans from these banks, which gives them immediate cash to turn around and lend to more people in their communities.
• People living in underserved areas or looking for affordable housing will benefit most. By giving these local banks more ready-to-use cash, the bill makes it easier for small businesses and families to get mortgages or business loans that big national banks might turn down.
• Currently, these small lenders can get stuck if all their money is tied up in long-term loans. This plan raises the limit on federal support from $5 million to $20 million per organization. It also uses money already being paid back from previous emergency programs to fund these new efforts.
• The Treasury Department will be required to track how this money is used and report back to Congress. They will specifically look at how many affordable housing loans are made and how much these changes help small community banks compete with larger financial institutions.

Impact Analysis

Govbase has not yet run an impact analysis on this legislation.