Presumptive Democratic presidential nominee Joe Biden said Tuesday that, if elected, he will push plans to use Community Development Financial Institutions to help close the racial wealth gap.
Outlining his plan to attack the racial economic disparities in the U.S., Biden noted that the coronavirus has had a devastating impact in Black and Brown communities, with Black unemployment reaching 15.4% and Latino unemployment reaching 14.5%.
That must be corrected, Biden said, adding that the Trump Administration has done little to attack the problem. For instance, he said, the Trump Administration has proposed weakening the Community Reinvestment Act. Biden said that the CRA must be strengthened and should apply to financial technology companies and non-bank providers. However, he did not call for including credit unions in the CRA; credit unions have argued they should not be subject to that law.
In announcing his latest economic proposals, Biden also said he favors:
- Doubling direct funding for CDFIs and expanding their capacity to offer micro-loans to startups and larger loans to existing businesses.
- Expanding access to $100 billion in low-interest loans by funding state, local, tribal, and non-profit lending programs in Black and Brown communities and by further strengthening CDFIs.
- Establishing an innovation fund that would allow coalitions of CDFIs and other groups to seek funding to create or expand small business lending programs that benefit companies owned by members of minority groups.
- Creating a new public credit reporting and scoring division within the Consumer Financial Protection Bureau to provide consumers with a credit score that seeks to minimize racial disparities.
- Holding financial institutions accountable for discriminatory practices in the housing market. He said the Trump Administration is seeking to gut enforcement based on the disparate impact standard by significantly increasing the burden of proof for people alleging discrimination
- Supporting efforts by the Federal Reserve to establish a “real time” payment system that would allow instant access to the money that a person is owed.