The House Appropriations Committee on Tuesday approved an FY22 Financial Services spending bill that would provide large increases for community development financial institutions programs and would establish a pilot program to test postal banking.
The bill, which was approved 33-24, would provide $4 million for the National Credit Union Administration’s Community Development Revolving Loan Fund program. That program received $1.5 million in FY21.
In the report accompanying the bill, the committee said that the panel continues to support the NCUA’s policy of placing a priority on grants to minority depository institutions and on credit unions with less than $100 million in assets.
The committee encouraged the NCUA to identify census tracts with large percentages of underbanked people and “to explore new strategies for increasing access to democratically owned and controlled credit unions in these communities.”
The bill calls for $330 million for the Community Development Financial Institutions program—a $60 million increase over the current funding level.
In providing the increase for the CDFI program, the committee said the CDFI fund “has been a lifeline for many struggling low-income and distressed communities across the country who are particularly disadvantaged when it comes to accessing credit.”
The panel encouraged Treasury Secretary Janet Yellen to establish an Office of Minority Lending Institutions to help ensure that at least 40% of awards are distributed directly to minority lending institutions.
The legislation also would provide $6 million to test postal banking services. The House version of the FY21 Financial Services funding measure called for a similar program, but the Senate bill did not include it. The final spending agreement for FY21 spending did not call for the pilot program
The committee said that the Postal Service currently plays a major role in the financial services market. For instance, the Postal Service is the largest provider of money orders in the country. “By updating its services to reflect new technological and financial trends, the USPS can offer an improved customer experience and expand its affordable non-bank financial services to tens of millions of unbanked and underbanked Americans,” the committee said in its report.
The legislation calls for carrying out pilot programs in at least five rural and five urban zip codes to allow “surcharge-free automated teller machines, wire transfers, check cashing, and bill payment to the fullest extent permitted under current statutory authority.”
The committee voted by a voice vote to defeat an attempt to delete the pilot program from the bill. “The Postal Service needs to focus on its core mission,” said Rep. Steve Womack, R-Ark., who sponsored the amendment to delete funding for the project. “Let’s not force the Postal Service into a new mission against its will.”
However, Financial Services Appropriations Subcommittee Chairman Mike Quigley, D-Ill., said that bank branches are closing at record levels, adding that the pilot would provide services to people who do not have access to banks. “This will help the most vulnerable people save money and time,” he said.
The funding bill also includes $190.5 million for the Financial Crimes Enforcement Network, an increase of almost $60.3 million. The committee report noted that FinCEN is in charge of developing a system to collect the ownership of companies. The bill sets aside $29 million for the development of that system.