Inclusiv: Big Banks Failing Small Businesses During Pandemic; CDFIs Are Filling Void

The coronavirus economic crisis demonstrated the failure of large banks to reach small and minority-owned businesses, Cathie Mahon, president/CEO of Inclusiv told the Community Development Financial Advisory Board Thursday.

Community Development Financial Institutions stepped up to fill that void as much as they could, Mahon, whose trade group represents community development credit unions, told the board. She added, however, that Minority Depository Institutions and CDFIs were hampered in that effort because they need the capital, technical support, and platforms to keep up with the evolving financial services world.

Sen. Schatz Introduces Legislation to Create CDFI Emergency Fund

Amid signs that federal pandemic assistance funds have not reached businesses that need them the most, Sen. Brian Schatz (D-Hawaii) this week introduced legislation creating a new $2 billion emergency fund for Community Development Financial Institutions.

The legislation, S. 4430, would automatically provide capital for CDFIs during a natural disaster or economic crisis. The legislation is cosponsored by nine Democrats and Independent Bernie Sanders of Vermont.

Democratic Draft Platform: Renew Glass-Steagall, Explore Postal Banking

A draft of the 2020 national Democratic platform calls for an “up-dated and modernized version” of the Glass-Steagall Act and for an examination of postal banking.

The draft document, which the Democratic National Committee is scheduled to consider on Monday, said the party will push for “a new economic contract that provides access for all to reliable and affordable banking and financial services.”

It also calls for beefing up the Consumer Financial Protection Bureau and doubling funding for the Community Development Financial Institutions program.

McHenry Accuses Waters of Wasting Financial Services Committee’s Time by Focusing on Dead Legislation

The Democratic leadership of the House Financial Services Committee is pursuing a purely partisan agenda and is pushing dead-on-arrival legislation that will not help Americans weather the coronavirus pandemic, Rep. Patrick McHenry of North Carolina, the committee’s ranking Republican, charged Thursday. “Since June 3, 2020, the Committee has focused on pursuing a purely partisan agenda,” McHenry wrote in a letter to committee Chairwoman Maxine Waters (D-Calif.). “There have been no bipartisan policy discussions. No overtures to reach across the aisle. No willingness to entertain, let alone find bipartisan solutions.” The Financial Services Committee traditionally has been a highly partisan committee,

House Appropriators Approve Bill with CDFI Boost, Postal Banking Pilot

The House Appropriations Committee Wednesday approved an FY21 financial services spending measure that includes an $11.5 million boost for the Community Development Financial Institutions program. Voting 30-22, the committee approved the bill that would provide $273.5 million for the program in FY21. The bill also would provide the NCUA’s Community Development Revolving Loan Fund with $2 million in FY21. The program received $950,00 this year. Rep. Harold Rogers (R-Ky.) told the committee that the CDFI program has worked extremely well in areas of his district. The Trump Administration has proposed eliminating the program in each of its budgets. The report