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.
“By creating a crisis fund for CDFIs with automatic triggers, we can quickly provide aid to the people and small businesses that need it most,” Schatz said.
Any CDFI applying for funds from the program would have to commit to spending 90% of the funds in areas affected by the emergency, according to the legislation. The bill also sets aside 30% of the crisis funding for minority CDFIs.
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