Legislation would extend and enhance lending and credit to more Americans
WASHINGTON – Senator Ruben Gallego (D-AZ) backed bipartisan legislation to strengthen and expand Community Development Financial Institutions (CDFI), which play a critical role in bringing capital and financial services to a wide range of small businesses, homeowners and housing developers. The CDFI Bond Guarantee Program Improvement Act will extend authorization of the CDFI Bond Guarantee Program, while making it more reliable and accessible to smaller CDFIs. By expanding and improving a successful program that operates at no cost to taxpayers and allows CDFIs to access long-term, stable funding, the legislation will jumpstart economic development and address disparities in access to capital.
“Community Development Financial Instructions play a critical role in helping hardworking families achieve the American dream – creating opportunities for Arizonans who otherwise wouldn’t be able to buy a house or start a business,” said Senator Gallego. “CDFIs need and deserve to know that they will be able to access the capital that makes those dreams possible, and that’s exactly what this bipartisan legislation does.”
The CDFI Bond Guarantee Program was established in 2010 to provide long-term, low-cost capital to CDFIs, which use the funding for economic development activities in underserved communities. The program’s authorization lapsed in 2014, but it has been extended on a year-by-year basis in annual appropriations bills. Under current program rules, borrowers must have a loan size of at least $100 million – which means that the program can only be used for relatively large projects.
The CDFI Bond Guarantee Program Improvement Act will authorize the program for four years, to provide certainty to borrowers and lenders. It will also reduce the minimum loan size to $25 million and remove the annual limit on guarantees, to allow smaller CDFI to utilize the program and to support more community development projects.
The bipartisan legislation was led by Senators Tina Smith (D-MN) and Mike Rounds (R-SD).
Full text of the bill can be found HERE.
5/29/25