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Biden proposes investments in CDFIs, affordable housing, small biz
President Joe Biden Thursday released his proposed 2024 budget, which includes provisions aimed at strengthening communities, addressing tax issues, and bolstering protections against global threats. The proposed budget totals more than $10 trillion over the 2024-2033 period, and the administration claims it would reduce the nation’s deficit by almost $3 trillion over the next decade.
Of note for credit unions, the proposal would boost funding for the Small Business Administration (SBA), the Community Development Financial Institution (CDFI) Fund, and the Department of Housing and Urban Development (HUD) compared to 2023 enacted levels. NAFCU will continue to advocate for funding for agencies and programs that allow credit unions to meet members' needs and support their communities.
CDFI Fund
The proposal provides $341 million to the Treasury's CDFI Fund – a 5 percent increase from the 2023 enacted level. The budget proposal notes the CDFI Fund “provides historically underserved and often low-income communities access to credit, capital, and financial support to grow businesses, increase affordable housing, and reinforce healthy neighborhood development.” It also includes a $10 million subsidy to the NAFCU-supported CDFI Bond Guarantee Program to address the shortage of long-term affordable credit for development projects in disadvantaged communities, as well as $4 million for the Community Development Revolving Loan Fund.
NAFCU is active on CDFI issues to ensure credit unions can take advantage of the program to better serve their communities. The association is currently engaged with fund administrators, lawmakers, and regulators as the CDFI Fund considers changes to the CDFI Certification Application and process. NAFCU has shared concerns about the proposed changes to CDFI certification standards that could restrict access to the fund and its resources, and has advocated for increased transparency and communication.
SBA
Biden’s budget proposal authorizes $58 billion for lending through the SBA’s flagship 7(a) loan guarantee, 504 loan, Small Business Investment Company (SBIC), and Microloan programs in an effort to address the need for greater access to affordable capital, especially in underserved communities.
NAFCU is currently engaged with the SBA as it considers changes to several of its loan programs, warning that proposed changes and allowing fintechs greater access to make SBA-guaranteed loans could introduce risks and increase fraud.
FinCEN
Within the 15 percent proposed increased funding for the Treasury Department is $229 million for the Financial Crimes Enforcement Network (FinCEN) to support the launch of the Beneficial Ownership Secure System and invest in efforts to enhance corporate financial accountability. NAFCU last month offered recommendations to FinCEN on ways to strengthen beneficial ownership information access and safeguards.
In addition, the budget increases investments in programs to combat money laundering and terrorist financing. Throughout Biden’s budget proposal are provisions to enhance the nation’s cybersecurity and protect systems from attacks.
Housing
The budget proposes $73.3 billion for HUD to increase affordable housing supply, expand rental assistance, and strengthen communities facing underinvestment. The budget notes the Federal Housing Administration’s (FHA) annual mortgage insurance premium (MIP) reduction – expected to save FHA-borrowers roughly $800 in the first year of their mortgage loan – as part of its effort to make homeownership more affordable. In addition, the budget includes funds for the HOME down payment assistance pilot and for FHA to increase the availability of its small balance mortgages.
NAFCU will continue to advocate for policies that promote sustainable and equitable access to affordable housing and ensure the credit union industry’s best interests in the housing finance system.