CDFA SSBCI Letter to U.S. Treasury
CDFA Sends Letter to Treasury Secretary Yellen Regarding SSBCI
Calls for Immediate Deployment of Funds
The SSBCI program was reauthorized and enhanced 13 months ago through the American Rescue Plan Act
to provide near- and long-term support to small businesses. To date, Treasury has not allocated a single dollar to Eligible Governments or TA providers to fund small business financing and TA programs.
All eligible states, U.S. Territories, and the District of Columbia met the February 2022 deadline for submitting Capital Program applications. Nearly 60 days later, Treasury has yet to approve a single application, and in many cases, has yet to provide feedback to applicants. The application period for Tribal Governments remains open through June 2022, and if Treasury continues at the same pace, most will not likely receive SSBCI allocations this year.
The application process for all Eligible Governments has been made more difficult due to incomplete program guidance issued by Treasury. In November 2021, guidance pertaining to Capital Programs was issued. However, Eligible Governments have not received full guidance on reporting requirements, and guidance on the program’s TA component has not been released.
As a result, Eligible Governments are currently not authorized to deploy SSBCI capital that has already been allocated on a formula basis. Eligible Governments have been required to put all necessary programming, partnerships, and private financing in place in order to prepare for expected SSBCI funds. However, nearly $10 billion in appropriated capital for the program remains unobligated.
To preserve the reputation of the SSBCI program and more than a year’s worth of work from Eligible Governments, CDFA and the SSBCI Coalition strongly urge Treasury to do the following:
Add Your Signature to the Letter
Immediately provide all Eligible Governments a status update on their application as well as pertinent feedback regarding the SSBCI strategies proposed.
Deploy the first tranche of capital to all Eligible Governments that have submitted an SSBCI application to-date.
Immediately issue full guidance pertaining to reporting requirements and TA, as well as make reasonable adjustments to the Interim Final Rule on Demographic-Related Reporting Requirements based on stakeholder feedback.
Make available the TA application by the first week of May 2022 to allow for an adequate stakeholder response by the June 30, 2022 application deadline.
Execute allocation agreements with Tribal Governments within 30 days of receiving complete Capital Program applications.
Community Development Finance Tools and Pillar II
CDFA Coalition Sends Letter to Treasury Secretary Yellen Regarding OECD Pillar II Model Rules
Warns of Disastrous Effects on Several Community Development Finance Tools
CDFA and a coalition of 30 trade associations representing thousands of state and local governments, non-profit organizations, and businesses engaged in community development finance delivered an urgent letter to Treasury Secretary Yellen to warn of the impact that the new OECD Pillar II Model Rules could have on vulnerable and distressed communities and populations. The letter calls on Treasury to work with the OECD to ensure that longstanding, bipartisan and successful tax policies for spurring community development in the United States are protected for the long-term in its implementation of the new global minimum tax rules.
A longstanding tenet of federal tax policy is to use tools such as the Low-Income Housing Tax Credit (LIHTC), the New Markets Tax Credit (NMTC), the Historic Tax Credit (HTC), and tax-exempt bonds to provide affordable homes to people in need, critical investments in our nation’s infrastructure, and jobs to support economically thriving communities. These tools have broad bi-partisan support and Administrations from both political parties, including the Biden Administration, have recognized their importance through a variety of different legislative actions and federal programs.
The OECD Pillar II Model Rules could have disastrous effects on these catalytic financing tools beginning immediately, as major investors in these projects could be forced to significantly alter their investments past, present, and future regardless of the Pillar II implementation timeline. At a time when costs are rising and low-income families and communities are being hit the hardest, the nation cannot afford to lose these critical investment tools.
Global Tax Deal Could Have ‘Disastrous Effects,’ Community Development Groups Say
Global Tax Rate May Hurt Muni Demand, Biden Floats Vague Fix
Learn More About Pillar II
Development Finance Solutions
for Building Back Better
Development Finance Solutions for Building Back Better
Policy Priorities for the Biden-Harris Administration
Access to affordable, flexible, and efficient public and private capital remains the primary barrier to economic development in the United States. Over the past four decades, federal support for capital formation and capital access has shifted from a heavily subsidized system to one focused on leverage, credit enhancement, and the removal of financing barriers. Despite this migration to a risk-reduced approach, access to capital for numerous sectors – small business, entrepreneurs, manufacturing, clean energy, agriculture, rural infrastructure, urban revitalization – remains a significant challenge.
The ideas offered in this paper provide a roadmap for the Biden-Harris Administration to use development finance solutions for building back better. These recommendations have been carefully crafted to address the multiple, interconnected challenges facing the U.S. economy. They focus on four key policy considerations:
- Restore Local Economies
- Preserve Small Businesses
- Invest in Our Communities
- Protect Our Environment
CDFA is prepared to assist the Biden-Harris Administration with developing the recommendations and opportunities outlined in this paper. We believe enacting these development finance solutions will immediately unlock capital to fuel investment, create jobs, build infrastructure, and increase the quality of life for every American.
Development Finance Solutions for Building Back Better
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