The leaders of a bipartisan Senate caucus on Thursday will announce a coalition of businesses and foundations has reached its goal to raise $1 billion for minority and community lenders.
Sens. Mark Warner, D-Va., and Mike Crapo, R-Idaho, co-chairs of the Community Development Finance Caucus, will join Treasury Deputy Secretary Wally Adeyemo at the Capitol Thursday to announce news of the benchmark.
They'll be joined by members of the Economic Opportunity Coalition, which was formed last year, along with lenders focused on underserved communities. Advocates say the new funds will boost minority-owned and rural businesses, as well as small firms emerging from the pandemic.
"This is a the beginning of an effort, that I hope, we can help encourage corporate America, at very little cost of themselves, put their money where their mouth is in terms of helping underserved communities," Warner said. "This is this is investing capital in the same way that you would deposit your money."
Thursday's announcement will also include representatives with Community Development Financial Institutions, or CDFIs, and Minority Depository Institutions, or MDIs. Crapo noted that the CDFIs and MDIs are in communities that lack access to capital more readily available in larger metro areas.
The new effort follows previous expansions of lending by CDFIs and MDIs, including a $12 billion federal investment tied to the pandemic relief bill passed in December 2020.
"This is really the opportunity to give support to underserved and rural communities across this country to help launch the American dream, to help launch the startup of new small businesses, and to help entrepreneurs launch the development of their work," Crapo said.
Supporters said the new $1 billion in deposits will bring down so-called loan-to-deposit ratios at these institutions, allowing increased lending.
Warner and Crapo, who call themselves good friends and have served together on the Senate banking and financial committees for several years, said their plans to boost such lending has been years in the making. Thursday's milestone also marks a bipartisanship relationship as the two have worked together to ramp up new loans for neglected communities.
"This is an example of the bipartisanship that can and does happen in Congress. A lot of times the big battleground issues where there are partisan battles catch all the attention in the media," Crapo argued. "But the reality is that while those those fights exist ... there are many, many Republicans and Democrats in the House and the Senate who are working together on bipartisan issues to help find solutions to particular problems and move them forward."
The Economic Opportunity Coalition, which was launched in July with dozen organizations as part of a Biden administration initiative, had set out to reach the $1 billion goal after its formation last year. It has since grown in its membership, and includes Wells Fargo and Bank of America.
Warner said while the coalition is still relatively new, it's already fulfilling a need made more clear by the pandemic's drains on the economy and businesses that were left behind.
"We need to make sure everybody gets a fair shot in this country," he said.
NPR's Barbara Sprunt contributed to this report.
