Rep. TJ Cox Leads Successful Push to Include Greater Support for Community Development Financial Institutions in the Latest COVID-19 Economic Relief Package

Prior to the passage of the Paycheck Protection Program and Health Care Enhancement Act, the new COVID-19 relief bill passed by Congress last Thursday, Rep. TJ Cox (CA-21) sent a bipartisan letter along with Reps. Carolyn Maloney (NY-12), Barbara Lee (CA-13) and Don Young (AK-AL) urging Congressional leadership to fund the Community Development Financial Institution (CDFI) Fund and provide CDFIs greater access to the Small Business Administration’s Paycheck Protection Program (PPP) in response to the COVID-19 crisis.  

CDFIs are private financial institutions that deliver responsible, affordable loans to create economic opportunities that help low-income, minority, and disadvantaged communities. By financing community businesses—including small businesses, microenterprises, nonprofit organizations, commercial real estate, and affordable housing—CDFIs can spark job growth and retention in underserved areas across the nation. Without their help, many small businesses in the Central Valley and the rest of the U.S. would struggle to get the funding they need to get started or to keep growing.  

Thanks to the letter led by Rep. Cox, the Paycheck Protection Program and Health Care Enhancement Act—passed by Congress last week—includes $30 billion in PPP funding set aside for CDFIs, small banks and credit unions. It also includes $50 billion for the Small Business Administration’s Economic Injury Disaster Loan Program, which will help small businesses that are the worst affected get the loans they need to survive this crisis.  

In the letter, the members wrote: “In the coming months CDFIs can provide important financial assistance to small businesses. First, by providing forbearance to small business borrowers as social distancing and stay at home orders continue. Second, as the nation emerges from the crisis, CDFIs will be called upon to provide working capital and other sources of flexible, patient financing necessary for small businesses to get back on their feet. It took more than a decade for many communities to recover from the Great Recession. Some never did. The dire and unprecedented economic circumstances in rural and urban communities across the country demand a more aggressive response from Congress.” 

Read the full letter here

Read the full text of the Paycheck Protection Program and Health Care Enhancement Act here