Sen. Menendez questions witnesses about potential impacts CDFI fund cuts could have on disadvantaged communities
WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.) Tuesday questioned witnesses during a Housing, Transportation, and Community Development Subcommittee hearing entitled “How Community Development Financial Institutions Promote Housing and Economic Opportunity.”
The Senator asked all three witnesses to describe the potential impacts CDFI funding cuts proposed by the House could have on the work CDFIs do for disadvantaged communities.
“Republicans in the House have spent the last few months debating draconian cuts to domestic programs that hardworking Americans rely on, including the CDFI Fund. In July the House Appropriations Committee passed a bill that cut funding for CDFIs by $45 million – a nearly 15% cut from fiscal year 2023,” Menendez said. “Well, CDFIs have proven their effectiveness time and again, and that is why earlier this year forty-six bipartisan Senators joined my letter to the appropriations committee requesting robust funding for the CDFI Fund. I look forward to continue that bipartisan support.”
Sen. Menendez questioned Ms. Julia Nelmark, President and Chief Executive Officer of the Midwest Minnesota Community Development Corporation, about how the CDFI Bond Guarantee program, which is designed to provide a low-cost source of long-term, “patient” capital to CDFIs, helps community development projects come to life.
“The CDFI Bond Guarantee Program, which I helped create in the wake of the 2007 financial crisis, allows CDFIs to access long-term, low-cost capital to jumpstart economic growth and community development, all at no cost to the taxpayer,” Menendez said. “The program has supported over $1.3 billion dollars in affordable financing for community facilities, nonprofits, commercial real estate, other development projects.”
The Senator concluded by asking Ms. Nelmark how CDFIs can help alleviate the lack of affordable housing supply in low-income communities. According to Freddie Mac, the United States is short approximately 3.8 million units of housing, both for-rent and for-sale. Home building continues to fail in keeping up with demand, and low interest rates during the pandemic caused housing prices soar. With higher interest rates and less homes on the market, working and middle-class families have less buying power with fewer options to buy.
Senator Menendez leads a letter every year requesting funding for the CDFI Fund. For FY24 the Senator and 46 other bipartisan Senators requested $341 million for the Fund. The Senator led the effort to establish the CDFI Bond Guarantee Program, which enables the CDFIs to execute large scale development programs, through the enactment of the Small Business Jobs Act of 2010.
Sen. Menendez has continued his decades-long advocacy to support access to capital for underserved communities through CDFIs. In a Subcommittee hearing last January, Sen. Menendez highlighted how the much-needed assistance CDFIs provide to minority- and women-owned business hit hardest by the COVID-19 pandemic, as well as during the creation of key community services such as housing, childcare centers and healthcare facilities.
