U.S. Sens. Tim Scott (R-SC), Lisa Blunt Rochester (D-DE), Bernie Moreno (R-OH) and Andy Kim (D-NJ) are pushing to increase private investment into affordable housing and other community development projects across the country.
The senators introduced legislation, the Community Investment and Prosperity Act, that would increase the statutory cap limiting banks’ investment in community development projects. The law makers said the legislation will “unlock billions in capital” for affordable housing, small businesses, financial education and economic development for needy communities. The legislation was co-sponsored by U.S. Sens. Kevin Cramer (R-ND), Angela Alsobrooks (D-MD), Dave McCormick (R-PA), and Reverend Raphael Warnock (D-GA).
The Community Investment and Prosperity Act raises the cap on “public welfare investments” for banks from 15 percent to 20 percent, which will, the law makers said, open up capital for investment in affordable housing and community development.
“Our regulatory framework should encourage investment in affordable housing and community development projects in communities that need it most, but outdated laws are restricting financial institutions from engaging in these important activities. For the first time since 2006, this bill makes commonsense changes to unlock capital and increase investment opportunities that will boost our housing supply, expand financial inclusion, and support small businesses while ensuring the safety of our banking system,” Scott, the chair of the Senate Committee on Banking, Housing and Urban Affairs, said.
The last time Congress raised the cap was in 2006 as part of the Financial Services Regulatory Relief Act which raised the discretionary cap from 10 percent to its currently level of 15 percent.
“It will take a wholistic effort, in both the private and public sectors, to address America’s housing crisis. This legislation will allow for meaningful investment in community development projects that will improve our affordable housing supply. I look forward to continuing this bipartisan effort alongside Chairman Scott and my colleagues,” Blunt Rochester said.
The legislation is endorsed by KeyBank, the Bank Policy Institute, the Affordable Housing Tax Credit Coalition, and the National Association of Affordable Housing Lenders have endorsed the legislation.