U.S. Rep. Maxine Waters (D-CA) and U.S. Sen. Mark Warner (D-VA) forwarded correspondence last week to Federal Reserve officials, encouraging Community Development Financial Institution (CDFI) and Minority Depository Institution (MDI) guidance regarding the Emergency Capital Investment Program (ECIP).
Waters, chairwoman of the House Financial Services Committee, and Warner sent a letter to Federal Reserve Chair Jerome Powell urging the Federal Reserve to provide guidance to Subchapter S and Mutual bank Emergency Capital Investment Program (ECIP) recipients.
“We recognize the range of considerations the Federal Reserve must take into account when considering guidance and appreciate the Federal Reserve shares our goal of ensuring the ECIP program is a success for these institutions and the communities they serve,” the lawmakers wrote. “However, we have heard concerns from certain Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) that there is a lack of clarity on these issues that might unintentionally force these institutions to limit the ECIP capital they accept. In a manner consistent with promoting the safety and soundness of these institutions, we urge the Federal Reserve to give their request for clarity due consideration.”
The legislators cited the Department of the Treasury revealed the list of institutions approved to receive ECIP investments last month and is seeking to close the investments at the beginning of this year.
“Given the quick timeline the Department is pursuing, we urge the Federal Reserve to provide clarity to Subchapter S and Mutual bank ECIP recipients on these questions as soon as possible,” the lawmakers concluded. “At a minimum, these institutions should have a response to the concerns they are raising to make an informed decision.”