More than $8.7 billion in investments will be deployed through the Emergency Capital Investment Program (ECIP) to increase lending to small and minority-owned businesses and low- and moderate-income consumers in underserved communities.
The ECIP enables the U.S. Department of the Treasury to make direct investments in banks, credit unions, and holding companies designated as a Community Development Financial Institution (CDFI) or a Minority Depository Institution (MDI). Treasury Secretary Janet Yellen and Vice President Kamala Harris highlighted the investment at the 2021 Freedman’s Bank Forum this week.
“We know that the communities hurt most by COVID-19 have often been communities of color, and Treasury has implemented relief legislation with equity in mind,” Yellen said. “Today, we’re seeing one result of that effort: Treasury, through the Emergency Capital Investment Program, is injecting nearly $9 billion into Community Development Financial Institutions and Minority Depository Institutions.”
The institutions to which Treasury is offering an ECIP investment are based in 36 different states, the District of Columbia and Guam. Mississippi, Louisiana, North Carolina, California, and Texas are the states that are getting the most ECIP investments. The ECIP investments will range in size from over $200 million to less than $100,000. Roughly 54 percent of the investments are in banks, while 46 percent are for credit unions. Also, a total of $3.1 billion in ECIP investments is being offered to 57 minority depository institutions.
CDFIs and MDIs often make smaller loans and work with borrowers who face barriers in our economy. ECIP investments are designed to increase responsible investments in low- and moderate-income and minority communities that have disproportionately suffered from the impacts of the COVID-19 pandemic.