[Senate Hearing 117-]
[From the U.S. Government Publishing Office]
FINANCIAL SERVICES AND GENERAL GOVERNMENT APPROPRIATIONS FOR FISCAL
YEAR 2022
----------
WEDNESDAY, JUNE 23, 2021
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 2 p.m., in room SR-138, Dirksen
Senate Office Building, Hon. Chris Van Hollen (Chairman)
presiding.
Present: Senators Van Hollen, Leahy, Coons, Hyde-Smith,
Moran, and Kennedy.
DEPARTMENT OF THE TREASURY
OPENING STATEMENT OF SENATOR CHRIS VAN HOLLEN
Senator Van Hollen. Welcome Madam Secretary; and everybody
joining us. The subcommittee hearing will come to order.
And I want to begin by welcoming Ranking Member Hyde-Smith;
and our colleagues on the Senate Appropriations Subcommittee on
Financial Services and General Government.
Madam Secretary, welcome. Thank you for joining us to
testify on the fiscal year 2022 Department of Treasury budget.
And I would also like to acknowledge now some of the members of
our second panel for today's hearing, who are joining us to
discuss: The Community Development Financial Institutions
Program.
They are deputy assistant secretary, Noel Poyo, from the
Department of Treasury; Mr. Joseph Haskins, the chairman of
Harbor Bank in Baltimore; and Mr. Andy Anderson, president of
the Bank of Anguilla, in Anguilla, Mississippi.
It was welcome news, Madam Secretary, to see that this
year's budget request proposes an increase in funding for the
CDFI Program, and not the elimination of the program that we
saw in budgets from the previous administration. Since its
inception, the Department of Treasury has played a central role
in maintaining a strong economy, spurring economic growth and
promoting opportunity in the United States.
That mission has been essential to our Nation's financial
health, as we work urgently to build back better and stronger
from the economic damage of COVID 19. Under the leadership of
Secretary Yellen, the Department of Treasury has been charged,
not only with providing historic relief in close coordination
with Congress, but also supporting a dynamic economy that
harnesses the potential of each and every American.
This work is far from simple and requires our full effort
and attention but, thankfully, the Department has moved full
steam ahead to help those hardest hit, jumpstart our recovery,
and pave the way to a fairer economy. We are already seeing
proof of that fact. In particular, I would like to salute you,
Madam Secretary, for helping to ensure a quick and efficient
rollout of the expanded child tax credit benefits that were
secured in the American Rescue Plan.
Under that plan eligible families will now receive $3,600
for each child under 6 years old, and $3,000 for each child
between the ages of 6 and 17. And starting in mid-July,
families will start receiving their expanded child tax credit
in monthly payments of up to $300 per child. It is estimated
that this move will cut child poverty in half this year. And I
hope we can work together to extend that credit beyond 2021, as
proposed in President Biden's budget.
Madam Secretary, I also want to commend you on the success
in moving toward a global minimum tax rate for corporations to
help stop the current race to the bottom that we are seeing
between nations as many seek the shelter of tax havens.
Congratulations on reports of today's news of the G20, and we
will be following up with some questions on that front. It is
really important that our major multinational corporations pay
their fair share of taxes, and your work has moved us closer to
that point.
The fiscal year 2022 budget proposes an appropriation for
the Treasury Department of almost $15 billion, an increase of
$1.4 billion over last fiscal year. There is no question that
the Treasury has been asked to play a large role in addressing
the pandemic, and making sure that the United States economy
recovers, and to achieve these goals, they have asked us for
additional funding for departmental offices, so everyone at the
Treasury can do their job.
There is no doubt that we have asked your Department to do
a lot more over the last year-and-a-half. Within that total,
you have requested $13.2 billion for the IRS, an increase of
$1.2 billion. Your budget also request $80 billion over 10
years in additional funding for the IRS, split between
mandatory funds and a discretionary cap adjustment for tax
enforcement activities, which would be $417 million for fiscal
year 2022.
This subcommittee heard from the IRS Commissioner on many
of these issues. He laid out a very solid case for providing
these funds to close the tax gap, somewhere between $500
billion to $1 trillion in each--taxes that are owed mostly by
very wealthy individuals, but not paid. And the additional
information can go to address badly needed services to provide
all Americans, through the IRS, with respect to the
Department--with the IRS functions.
Before I end, Madam Secretary, I would just like to commend
you and your staff on your responsiveness to our questions, and
grateful for the assistance your team has provided as we
prepared for this hearing.
With that, let me end where I began, by thanking all of you
for coming today to share your perspectives. And now I want to
turn it over to Ranking Member, Senator Hyde-Smith for her
opening statement.
OPENING STATEMENT OF SENATOR CINDY HYDE-SMITH
Senator Hyde-Smith. Thank you, Mr. Chairman. And I welcome
you, Secretary Yellen, to our hearing today, and I look forward
to your testimony this afternoon, and the testimony of our
second panel as well. I am very pleased to have a Mississippian
with me today, a friend, Mr. Andy Anderson of the Bank of
Anguilla in Mississippi; and Mr. Joseph Haskins from The Harbor
Bank of Maryland; and Mr. Poyo, deputy assistant secretary at
the Treasury.
Thanks for being part of this, and thank you for your
willingness to serve and doing all you do. And we are here
today to examine the Treasury's Department budget request for
fiscal year 2022. Treasury's offices execute multi functions,
important functions that promote economic growth, and combat
illicit finance, administer the internal revenue code, and
operate the Federal Government's collection systems, and
deposit system.
Secretary Yellen, in addition to the traditional
responsibilities, you really have a full plate. You have also
are going to execute emergency response programs for a variety
of industries and businesses. And since the beginning of the
pandemic, the Treasury Department has been at the forefront of
all of these relief programs. But unfortunately under the Biden
administration, we have seen government programs that were
intended to be targeted and temporary during the pandemic
become permanent.
And we are also seeing some spending levels warranted only
in times of crisis become common. As these health threats of
the pandemic recede, the Biden administration continues to
press ahead with even greater spending and higher taxes, which
is a concern for me and many Americans, concerning the budget.
But the first time in American history a president submitted a
budget to Congress that proposes annual deficits exceeding $1
trillion deficits in every single year of the next decade.
In fiscal year 2019, the Federal Government spent $4.4
trillion, which is still a truly remarkable sum. Now the Biden
administration proposes to be spending more than $6 trillion
next year, and in every fiscal year thereafter. As a result,
the Biden budget would add $15 trillion to the national debt,
over the last 10 years.
And 10 years ago I remember being really concerned about
the debt levels, and now in 2011, that just doesn't seem that
long ago that, you know, just recently this has been occurring,
and I think about the timeframes and timelines when Prince
William married Kate Middleton that year in the so-called
``wedding of the century'', just wasn't that long ago. But in
2011, the U.S. debt stood at $14 trillion total, in 2011. And
in 2031, 10 years from now, the national debt will rise to $39
trillion under the Biden administration's spending plan. Let me
say that again, $39 trillion, from $14 trillion to $39 trillion
in 10 years.
So I look forward to hearing from you, but these are
certainly the concerns that I have for the Department and your
funding request.
Thank you, Mr. Chairman.
Senator Van Hollen. Thank you, Senator.
We have been joined by Senator Kennedy as well. Welcome.
And Madam Secretary, let me turn it over to you for your
opening statement.
STATEMENT OF HON. JANET YELLEN, SECRETARY OF THE
TREASURY
Secretary Yellen. Thank you. Chairman Van Hollen, Ranking
Member Hyde-Smith, thank you for inviting me to join you today,
I look forward to your questions.
But first I want to briefly discuss the state of our
economy and the state of the Treasury Department, because I
believe one depends on the other. When I took office back in
January, the most urgent problem confronting our economy was
obviously the pandemic, helping people make it to the other
side of the crisis, and ensuring they were met there by a
robust recovery.
Thanks to this Congress and its passage of the American
Rescue Plan, I believe we are well on our way toward that goal.
However, the ARP and its predecessor legislation are not self-
executing. As you know, in order for relief dollars to
effectively reach their intended targets, we have to stand up
and manage new Federal programs.
Treasury has been tasked with much of this work and we are
proud to do it, but our challenge is that while our portfolio
has grown to match the urgency of this moment, our annual
budget has not grown in tandem, and the funding provided to
administer new programs is temporary. Not accounting for
inflation, our annual budget is still at the same enacted level
as in 2010, and critical policy offices like domestic finance,
economic policy, and tax policy have seen their budgets cut by
as much as 20 percent since 2016.
The mismatch is very stark, when you take a moment to scan
the new bodies of work we have undertaken. Treasury has built a
$350 billion program to help State, local, and Tribal
governments start operating normally again. The CERTS program
will provide $2 billion to bus and ferry companies. There are
two separate multi-billion-dollar programs to help people pay
their rent and mortgages. And of course, Treasury administers
economic impact payments. The IRS entered the pandemic as an
agency that processes tax filings and returns once a year, and
managed to marshal its forces to disperse more than 460 million
payments totaling approximately $800 billion across three
separate tranches.
Now the IRS is preparing to make monthly payments of the
expanded child tax credit to families of more than 88 percent
of American children. Our team has done valiant work
implementing these programs with the resources at our disposal.
But we cannot continue to be good stewards of this recovery,
and tackle the new bodies of work that Congress assigns to us
in the years beyond, with a budget that was designed for 2010.
Our Administration has released its formal budget, and
there are several critical areas where funding is needed. For
instance, the Financial Crimes and Enforcement Network, FinCEN,
is tasked with building a massive database that collects and
secures beneficial ownership information, but Congress has not
yet provided any funding to do it.
Then there are the Community Development Financial
Institutions. Congress has dramatically expanded funding for
CDFIs with supplemental appropriations, and rightly so. These
institutions are very effective at injecting capital into areas
the financial sector has not traditionally served well.
However, it is challenging for the CDFI Fund to distribute
greater resources and scale these programs without additional
administrative funding.
The IRS is in need of additional resources, too. Over the
next 10 years, the American people could see roughly $7
trillion dollars fall through the cracks of our tax system.
Why? Because many of the country's wealthiest taxpayers do not
pay their full tax bill, and the IRS is not nearly staffed up
enough to ensure compliance.
Today, the IRS has fewer auditors than at any time since
World War II. Our proposal would give the IRS the funding it
needs. For fiscal year 2022, it includes $13.2 billion from
discretionary appropriations, plus $417 million for the first
year of a program integrity allocation adjustment as part of
the multi-year American Families Plan.
Let me just say one final word about the IRS: Many of you
have expressed concern about the recent ProPublica report. I am
deeply troubled by it as well. And it is important to stress
that an unauthorized disclosure of taxpayer information is a
crime, and that it has been referred to the FBI, Federal
prosecutors, and Treasury Department oversight authorities.
We don't yet know what occurred, but all is being done to
get to the bottom of this criminal activity. And we will be
sure to update you as we learn more.
With that, I am happy to take your questions.
[The statement follows:]
Prepared Statement of Hon. Janet L. Yellen
Chairman Van Hollen, Ranking Member Hyde-Smith, thank you for
inviting me to join you today. I look forward to your questions, but
first, I want to briefly discuss the state of our economy and the state
of the Treasury Department. Because I believe one depends on the other.
When I took office back in January, the most urgent problem
confronting our economy was obviously the pandemic: helping people make
it to the other side of the crisis and ensuring they were met there by
a robust recovery. Thanks to this Congress--and its passage of the
American Rescue Plan--I believe we are well on our way toward that
goal.
However, the ARP and its predecessor legislation are not self-
executing. As you know, in order for relief dollars to effectively
reach their intended targets, we have to stand up and manage new
Federal programs.
Treasury has been tasked with much of this work. We are proud to do
it. But our challenge is that while our portfolio has grown to match
the urgency of this moment, our annual budget has not grown in tandem,
and the funding provided to administer new programs is temporary.
Not accounting for inflation, our annual budget is still at the
same enacted level as 2010, and critical policy offices--like Domestic
Finance, Economic Policy, and Tax Policy--have seen their budgets cut
by as much as 20 percent since 2016.
The mismatch is very stark when you take a moment to scan the new
bodies of work we've undertaken.
--Treasury has built a $350 billion program to help State, local, and
Tribal governments start operating normally again.
--The CERTS program will provide $2 billion to bus and ferry
companies.
--There are two separate multi-billion-dollar programs to help people
pay their rent and mortgages.
--And of course, Treasury administers economic impact payments. The
IRS entered the pandemic as an agency that processes tax
filings and returns once a year--and managed to marshal its
forces to disburse more than 460 million payments totaling
approximately $800 billion across three separate tranches.
--Now, the IRS is preparing to make monthly payments of the expanded
child tax credit to families of more than 88 percent of
American children.
Our team has done valiant work implementing these programs with the
resources at our disposal. But we cannot continue to be good stewards
of this recovery--and tackle the new bodies of work that Congress
assigns to us in the years beyond--with a budget that was designed for
2010.
Our Administration has released its formal budget, and there are
several critical areas where funding is needed.
For instance, the Financial Crimes and Enforcement Network--
FinCEN--is tasked with building a massive database that collects and
secures beneficial ownership information, but Congress has not yet
provided any funding to do it.
Then there are the Community Development Financial Institutions.
Congress has dramatically expanded funding for CDFIs with supplemental
appropriations--and rightly so. These institutions are very effective
at injecting capital into areas the financial sector hasn't
traditionally served well. However, it is challenging for the CDFI Fund
to distribute greater resources and scale these programs without
additional administrative funding.
The IRS is in need of additional resources, too. Over the next 10
years, the American people could see roughly $7 trillion dollars fall
through the cracks of our tax system. Why? Because many of the
country's wealthiest taxpayers do not pay their full tax bill, and the
IRS is not nearly staffed up enough to ensure compliance. Today, the
IRS has fewer auditors than at any time since World War II.
Our proposal would give the IRS the funding it needs. For fiscal
year 2022, it includes $13.2 billion from discretionary appropriations,
plus $417 million for the first year of a program integrity allocation
adjustment as part of the multi-year American Families Plan.
Let me just say one final word about the IRS: Many of you have
expressed concern about the recent ProPublica report. I am deeply
troubled by it, as well. It is important to stress that an unauthorized
disclosure of taxpayer information is a crime, and that it has been
referred to the FBI, Federal prosecutors, and Treasury Department
oversight authorities. We don't yet know what occurred--but all is
being done to get to the bottom of this criminal activity. And we will
be sure to update you as we learn more.
With that, I'm happy to take your questions.
Senator Van Hollen. Thank you, Madam Secretary. And I am
pleased we have been joined by Senator Coons as well. And we
will have 7-minute questioning periods for our subcommittee
Members.
Madam Secretary, one of the key planks, the central planks
of the American Jobs Plan is to ensure that big multinational
corporations pay their fair share of taxes, and that we stop
giving companies perverse tax incentives to ship jobs and
equipment overseas.
You have talked about ending the global race to the bottom
where countries cut corporate taxes to keep up with each other,
and that the only winners are those multinational corporations
and their stockholders, not the people in the countries in
which they do business.
I referenced that in my opening statement, today's report
from Reuters, about the G20, to endorse the deal on global
minimum corporate tax. Could you elaborate on why this is
really important to American workers, and American jobs and
wages that we move forward with this proposal?
Secretary Yellen. Thank you for that question. So we are
hoping to gain endorsement, at the G20 for the core pieces of
our international tax proposal. Most importantly, we are trying
to get a very large number of countries through an OECD
process, almost 140 countries are participating in that, and we
are trying to gain agreement that all countries will establish
a minimum tax that their corporations must pay, wherever they
operate in the world.
At the G7 in London week before last, the G7 supported the
idea that this global minimum tax should be set at least at 15
percent. And we are working toward an agreement, a similar
agreement at the G20. Now I think this is really important
because what has happened globally is that labor is a factor of
production that is not mobile. Most people continue to live
where they were born in their native countries.
But capital is highly mobile, and it can move from one
place to another in response to tax differentials and other,
other discrepancies. And that has triggered, over decades now,
what we refer to is a race to the bottom. Countries try to
attract business to their shores by setting lower tax rates
than their neighbors. And then our corporations feel if we have
higher taxes that they are not competitive, and we see them
offshoring activity, real activity, and also profits activity,
and tax havens particularly benefit from that.
And as countries try to out-compete one another, in terms
of cutting their corporate tax rates to attract business to
their shores, we see a race to the bottom in corporate
taxation. And this is really a global problem. And we think
that the only way to solve this problem is to try to get an
agreement among almost all countries and certainly among the
G20 countries that we will stop doing this. That we will agree
that tax--our tax rates will be set at a level, and we are
negotiating on what the rate is, but we are looking for
agreement at least 15 percent.
You know, I think corporations contribute corporate tax
revenue to the Federal coffers amounting to only around 1
percent of GDP. Now, that is less than before the tax law was
passed in 2017, and it is less than in most of our neighbors.
And to raise revenue for the important programs that we truly
need, investment in public infrastructure, investment in R&D,
investment in our people to make our companies truly
competitive and to make our workers and people who live and
grow up in this economy, able to compete, we need tax revenue
to support those programs.
So we are very hopeful that this initiative will enable
companies, globally, to compete on the things that should
really matter, the quality of their ideas, and the skills of
their people.
Senator Van Hollen. Thank you, Madam Secretary. Of course,
the corporations here in the United States benefit from an
educated workforce, a well-trained workforce, and that does
require investments.
With my remaining time, Reuters published an analysis
yesterday, finding that U.S. corporations currently pay
significantly less than their foreign competitors today, and
that this would remain the case even if the full Biden tax plan
was enacted. In fact, they found that U.S. corporations
currently pay an effective tax rate of 16 percent compared to
24 percent for their foreign competitors. And that if the Biden
plan was enacted, those U.S. corporations would pay an
effective rate that is 5 points higher, or about 21 percent.
Does that analysis, line up with your Treasury Department
analysis? And what does that say with respect to some of the
concerns that have been raised about the Biden tax plan?
Secretary Yellen. So I have read the Reuters article, I
have not had a chance to review the analysis carefully, but it
is in line with our own thinking. I can tell you that at this
level of statutory rates, as well, the United States' corporate
rate, including Federal and State, is below the G7 average, and
if we were to raise it in line with the President's proposals,
it would remain in the middle of the pack.
Senator Van Hollen. Thank you, Madame Secretary.
Senator Hyde-Smith.
Senator Hyde-Smith. Thank you, Mr. Chairman.
Madam Secretary, you have already referenced the article
that was in ProPublica, a leaning--a left-leaning media outlet
that has published a series of articles that disclose some very
confidential information in very significant detail. But these
unauthorized disclosures occurred amid renewed calls that
significantly increased taxes, and expand the funding and
responsibilities of the IRS.
The same agency that pursued a vendetta against
conservative groups during the Obama administration, and since
you have referenced that, can you tell me what the Department
is doing to prevent further unauthorized disclosures?
Secretary Yellen. Well, there are very important
safeguards, many of them in place to protect taxpayer privacy.
And this is an extremely important priority, and one that we at
Treasury care deeply about. Part of the money that we are
asking to be allocated to the IRS would better enable it to
modernize its IT systems, and put in place investments that
would better enable it to protect against threats to the
security of the tax system.
So I do think we need to modernize the technology that the
IRS has. A striking statistic I can share with you is that the
IRS faces 1.4 billion cyber attacks each year, and they are
running the tax system on technological infrastructure that
dates back to the 1960s. So it is a priority for Treasury. It
is a priority for the IRS. We will keep it absolutely top
priority to protect private information, but we also need to
beef up the resources of the IRS to enable it to enhance its
defenses.
Senator Hyde-Smith. And in addition to the private taxpayer
data that was leaked, a separate Treasury employee was
sentenced to prison earlier this month, following her
conviction for unlawfully disclosing suspicious activity
reports, and other sensitive information, and your budget calls
for new reporting requirements to the IRS for inflows and
outflows for businesses, as well as personal accounts. How are
Americans to trust the security of the Treasury Department data
when private information is shared publicly again and again?
Secretary Yellen. Well, again, I agree that protection of
private information is critically important, and we must take
every step to ensure that it is protected. The IRS obtains
billions of reports every year on W-2 forms, and 1099s, and
other information that is provided to the IRS to enable them to
check returns, to make sure that income is being reported
accurately.
I can tell you that studies by the IRS show that, for
example, wage and salary income that is reported to them on W-
2s is almost completely 98 percent, 99 percent reported
faithfully on tax returns. That $7 trillion over the next
decade tax gap that I have cited, largely reflects individuals
or corporations where sources of income are not reported on a
regular basis to the IRS.
And that is why adding to the information flow is really
critical at trying to reduce the size of that gap. And the
proposal that, the President has put forth in the American
Families Plan, it is really only calling for two additional
pieces of information that would be added to the Form 1099-INT
on which financial institutions routinely provide the IRS with
an annual report of interest paid on accounts.
And the two pieces of information would be the aggregate
inflows into the account during the year, and the aggregate
outflows. And those would not be detailed transaction level
information. This would be directly communicated along with
other routine information to the IRS, and it would better help
the IRS tax audit crew, target their resources in deciding
where audits are in order. So, of course, every step would be
taken to protect that information.
Senator Hyde-Smith. Okay. And referring to the trillions of
dollars, Congress has appropriated nearly $6 trillion in
emergency spending during this pandemic. And there are some
calls in Congress for an additional $6 trillion in
``infrastructure'' spending that seems to include everything
under the sun. And these are mounts are in addition to the
regular discretionary and mandatory spending levels each year.
But consumer prices rose by 5 percent last year, the largest
increase since 2008. And according to a survey conducted by the
Federal Reserve Bank of New York, consumer expectations, are
that inflation will be 4 percent over the next year.
These trends are vastly different than your budget's
assumption of inflation reaching only 2 percent. And you have
called these trends transitory and the result of the economy
reopening after the pandemic. Do you still believe this? And
what data points would cause you to change your mind on these
trends only being temporary?
Secretary Yellen. Well, I do continue to believe that I
think that for 2021 inflation will come out at a high rate, as
you mentioned, but remember that in the previous years,
inflation was exceptionally low. And part of what is going on
is that prices that fell dramatically, when the pandemic hit
the economy, airfares, hotel, room rates and the like, now that
the economy is opening back up again, some of those prices are
reverting toward more normal levels.
So we do have a bunch of supply bottlenecks. It is a bumpy
path to reopening, but the economy is growing successfully, and
creating jobs, and I believe that after the year is over
inflation rates will go back to normal. Most measures of
inflation expectations remain low, and well contained and most
professional forecasters and the signals we get from markets
about inflation expectations that are--we can read from
inflation compensation in the treasury market suggests that
beyond this brief period of, say, a year in which inflation is
high, that inflation expectations going further out are very
stable in the neighborhood of 2 percent, and that inflation
will revert to those levels.
Senator Hyde-Smith. Okay. I would like to thank you for
your time. Thank you.
Senator Van Hollen. Thank you, Madam Secretary.
Please, we are joined by the Chairman of the Full
Committee. And I recognize Senator Leahy.
Chairman Leahy. Thank you very much. Secretary Yellen, it
is awfully good to see you, and thank you for being here. What
is the saying about, may you live in interesting times. You
have done that both at the Federal Reserve, and now. I am
delighted you are there. I know that the Treasury Department
over the past year has had to undertake all kinds of
initiatives to administer the funding as directed by Congress
through the CARES Act, the historic American Recovery Act, and
so on.
But let me go me go into that a little bit. The American
Recovery Plan provided $350 billion to support State, local,
Tribal, and territorial governments to deal with the
consequences of COVID. It was specifically allocated money to
States and territories, separately to counties, cities, and
towns. Now, some of the States, of course, do not have a county
government, like my own State of Vermont. In those cases, the
law states, pretty clearly, the money be provided directly to
the States, then passed from the State onto the local
municipalities based on population.
In most of the country, that is happening, but the Treasury
Department has somehow chosen to rely on a definition from the
Census Bureau to define what constitutes a county government--a
definition that was not specified in the law. I remember when
the law was written, and it was not specified there. It gives a
totally strange conclusion in our State.
Counties in Vermont are not generally units of government.
We have 14 counties; the only county officials in Vermont are
part-time side judges. I think they get paid a certain amount
per day. They run our county courts, but even that is a minimal
thing to make sure the lights get turned on, and the doors get
opened. No other services.
All our health, education and government services are
provided by local municipalities. Yet, under the Treasury's
arbitrary decision to apply the Census Bureau's definition,
these side judges who might, throughout the whole State,
normally handle a few thousand dollars, are now going to be
required to administer over $121 million of COVID relief
dollars. They are kind of like: What do we do with this? Or
just say: You know, we have no way of administering this. We
will give it back to the Treasury.
Well that is not what the law intended. It was supposed to
go to the States and municipalities. Now, your Department has
been speaking with my staff, and with the others in the Vermont
delegation. I just want to know when will the Treasury
Department administer the law--as we specifically wrote it, and
intended it--and release the money to the State of Vermont?
Secretary Yellen. So Senator, I certainly understand your
concern and, you know, our staff has done its best to
administer the funds in line with its understanding of the law.
The country is complicated, counties in different States have
different kinds of governmental responsibilities and they try
to make those distinctions.
But we want to work with you to find a path forward and to
resolve the concerns that you have. And I--you know, you have
pointed out that there are distinguishing factors with respect
to how Vermont counties operate relative to counties in many
other States across the country. You know, if you will work--
have your office work with our staff, we will try to find a----
Chairman Leahy. We are doing that now. I thought the law
was pretty clearly written. If you don't have a county
government as such, I mean if you have got a county government
where two people arrange to have the snow plowed around the
courthouse and they suddenly got 10- $15 million. They are
like, even in our best year we don't get that much snow.
I think it is written in such a way, the law--read it, as I
read it--is written the money goes to the States, and the
States can then distribute it to the municipalities. We do have
municipalities, of course, we do have everything from police
forces to normal town, city government, and they could use the
money. So we are working with your staff, but please tell them
to go back and read, read the law. I think it is pretty clear
on the face.
Secretary Yellen. I think part of the issue was: Do the
counties have governmental responsibilities, and it sounds like
in Vermont, they have some, but they are exceptionally limited.
Chairman Leahy. It is like, turn the lights on in the
courthouse. If it is a county with a county court.
Secretary Yellen. So my staff understand that this is a
significant concern and we will work closely with you to try to
find a resolution.
Chairman Leahy. Well, I would also point out another thing.
In rural States the IRS is one of the only elements of the
Federal Government that taxpayers interact with annually. Now,
if you don't have Internet service, or they rely on phone or in
person, it is a problem because the IRS is nearly impossible to
reach by phone or in person, they are getting less and less
centers.
I live 6 miles outside of our State capital, I pay premium
amount for my Internet service and there have been days that it
has worked. We usually mark it down the calendar as a very
special day. We celebrate those. I think I paid for it for a
year, and I can count on at least a week or two out of the
year.
But the point is, I don't have to worry. I go to my office
at Montpelier or Burlington or home down here. I have got
things I have to go back and forth. I can do it. But in many
rural areas, in States that we all represent, that is not the
case. So, take a look at this because we can joke about it, but
it is a real problem in rural America.
Secretary Yellen. And the funds can be used for broadband
and the Rescue Plan contained other funds and programs also
that can be used for broadband.
Chairman Leahy. But again, I am delighted to see you here,
and I offer you congratulations.
Secretary Yellen. Thank you.
Chairman Leahy. Or condolences, whichever they might be.
Secretary Yellen. Thank you very much, Senator Leahy.
Senator Van Hollen. Thank you, Senator.
Senator Kennedy.
Senator Kennedy. Thank you, Mr. Chairman.
Madam Secretary, thank you for being here. According to the
Department of Labor, I believe inflation was--annualized was 5
percent in May. I know you are not clairvoyant, but you are
experienced. Where do you think inflation will be at the end of
this year?
Secretary Yellen. Well, let me go to 2022.
Senator Kennedy. No, if you could go to the end of 2021
first for me.
Secretary Yellen. So I believe that my expectation,
although there is a lot of uncertainty, is that the monthly
data, the data that would pertain to what happened in a given
month, that those numbers will come down, but----
Senator Kennedy. But by the end of this year, do you expect
the inflation to be more than 5 percent or less?
Secretary Yellen. I believe that the monthly numbers are
likely to generate annual inflation rates. If you take the
monthly number and ask what would inflation be if it continued
at that pace for a year, I believe that will come down toward 2
percent, but typically inflation rates----
Senator Kennedy. Madam Secretary, I am sorry to interrupt
you, but my question was pretty simple. Right now in May, on an
annualized basis, we both know what that means, inflation was 5
percent. I know you are not clairvoyant, but where do you think
it will be at the end of this year?
Secretary Yellen. So most, the type of inflation number you
are talking about compares to the level of prices this month
with what they were a year prior.
Senator Kennedy. That is correct.
Secretary Yellen. And that is different than what happened
over the span of the month.
Senator Kennedy. I understand that, but I am asking you----
Secretary Yellen. But by the end inflation----
Senator Kennedy [continuing]. Based on a year ago, this is
not a complicated question. I am not trying to be rude, but
this is not a complicated question. We are at 5 percent now
based on where it was a year ago. So now we know what we are
both talking about.
Secretary Yellen. For the rest of this----
Senator Kennedy. Will it be higher at the end of this year,
or will it be less?
Secretary Yellen. Twelve month--I believe it will come
down.
Senator Kennedy. Do you think it will be less by the end of
this year.
Secretary Yellen. Than 5 percent. Yes.
Senator Kennedy. Okay. What makes you think that?
Secretary Yellen. Because I believe that as the economy is
opening up again, prices that fell enormously at the beginning
of the pandemic are returning now back toward normal levels.
And so what we are seeing in these year-over-year comparisons
is of prices which are now reasonably normal, or in many cases
at levels that are still somewhat below normal, we are
comparing those levels with highly depressed prices----
Senator Kennedy. I understand that.
Secretary Yellen [continuing]. The year before.
Senator Kennedy. I understand that.
Secretary Yellen. And that will----
Senator Kennedy. I have got a limited amount of time, Madam
Secretary. If you are thinking 5 percent inflation in May, and
you think it will be less at the end of the year.
Secretary Yellen. Yes.
Senator Kennedy. Then why did the Federal Reserve announce
that it was going to--thought they were going to have to move
their interest rate increases sooner and faster than what they
had originally expected?
Secretary Yellen. Well, I don't really want to comment on
the Fed, but I would simply say that is not an announcement
that they made.
Senator Kennedy. Well, the market sure reacted; sounds like
the Federal Reserve is worried about inflation.
Secretary Yellen. I would just refer you to the comments
that Chair Powell made in testifying yesterday, and at his
press conference.
Senator Kennedy. But I am talking about the action the
Federal Reserve took. The Federal Reserve met recently, and
they said: Look, we know we told you this, but things have
changed. And we are now telling you that we are likely to have
to raise rates sooner and faster----
Secretary Yellen. And----
Senator Kennedy [continuing]. Let me just finish--than we
originally told you. Why do you think they did that?
Secretary Yellen. That is the----
Senator Kennedy. Because they are concerned about
inflation, aren't they?
Secretary Yellen. That is not what they did. Several
individuals----
Senator Kennedy. Sure it is.
Secretary Yellen [continuing]. Several individuals wrote
down in their own individual forecasts, which were published,
that they saw it appropriate to raise rates sooner than
previously.
Senator Kennedy. Why then did the Federal Reserve last week
raise the interest rate on excess reserves?
Secretary Yellen. That is a technical adjustment that they
made because the Federal funds rate had fallen to the very
bottom of their target range. And it was a purely technical
adjustment. Look, it is not appropriate for me to discuss Fed
policy, or I don't want to comment on----
Senator Kennedy. With no disrespect, but it is. It is. I am
not asking you to make Fed policy. I am asking your opinion.
And usually when the Federal Reserve raises interest rates on
excess reserves, they are trying to contract money supply.
Secretary Yellen. No. It is----
Senator Kennedy. And the reason they are trying to contract
money supply is because they are worried about inflation.
Secretary Yellen. It is a purely technical adjustment. They
made clear in that the stance of monetary policy has not
changed at all, but because short-term, overnight rates were
drifting to the very bottom of their target range, they made
small adjustments to the policy rates----
Senator Kennedy. Okay. Let me--I will stop because I have
only got a minute left. Here is my worry, Madam Secretary. And
I hate to have to interrupt you, but we only have so much time.
I know your job is to put the best face on it, and I understand
the Federal Reserve's job is to put the best face on it. But
inflation at 5 percent annualized gets my attention.
When the Federal Reserve says, or even certain Members,
they say: nothing to worry about here, nothing to see, but by
the way, we are probably going to have to raise interest rates
sooner and faster than we thought. And when I see them raise
the interest rate on excess reserves, to get money out of the
money supply; that tells me they are worried about inflation.
And here is my question. Nobody is clairvoyant. A lot of
these experts that you talked about never called the recession
in 2008, 2009, and a lot of these were experts at the Reserve--
at the Federal Reserve, what if they are wrong?
And the President has been adamant that he is not going to
raise taxes on middle-class Americans. He is allowing that to
happen right now, because inflation prices are rising higher
than wages, and 5 percent inflation is a tax, it is a tax on
food, it is a tax on energy, and it is a tax on everything. And
we can say it is temporary, but the actions of the Fed indicate
to me, they don't think it is temporary. Your thoughts?
Senator Van Hollen. Madam Secretary. I am going to have to
leave it at that, Senator. We will have another round, but----
Senator Kennedy. Well, others went over, Mr. Chairman.
Senator Van Hollen. But Senator----
Senator Kennedy. Others went over.
Senator Van Hollen. Actually they went over about the same
time. But let me call him on----
Senator Kennedy. Well, can I get an answer?
Senator Van Hollen [continuing]. On the next--we will have
another round, because I am just trying to keep everything
within the fair range here. I understand that Senator Coons has
been very patient, has been understanding. Let Senator Moran
have a short statement, and then we will go to Senator Coons.
Senator Moran. Chairman, thank you. And Senator Coons,
thank you for allowing me 30 seconds. I hope that is not a
terrible burden on your schedule. Thank you.
Madam Secretary, you and I visited, I questioned you in the
Banking Committee in March, and I just wanted to be here today.
I have two other hearings that are ongoing at the same time,
but I wanted to be here to thank you for making clear in
Treasury's, updated frequently-asked-questions. It was just
released today, that the Coronavirus State and local fiscal
recovery funds may be used, may be used for grants to small
businesses, to nonprofits, to cover utility costs.
This will alleviate a lot of consternation across Kansas
and Midwestern States impacted by a February cold snap and
elevated natural gas prices in the midst of dealing with the
economic impacts of the pandemic. So thank you for making that
clear. And I assume that I am telling the story as it is, as
true.
Secretary Yellen. I believe so. Thank you.
Senator Moran. Yes ma'am.
Senator Van Hollen. Thank you, Senator.
Senator Coons.
Senator Coons. Well, thank you, Chairman Van Hollen,
Ranking Member Hyde-Smith. Senator Moran is going back to serve
as the Ranking on the CJS subcommittee hearing that I, too, I
am supposed to go back to. I am very much looking forward to
the second panel.
Appreciate Secretary Yellen's testimony and leadership; and
Chairman Van Hollen, good to see you leading this subcommittee
so ably; and to see the team that supports and makes possible
the work of FSGG.
Madam Secretary, if I might, you and five other former
Treasury secretaries have noted year-after-year, Congress-
after-Congress, that the IRS lacks the resources to effectively
and fully enforce tax payment. In fact, you made the somewhat
striking and memorable assertion that the IRS at this point has
the fewest auditors since the Second World War, and the tax gap
is estimated as somewhere between $600 billion and a trillion a
year, and it is something that is the topic of active
negotiation right now, in terms of how to pay for a bipartisan
infrastructure bill.
How would the IRS ensure that new auditors, new enforcement
efforts are focused on high net worth individuals, individuals
with complex financial situations, and international, and
multinational corporations, which are more difficult to audit,
as opposed to lower-income people whose returns are more simple
to audit?
Secretary Yellen. Well, the purpose of the mandatory
funding that the President has requested for the IRS, he has
requested $80 billion over a decade, is really supposed to be a
long run, program allotment that would enable IRS to hire,
train auditors who have the skills and a long-term perspective
to be able to focus on high-net-worth individuals, high-income
individuals, and partnerships and complex arrangements in
corporations. That is where the tax gap is.
Senator Coons. Right.
Secretary Yellen. And the purpose of that funding would be
to improve compliance in those groups where underreporting is
highest.
Senator Coons. And what is your rough estimate at this
point of the multiplier for dollars spent on additional
enforcement dollars received in terms of additional compliance?
Secretary Yellen. I believe we estimate that the $80
billion appropriation would generate around $240 billion over
10 years. The long-run payoff is, I think it is estimated by
the IRS to be close to five to one. And I want to emphasize,
you know, it takes a long time----
Senator Coons. Right.
Secretary Yellen [continuing]. Both to build up the
resources.
Senator Coons. Understood.
Secretary Yellen. And these complex cases take many years,
and so there are enormous gains beyond the 10-year horizon, as
well, that you would see in the budget. So I believe the IRS
estimates are something like five to one in terms of income
collected per dollar spent.
Senator Coons. Madam Secretary, for the years that I served
on FSGG, I have also paid close attention to the most frequent
complaints from Delawareans who often reach out to my
constituent services folks to say that they are having
difficulty getting someone on the phone, getting their tax
returns and refunds processed, more recently getting the
economic impact payments. I am assuming that an increased
budget for IRS taxpayer services will directly benefit and
impact that. And I would love to hear your thoughts on that.
But first, I am going to go to a more complex subject for a
minute, since we may have a return of another Member who wants
to question. I am very interested in how you see carbon border
adjustments working out, both competitively for the United
States and in terms of its impact. I am someone who is
introduced to a number of bills, one bipartisan, more recently
ones that are just Democrats that would place a price on
carbon, and I am convinced that that has the single greatest
leverage in terms of achieving progress on climate change.
I am the co-chair of the bipartisan Climate Solutions
Caucus, and we have debated and discussed this with many
leaders, from the private sector, from financial services,
different advocates and organizations. And I think that there
is a moment here where, as discussed at the G7, the EU is on
the verge of implementing a border carbon adjustment, and there
is the possibility that the United States, without imposing a
fee on carbon, could simply deem the social cost of carbon and
of other greenhouse gases at a certain amount, and begin to
implement that in order to avoid other countries imposing a
carbon tariff against our exports and making us less
competitive.
How do you see that playing forward? What do you think are
the models for the actual cost of greenhouse gases sufficiently
detailed for us to be able to implement something like this?
And how is the administration thinking about border carbon
adjustments in ways that would keep American industries and
services competitive globally?
Secretary Yellen. So I think we are just beginning to get a
handle on this question. There is a lot of work to do to think
this through. I mean, as you know, the President has proposed
an ambitious and comprehensive agenda to try to reduce U.S.
greenhouse gas emissions, and he has made our nationally-
determined contribution----
Senator Coons. Right.
Secretary Yellen [continuing]. Is an ambitious one. And,
you know, he has proposed to do that through a whole variety of
different carrots and sticks. Remove existing subsidies for
fossil fuels, tax credits for renewables and for electric
vehicles. He hasn't taken the approach that some countries have
of simply having one system with a single carbon price.
Senator Coons. Right.
Secretary Yellen. But I think that if we do make the
progress that we hope for that the areas that are covered will
be covered, say by EU carbon border adjustment, that we will
also be producing those goods in a manner that is
environmentally friendly. And if we are able to do that, my own
view would be that we should not be subject to, say, the EU's
carbon adjustment price.
Senator Coons. Right. So if I hear you right to summarize,
in a larger sense, if the Biden administration's plan and
agenda is fully implemented, we ought to be able to go to our
Canadian neighbors, to our EU trading partners and say, we
shouldn't be subject to this border adjustment tax, because we
are making robust progress towards our national goals. Let me
just close, and I would love to hear more from you about this.
Secretary Yellen. Certainly.
Senator Coons. I was talking to ``Jay'' Powell about this
yesterday, and the research that is being done within the
Federal Reserve System, because there is a lot of research to
be done for this to be better understood. I just want to thank
you for what I think is an appropriately robust request for
funding for the GEF and the Green Climate Fund, a modest but
necessary request for $15 million to continue to implement the
Tropical Forest and Coral Reef Conservation Act. I am working
with Senator Portman on reauthorizing it.
And I will just simply note for the record that my
constituents are pleased when the wait times go down, and just
desperately annoyed and angry when the wait times go up, and
improving IRS service standards is something that I would hope
all of us could agree is well worth investing in.
Secretary Yellen. I completely agree. I mean, that will be
an important use of funds, is to greatly improve taxpayer
service.
Senator Coons. Thank you very much, Madam Secretary. Thank
you, Mr. Chairman.
Senator Van Hollen. Thank you, Senator Coons.
Madam Secretary, we are going to do another 5-minute round
of questions.
Secretary Yellen. Okay.
Senator Van Hollen. I don't know if--whether other Members
of the subcommittee will or will not be returning. But I do
want to quickly turn to the debt ceiling, because as you well
know, the debt ceiling is currently suspended until July 31,
just end of next month. After that point, the Treasury
Department can prevent a default for a brief period of time
with its so-called ``extraordinary measures'', but Congress
must ultimately raise the debt ceiling to prevent a default of
the full faith and credit of the United States.
There are murmurings that some Members of the Senate may
want to try to use this as a political cudgel to extract
concessions on other things. Could you speak briefly to the
consequences of a default on our national debt, or even
creating uncertainty around whether or not we are going to make
good on our full faith and credit?
Secretary Yellen. I think defaulting on the national debt
should be regarded as unthinkable. Failing to increase the debt
limit would have absolutely catastrophic economic consequences.
It would be utterly unprecedented in American history for the
United States Government to default on its legal obligations. I
believe it would precipitate a financial crisis. It would
threaten the jobs and savings of Americans, and at a time when
we are still recovering from the COVID pandemic.
I would plead with Congress simply to protect the full
faith and credit of the United States by acting to raise or
suspend the debt limit as soon as possible. Preferably, you
mentioned July 31 is the date that the debt limit suspension
ends, and I would really urge that the debt limit be raised or
suspended again before that.
And, you know, this is not about authorizing additional
spending, this is simply about the government paying its bills,
making good on the payments that are implied by the tax and
spending decisions that Congress has made.
Senator Van Hollen. I appreciate your underscoring that
very important point. And this is about paying the bills that
are already due and owing. Do you have an estimate as to how
long use of the emergency measures would last us in this
current economic environment?
Secretary Yellen. Well, we are constantly trying to refine
our notions on that. I don't have anything specific but, you
know, these are times, especially because of the pandemic and
the programs that we are engaging in when there is a lot of
uncertainty around payment flows, and the timing of payment
flows. And, you know, we don't want to just look at what is the
most likely time that we could make it too with extraordinary
measures.
We can't tolerate any chance of defaulting on the
government debt. And there is a lot of uncertainty. It is
possible that we could reach that point while Congress is out
in August. And I would really urge prompt action on raising--
raising the limit or suspending it.
Senator Van Hollen. Thank you, Madam Secretary. I just want
to put two issues on your radar screen. And I don't expect an
answer today but--so Senator Toomey and I, in the last
Congress, authored the Hong Kong Accountability Act, it was
passed into law. I was pleased to see the Biden administration
sanction a number of officials who have been complicit in
undermining democracy and human rights in Hong Kong. But that
law also requires sanctions against any financial institutions
that are aiding and abetting, or facilitating those
individuals.
And Treasury has not imposed sanctions on those financial
institutions. Maybe you haven't been able to identify any such
institutions yet.
Secretary Yellen. We have not.
Senator Van Hollen. I think Secretary Toomey and I are in
the process of asking for a briefing, with respect to
treasuries capacity to monitor these things.
The other thing I wanted to mention is the BRINK Act. This
is also legislation that Senator Toomey and I, and others
pushed for, did apply secondary--secondary sanctions on North
Korea.
Secretary Yellen. Yes.
Senator Van Hollen. And here there is a discrepancy because
the U.N., a panel of experts just earlier this year, you know,
found that there were huge holes in the sanctions regime, that
there were Chinese entities that were essentially facilitating,
you know, payments to North Korea that would be subject to
secondary sanctions. And so, we do want to follow up with you
on that as well.
Secretary Yellen. We would be--we would be glad to discuss
that in follow up.
Senator Van Hollen. Thank you, Madam Secretary. I don't
know if--great.
Madam Secretary, thank you for your testimony. Thank you
for requesting this increase in funds for CDFIs, which play an
essential role. And now we are going to get some first-hand
accounts of how important they are. Thank you. Thank you very
much.
Secretary Yellen. Thank you very much.
Senator Van Hollen. All right. Next, we are going to bring
up our distinguished next panel. All right, welcome, everybody.
We have three terrific witnesses for our next panel.
Mr. Noel Andres Poyo, who is the deputy assistant secretary
at Treasury, for Community and Economic, Development, and is a
real expert in this area of CDFIs, and I have had the privilege
of talking to him previously, and grateful for your being here.
We also have Mr. Joseph Haskins, Jr. He is the chairman and
CEO of The Harbor Bank of Maryland, which is in Baltimore. And
on a personal note, somebody who I really rely on for advice on
how we can make sure that our most distressed businesses, and
businesses that are sometimes left out of the financial system,
get the support and help they need, which was important, of
course, during the pandemic, but also important to make sure we
build an economy and a community that ensures that everybody
has a chance to succeed. So I am really grateful that he is
here.
And I am going to turn it over to Ranking Member Hyde-Smith
to introduce our third panelist.
Senator Hyde-Smith. Thank you, Mr. Chairman. And I am
really pleased to have with us Andy Anderson of Anguilla,
Mississippi, and that is kind of hard to pronounce, and we are
a long way from Anguilla, Mississippi, right now, but I so
appreciate each of you coming, and be willing to give of your
time, because it is really important that we hear from you and
what you go through.
And Andy Anderson chairs the Board of Directors and
Executive Committee at the Mississippi Bankers Association, he
is the chairman this year. He has 37 years' experience in the
banking business, and all at the Bank of Anguilla. So if you
ever visit Mississippi, be sure to come by and visit with him.
Thank you.
Senator Van Hollen. Thank you.
Mr. Poyo, why don't we start with you as the administration
witness, and then we will turn to our other two witnesses.
STATEMENT OF NOEL ANDRES POYO, DEPUTY ASSISTANT
SECRETARY, COMMUNITY AND ECONOMIC
DEVELOPMENT, U.S. DEPARTMENT OF THE
TREASURY
Mr. Poyo. Very good. Thank you, Chairman Van Hollen,
Ranking Member Hyde-Smith. It is my honor and pleasure to speak
with you today. My name is Noel Andres Poyo, I am the deputy
assistant secretary of Community and Economic Development at
the Treasury Department. And I am also a former CEO of a CDFI.
And I appreciate the opportunity to provide testimony on
Treasury's fiscal year 2022 budget, and specifically about
community development, financial institutions, and Treasury
CDFI. So CDFIs, as you both know, are specialized financial
institutions, including loan funds, credit unions, community
banks, venture capital entities that have a common goal of
filling financing gaps in underserved and low-income areas,
with responsible financial products and services.
CDFIs are accountable to the communities they serve, and
possess a particular sensitivity to the needs of local
residents and businesses. This is a key reason that CDFIs often
deliver capital in places where traditional banks have not met
the market demand. CDFIs provide not only financing, but also
development services to help prepare borrowers for success.
Since the creation of the CDFI fund more than 25 years ago,
CDFIs have played an increasingly important role in opening
access to capital and economic opportunity in low-income
communities and for low-income people. And so keep in mind that
at the end of 1997 there were 196 certified CDFIs with total
assets of $4 billion. Now, there are more than 1,200 certified
CDFIs operating in every State and with assets of over $220
billion.
The collective capacity of this field to deliver fair and
responsible financing is growing rapidly. And before this year,
the CDFI Fund had awarded nearly $4 billion to CDFIs and other
community development entities. CDFI Fund has also allocated
$61 billion in tax credits to the New Markets Tax Credit
Program and guaranteed $1.6 billion in bonds through the CDFI
Bond Guarantee Program. And as you well know, the CDFI Fund
investments are leveraged many times over.
So the Consolidated Appropriations Act, 2021, made
available historic funding for CDFIs under three programs being
implemented by Treasury. $1.25 billion in grants to CDFIs under
the Rapid Response Program, through the CDFI Fund $1.75 billion
in grants to CDFIs under the Minority Lending Program, and then
$9 billion for Treasury investments under the Emergency Capital
Investment Program, which is available to credit unions and
banking entities that are either CDFIs or minority depository
institutions.
You may have heard on June 15, the Vice President and
Secretary Yellen announced that the CDFI fund was awarding
$1.25 billion through the Rapid Response Program to 863 CDFIs
across the country. More than 70 percent of all certified CDFIs
submitted applications. The RRP awards will provide CDFIs with
an unprecedented level of flexible capital that will allow for
growth across the industry.
The Minority Lending Program, the $1.75 billion program
will be rolled out later this year. And ECIP, the Emergency
Capital Investment Program, will encourage low- and moderate-
income community financial institutions to augment their
lending to support small businesses and consumers in their
communities.
Under this program, Treasury will invest up to $9 billion
in capital into depository institutions that are CDFIs and
MDIs, minority depository institutions.
I want to turn to the CDFI budget. The CDFI funds currently
offers programs to help CDFIs and other community development
entities access financial products and services in low-income
communities. And in fiscal year 2022 the CDFI Fund request $330
million that is approximately $60 million above the fiscal year
2021 enacted level, an increase of 22 percent. It includes
primarily increases in the mainline CDFI Program, the FA
Program, about a 30 percent increase, similarly about a 30
percent increase in the Native American CDFI Assistance
Program. And about a $4.6 million increase in administrative
dollars.
Additionally, we are requesting $500 million in a
commitment authority and proposing legislation to expand the
Capital Magnet Fund as a part of the American Jobs Plan.
So on behalf of everyone at Treasury, and particularly
within the CDFI Fund, I would like to express our gratitude to
the subcommittee, to the subcommittee for its support, and look
forward to working with you in this coming year.
[The statement follows:]
Prepared Statement of Noel Andres Poyo
introduction
Chairman Van Hollen, Ranking Member Hyde-Smith, and Members of the
subcommittee, it is my honor and my pleasure to speak with you today.
My name is Noel Andres Poyo. I am the Deputy Assistant Secretary for
Community and Economic Development at the Treasury Department. Thank
you for the opportunity to provide testimony on Treasury's fiscal year
2022 budget and specifically about Community Development Financial
Institutions (CDFIs) and Treasury's CDFI Fund.
CDFIs are specialized financial institutions, including loan funds,
credit unions, community banks, and venture capital entities, that have
a common goal of filling financing gaps in underserved and low-income
areas with responsible financial products and services. CDFIs are
accountable to the communities they serve and possess a particular
sensitivity to the needs of local residents and businesses--this is a
key reason that CDFIs often deliver capital in places where traditional
banks have not met the market demand. CDFIs provide not only financing
but also development services to help prepare borrowers for success.
Since the creation of the CDFI Fund more than 25 years ago, CDFIs
have played an increasingly important role in opening access to capital
and economic opportunity in low-income communities and for low-income
people. At the end of 1997, there were 196 certified CDFIs, with total
assets of $4 billion. There are now more than 1,200 certified CDFIs,
operating in every State, with assets of over $220 billion. The
collective capacity of this field to deliver fair and responsible
financing is growing rapidly.
Before this year, the CDFI Fund had awarded nearly $4 billion to
CDFIs, community development organizations, and financial institutions
through its funding programs. The CDFI Fund has also allocated $61
billion in tax credits through the New Markets Tax Credit Program and
guaranteed $1.6 billion in bonds through the CDFI Bond Guarantee
Program. The CDFI Fund's investments are leveraged many times over.
Though the leverage ratio varies from program to program, and
recognizing that leverage ratios may vary in the future, one analysis
of past transaction level reporting found that on average CDFI Fund
investments attract at least $8 of private capital for every $1 of
Federal spending.\1\
---------------------------------------------------------------------------
\1\ CDFI Fund analysis of Awardee Transaction Level Reports, 2017
---------------------------------------------------------------------------
In fiscal year 2020, CDFI Program award recipients reported
originating more than 1 million loans, financing more than 41,000 units
of affordable housing, and funding more than 87,000 businesses--all in
distressed and underserved communities lacking access to traditional
lending or banking institutions. It is also worth noting that, over the
past year, CDFIs provided many small business owners and nonprofit
organizations with access to the Paycheck Protection Program.
status of funds from the consolidated appropriations act, 2021
The Consolidated Appropriations Act, 2021 made available historic
funding for CDFIs under three programs being implemented by Treasury:
--$1.25 billion in grants to CDFIs under the CDFI Rapid Response
Program (RRP), to respond immediately to the economic impact of
the pandemic;
--$1.75 billion in grants to CDFIs under the Minority Lending
Program; and
--$9 billion for Treasury investments under the Emergency Capital
Investment Program (ECIP), which is available to credit unions
and banking entities that are either CDFIs or Minority
Depository Institutions.
On June 15, 2021, the Vice President and Secretary Yellen announced
that the CDFI Fund was awarding $1.25 billion through the RRP to 863
CDFIs across the country. More than 70 percent of all certified CDFIs
submitted an application. RRP recipients included 58 organizations
receiving a total of $54.6 million that committed to direct their
awards to investments in Native American, Native Alaskan, and Native
Hawaiian communities, and 90 organizations designated as minority
depository institutions receiving a total of $133.9 million in awards.
The RRP awards will provide CDFIs with an unprecedented level of
flexible capital and will allow CDFIs to help businesses keep their
doors open, help families make ends meet, and help maintain important
community facilities as the country continues to grapple with and
recover from the economic crisis caused by the COVID-19 pandemic.
Under the Minority Lending Program, Treasury will provide $1.75
billion of grants to CDFIs to expand financial activity in distressed
minority communities and to minorities that have significant unmet
capital or financial services needs. The Minority Lending Program will
be rolled out later this year.
The ECIP will encourage low- and moderate-income community
financial institutions to augment their efforts to support small
businesses and consumers in their communities. Under the program,
Treasury will invest up to $9 billion of capital directly in depository
institutions that are CDFIs or minority depository institutions (MDIs)
to, among other things, provide loans, grants, and forbearance for
small businesses, minority-owned businesses, and consumers, especially
in low-income and underserved communities, that may be
disproportionately impacted by the economic effects of the COVID-19
pandemic. Treasury has conducted extensive outreach to the private
sector, including through meetings with CDFIs, minority depository
institutions, trade associations, community groups, and civil rights
groups. Treasury has also consulted extensively with the Federal
banking agencies regarding the terms of Treasury's investments under
this program. Based on this input and consultation, Treasury
anticipates releasing additional guidance for applicants in the near
future.
cdfi fund budget
The CDFI Fund currently offers programs to help CDFIs, Community
Development Entities, banks, credit unions, and community development
organizations generate economic opportunity by increasing access to
financial products and services in low-income communities. In fiscal
year 2022 the CDFI Fund requests $330 million broken down as follows:
--$215.4 million for the CDFI Fund's flagship program, the CDFI
Program, which spurs economic growth and increases access to
capital in low-income communities;
--$23.0 million for the Healthy Food Financing Initiative, which
supports investment in businesses that increase access to
healthy and affordable food in low-income communities;
--$21.5 million for the Native American CDFI Assistance Program,
targeting support to CDFIs primarily serving Native
communities;
--$26.0 million for the Bank Enterprise Award Program, which awards
FDIC-insured depository institutions that successfully
demonstrate an increase in investment in mission-driven lenders
or in their own lending, investing, or service activities in
distressed communities;
--$8.5 million for the Small Dollar Loan Program, which enables CDFIs
to provide consumers access to mainstream financial
institutions and combat high-cost small-dollar lending;
--$2.0 million for the AmeriCorps CDFI Economic Mobility Corps to
place national service members at certified CDFIs to strengthen
their capacity; and
--$33.6 million for administration of the CDFI Fund, which includes
support for the New Markets Tax Credit Program and the CDFI
Bond Guarantee Program.
The fiscal year 2022 budget request is approximately $60 million
above the fiscal year 2021 enacted budget, an increase of 22 percent.
The budget includes:
--$50.4 million increase for the CDFI Program (increase of 28.9
percent);
--$5 million increase for the Native American CDFI Assistance Program
(Increase of 30.3 percent); and
--$4.6 million increase for administration (increase of 15.9
percent).
The proposed increase in support for the CDFI Program can support
larger Financial Assistance awards to increase the loans and financial
products offered by CDFI Program award recipients, as well as
additional Technical Assistance awards for emerging CDFIs. Additional
support for the Native American CDFI Assistance Program can support
larger Financial Assistance awards and improving technical assistance
and capacity-building for Native CDFIs.
Additionally, we are requesting $500 million in commitment
authority and proposing legislation to expand the Capital Magnet Fund
as part of the American Jobs Plan.
conclusion
On behalf of everyone at Treasury and the CDFI Fund, I would like
to express our gratitude for the support of this subcommittee, and I
look forward to working with you.
Senator Van Hollen. Thank you for your testimony. You
probably heard the bells going off. So Senator Hyde-Smith is
going to go vote, and then return. And I will have to go vote
after that.
But let me now turn it over to Mr. Haskins. Thank you for
being here.
STATEMENT OF JOSEPH HASKINS, JR., CHAIRMAN AND CEO, THE
HARBOR BANK OF MARYLAND
[Clerk's Note: Materials were submitted for the hearing
record by the Harbor Bank of Maryland, and are in the
``Submitted Materials for the Hearing Record'' section at the
end of the hearing.]
Mr. Haskins. Thank you very much, Senator Van Hollen. I
just have to take a moment to acknowledge the Senator and his
commitment to our State of Maryland, and particular Baltimore
City, because he has actually made a visit to my institution,
and that is somewhat unusual. And to me I am deeply gratified,
and proud to say that you represent our community.
Also I would like to acknowledge Senator Hyde-Smith for her
role and participation in this panel, and to the other
representatives who are present. So I thank you again for the
opportunity to be able to present the role of Harbor Bankshares
Capital Corporation, the parent Harbor Bank of Maryland, before
this subcommittee, the Financial Services and General
Government Committee.
My name, again, is Joseph Haskins. And by way of
background, again, I am chairman, CEO, but because of my
commitment to the community very early on, and I am now in my
46th year of banking and financial services, having started at
what is now the JPMorgan Chase, I returned home to Baltimore to
help found a bank. So not only do I chair, but I am one of the
founding members of an institution that is now 39 years old.
So by way of history, Harbor Bank was founded with the
intent of addressing issues that we saw that reflected an
absence of access to capital by the minority community of
Baltimore City. So at the end of the late-1960s and the early-
1970s, there were members of the community that said: How can
we improve economic opportunities to those who have not had
ready access to capital, or had ready access to banking and
financial services.
And as a result of those questions, and having identified
that shortcoming, The Harbor Bank was founded. I am proud to
say that we opened the doors in 1982, and I am proud to say
that for the first 16 years of operation, the Bank was a
profitable organization. It wasn't until the great recession
that we experienced a real loss. And many of you know that
period.
But the founding of Harbor Bank was focused in three areas,
which we saw as vital to providing access to capital, banking
services, and economic opportunities. Those three areas we
identified involve small business lending, faith-based lending,
and residential mortgages. So today we have now grown to a bank
of $350 million in size, and as the $350 million bank, we have
been able to operate an offer great financial benefits and
services to the community.
In 1992 we formed a holding company because we found that
they were great needs--needs beyond what the Bank could
contribute. And as such, we formed three additional
subsidiaries.
And so what I would want this subcommittee to know is that
in our community, we have been instrumental in revitalizing
communities that were pretty much dormant, distressed,
forgotten, and overlooked. The Inner Harbor of Maryland was led
in terms of financing by Harbor Bank. The Canton community was
led by Harbor Bank with the development of housing, the
restoration of all abandoned warehouses, as well as creating
retail space for business enterprise.
A couple of significant projects that we worked on that we
saw that brought to the table all of the programs--is East
Baltimore's redevelopment of 88 acres. In that case, we were
able to bring BEA-related loans, we were able to bring advisory
service, we were able to bring lower cost funding, and we used
New Market Tax Credits to stimulate the development of a
science park. The first two science buildings done in that
Johns Hopkins, Science Park were done and initiated resulting
from the New Market Tax Credits that provided the incentive for
that development.
The New Markets Tax Credit Program, as we see it, is
critical in addition to the BEA Program, the FA Program, the TA
Program, because when you can bring all of those programs to
the table at once, you can revitalize the area. Resulting from
our efforts, we have created more than $3 billion of economic
development in the Baltimore community, which represents more
than 4,000 additional jobs as a success that is now a national
model.
So with this, I ask the subcommittee to strongly support
the request for additional financing, new subsidy of the CDFI
Program. And I thank you, Senator Van Hollen, and Senator Hyde-
Smith for allowing me the opportunity to speak to this critical
issue, and the critical needs in our respective communities.
[The statement follows:]
Prepared Statement of Joseph Haskins, Jr.
Chairman Van Hollen, Ranking Member Hyde-Smith, and Members of the
subcommittee, good afternoon. Thank you for inviting me to discuss the
important work of Community Development Financial Institutions (CDFIs).
My name is Joseph Haskins. I am a founding Director, Chairman and
CEO of Harbor Bankshares Corporation, headquartered in Baltimore,
Maryland.
bank history
The Harbor Bank of Maryland (Harbor Bank) opened its door for
business in September of 1982. The Bank had its origin dating back to
the early 1970s when Baltimore's African American leadership was
seeking ways to enhance economic opportunities for minority communities
in Baltimore City.
One of the major issues identified as limiting economic
opportunities was the lack of access to capital and more importantly
access to banking. To address these issues Harbor Bank was found.
Harbor Bank focused on providing banking services in the following
areas:
--Minority Business/Commercial Lending
--Faith Based (Church Financing)
--Residential Mortgages
Increased demands for financial services coupled with increasing
bank regulations required and expanded operations.
In 1992, Harbor Bank formed a holding company, Harbor Bankshares
Corporation (The Corporation), allowing for additional financial
services.
Establishing the holding company led to the formation of three (3)
subsidiaries and a non-profit Community Development Corporation (CDC).
Today, The Corporation oversees a $350 million Bank and
subsidiaries that directly and indirectly control another $300 million.
While the Bank remains the primary subsidiary, the other operations
provide the Baltimore community with access to more diverse capital and
financial services.
Some of the expanded services include:
--Lower priced loans
--Equity investment support
--Financial literacy programs
--Real estate development programs
--Specialized tax benefits
Over the past thirty-nine (39) years, the significance of the
Corporation and Bank to the development/revitalization of communities
is evidenced by:
--The development of the Inner Harbor East where Harbor Bank was the
first money to help build a hotel, office building, and
residential housing.
--The Canton Community where Harbor Bank was the first money to
support a residential housing project and the converting of old
warehouses to office and retailed space.
--East Baltimore Development Inc. (EBDI), a non-profit, was aided by
Harbor Bank's seed money to help an 88-acre community known for
poverty and crime to be revitalized and become livable. Johns
Hopkins Science Park is a part of this community's
revitalization. This community is now a national model.
--University of Maryland at Baltimore (UMAB) Science Park where
Harbor Bank was the first money to support land and project
development West of Martin Luther King Boulevard.
As a corporation in the financial services space, our role evolved
to that of being a catalyst and advocate for revitalizing and restoring
abandoned, forgotten, and disregarded communities in Baltimore.
the cdfi role
The Corporation and Bank seeking to enhance financial services and
bring more resources to the Baltimore Community applied over 20 years
ago to become certified Community Development Financial Institutions
(CDFI). Today, the Corporation and two of its subsidiaries are CDFIs.
Also, The Corporation's non-profit CDC is a certified CDFI.
Under the Department of Treasury's CDFI Program, the Corporation
and its subsidiaries have participated in several of funds programs and
have successfully won/earned:
--13 Bank Enterprise Awards (BEA) totaling $3,893,753 which helped to
increase lending in lower income communities. The BEA Award is
important to CDFI Banks because of its leverage capacity.
Records show that 90 percent of BEA monies go to the lowest
income census tracts.
--Financial Assistance (FA) award totaling $649,000. ($500,000 was
for loans and $149,000 persistent poverty).
--Nine rounds of New Market Tax Credit (NMTC) awards totaling $384
million helping to leverage over $3 billion of development and
create 4,000 jobs. Projects include science buildings,
community schools, and healthcare facilities.
Many projects involve multiple level of participation from The
Corporation. A project could include New Market Tax Credit (NMTC),
Harbor Bank loan and advisory services.
maryland profile
--The programs of the CDFI Fund are very important to the State of
Maryland. Maryland is home to 15 CDFIs, two of which are banks
or bank holding companies, while two additional CDFI banks
based in the District of Columbia provide significant services
within the State.
--In 2020, Maryland-based CDFIs and CDFI banks serving Maryland
(Maryland and D.C. based) received $6.7 million in CDFI
Financial Assistance (FA) and Technical Assistance (TA)
awards. CDFI banks serving Maryland received $202,898 in
BEA funds.
--In the past 3 years Maryland-based CDFIs and CDFI banks serving
Maryland have received $31.4 million in FA and TA awards,
while CDFI banks serving Maryland have received $1.15
million in BEA funds.
--Since the CDFI Fund's inception in 1996, Maryland-based CDFIs and
CDFI banks serving Maryland have received $119.5 million in
total awards. In that same period, CDFI banks serving
Maryland have received $14.5 million in BEA funds.
--Maryland is among the poorest states in the nation. Like other
states with persistent poverty, Maryland has a lot to lose if
the CDFI Fund and BEA Program do not have adequate funding.
--Approximately 9.1 percent of all Marylanders live in poverty--
with the poverty rate in 8 counties (Somerset, Baltimore,
Dorchester, Allegany, Wicomico, Garrett, Kent and
Washington) equal to or exceeding the 12.3 percent United
States total
--Baltimore City, Maryland's USDA designated persistent poverty
county, has a poverty rate 160 percent higher than the
United States total. Somerset County has a poverty rate 190
percent higher than the United States total.
covid-19 pandemic
The crisis of COVID-19 highlighted the importance of CDFI banks and
other community based financial institutions. CDFI banks reached and
helped the businesses that required loans to survive, the ones
disproportionately operating in low to moderate income communities and
desperate for banking services and in particular financial assistance.
The government offered stimulus programs--especially the Paycheck
Protection Program (PPP) proved to be a lifeline to many of these
businesses, especially in the distressed communities.
Harbor Bank stepped to the front of the line providing assistance
through the PPP program. Harbor Bank met and assisted over 1,000
potential PPP applicants and processed 674 applications totaling $67.5
million. Adjusting out the 10 largest borrowers, the average size of
Harbor's PPP loan was $52,000.
The government met the economic call from the community and Harbor
Bank was a part of the delivering channel.
In summary, the Treasury's CDFI Program is vital to the growth and
restoration of the communities that have been depressed or deprived for
years. It is difficult to provide the capital that these communities
need without a CDFI Program. My fear today is that the absence of the
PPP Program will render businesses incapable of continuing on the
survival path.
I urge the Members of the subcommittee to recognize the significant
economic benefits of funding the CDFI Fund programs. Not only do these
programs provide access to capital in historically disadvantaged
regions of the country, but they do so by leveraging private
investment. The CDFI Fund programs are a market-based strategy for
addressing chronic economic challenges.
I thank Chairman Van Hollen, Ranking Member Hyde-Smith, and the
Members of the subcommittee for the opportunity to tell you the story
of Harbor Bankshares Corporation, the work we do, and the communities
that we serve.
Senator Van Hollen. Thank you for your testimony, Mr.
Haskins. Next we will turn to Mr. Anderson.
STATEMENT OF ANDY ANDERSON, PRESIDENT AND CEO, BANK OF
ANGUILLA
[Clerk's Note: Materials were submitted for the hearing
record by the Bank of Anguilla, and are in the ``Submitted
Materials for the Hearing Record'' section at the end of the
hearing.]
Mr. Anderson. Good afternoon. My name is Andy Anderson. I
am the president and CEO of Bank of Anguilla, in Anguilla,
Mississippi. I am also chairman of the Mississippi Bankers
Association, and a board member for the Community Development
Bankers Association.
Mississippi is home to the largest concentration of CDFI
banks in the country. Thus the Treasury Department CDFI Fund is
extremely important to my bank and the communities we serve in
my entire State. I appreciate the opportunity to testify on
this topic today.
I thank the Members of this subcommittee for their long-
standing support of the CDFI Fund, and providing $270 million
last year in recognition of the important roles CDFIs play in
promoting economic opportunity in underserved communities. As
you consider your next appropriation, I strongly urge you to
increase overall support for the CDFI Program, and particularly
for the Bank Enterprise Award Program.
Bank of Anguilla has $171 million in total assets, and it
is the only financial institution in two persistent poverty
counties that are among the most economically distressed places
in the Nation. Established in 1904, helping our neighbors and
providing a pathway to financial stability is core to the
purpose of Bank of Anguilla.
Many people do not grasp all the challenges that rural
communities like the ones we serve face. Our community and our
counties have a combined population of only 5,648 people, of
which 33.6 live in poverty and 69 percent of the population is
minority. The medium household income is $24,208. There are no
traffic lights. There are no major retailers or national chain
restaurants in either county. There is no broadband Internet.
It is an hour drive to shop at a Walmart, or visit a
clothing store, or department store, which creates challenges
for many of our citizens that don't own a vehicle. New home
construction is nonexistent, and existing housing the quality
is often poor, as the cost of renovation often exceeds the
market value. Many of our neighbors struggle to make utility
payment, put food on the table, or buy school books or clothes
for children. CDFI banks, like Bank of Anguilla help these
struggling individuals to meet these challenges.
Fifty-one percent of the Bank's current loans are consumer
loans made to local residents. We have no minimum loan amount
and roughly 10 percent of our total current loans have an
original balance of $2,500. Like all CDFIs, at least 60 percent
of our lending and activities target LMI communities. With
solid underwriting practices, civic pride, and mission-driven
empathy, CDFI banks, like Bank of Anguilla, bridge the gap for
financially vulnerable customers.
Over the past decade, the CDFI fund has played a critical
role in Bank of Anguilla's ability to serve our communities and
remain a locally-owned institution. Since 2010 Bank of Anguilla
has received nine BEA awards totaling $1.7 million. BEA has the
strongest demand among the CDFI programs, and is far
oversubscribed compared to other programs.
In 2020, only $1 in BEA funding was available for every
$5.68 in request. Given the benefits generated by the BEA
Program, it is critical to increase funding. Since 2016, the
number of CDFI banks increased by 48 percent, yet, BEA funding
increase from only $18.2 million to $25.2 million. Through the
financial benefits of the BEA program, Bank of Anguilla is able
to make commercial loans to small minority businesses and
consumer loans to individuals that need financial help. Most
financial institutions would decline these requests.
We recently made two loans with the help of a local
agency's Minority Business Enterprise Loan Program to help a
minority owner purchase an established restaurant. We made
another loan to establish a minority-owned physical therapy
clinic. We also just financed the opening of a new minority-
owned restaurant. We support our local hospital and clinics,
where approximately 80 percent of the patients are minority,
and most of these poor. I could spend hours telling you the
small-dollar loans we have made, but this would take a whole
lot of time here.
Demand for all CDFI-funded programs far exceeds funding
available. I urge the Members of the subcommittee to recognize
the significant economic benefits of funding to CDFI Fund
programs. Not only do these programs provide access to credit
in historically disadvantaged regions of the country, like
mine, but they do so by leveraging private investment.
I urge this subcommittee to support the CDFI Fund Program,
by providing a robust budget for the CDFI Fund, and include an
extremely robust increase for the bank enterprise award
program.
I thank Chairman Van Hollen, Ranking Member Hyde-Smith, and
the Members of this subcommittee, for the opportunity to tell
you the story of Bank of Anguilla, the work we do in the
communities that we serve. And I look forward to answering your
questions.
Senator Van Hollen. Well, thank you very much for your
testimony, Mr. Anderson, and to all three of you. And I have a
question which really goes to all three.
I am going to start with Mr. Poyo, about the emergency
capital investment program, that was part of the December
legislation, and legislation after that, providing a $9 billion
investment into community development financial institutions,
and minority depository institutions. I understand that
applications are not due until July 6, but what has the
response been to date? And how do you anticipate dealing with
the demand?
Mr. Poyo. Thank you, Mr. Chairman. So the Emergency Capital
Investment Program has had a great deal of interest as you
might imagine from the day that it was passed. And we opened
the application round quickly, in March, and received a great
deal of feedback from those institutions that were--that are
potentially eligible applicants about how to structure the
program in a way that would most effectively achieve the goals
laid out by the statute and by Congress.
And so we have really listened to the banks and the credit
unions that are eligible applicants here, as well as engaged in
significant engagement with regulators, who are our partners in
administering any program, in carrying out a program with
regulated institutions. And so we are expecting strong demand
for the emergency Capital Investment Program, insignificant
part, because I believe that we have listened very carefully to
the institutions that are eligible for it, work closely with
regulators.
And, we will be, soon, releasing some additional updates,
that help you address many of the questions that we have seen
from the field. But I think listening to the field has really
put us in a strong position to see this program be effective.
Senator Hyde-Smith. Thank you very much. And we are going
to continue with questions, as Senator Van Hollen had to go
vote, Van Hollen had to go vote, and I just ran back.
So I will start with my questions. And this is for Mr.
Anderson. The Bank of Anguilla is headquartered in the South
Delta, Mississippi, one of the poorest regions in the country.
And I have received two statements on the impact that your bank
has had on the local area that I would like to enter into the
hearing record. But what would a funding increase to the BEA
Program mean for your community, there in Anguilla, and where
your branches are?
Mr. Anderson. Sure. As I said earlier, BEA is very
important to Bank of Anguilla, and an increased BEA award means
we could do so much more. We are only a $170 million bank in
assets, and we don't have access to capital markets, so grants
like this from the fund are really impactful for us. We have
received an award each of the last 10 years, which is great,
but the amount of the actual dollars we receive is trending
downward due to the increased demand in the program.
We are grateful to receive the award, but if we could just
get the amount bumped up, we could sure do a whole lot more in
our community. And BEA is important because it is not just a
one-time allocation. It is award that we have come to depend
on, and is a tool that helps us mitigate the risks that we
inherently have to absorb in serving predominantly LMI
customers.
Increasing this award could mean that in two of the poorest
counties in the Nation, borderline profitable small businesses
could remain open, potential small new businesses could be
started, and the lives of those in poverty in our area could be
better improved through the work of the Bank of Anguilla. The
BEA Program is helping to keep small, rural, impoverished
communities afloat, and that is a good thing.
Senator Hyde-Smith. Thank you. And your opening statement
touches on the difficulty many Americans face in just
understanding the true meaning of the words ``rural'' and
``poor'' in our country unless you have experienced regions
like in the Delta. Will you elaborate on this and the
communities you serve? And how has prior BEA funding benefited
them?
Mr. Anderson. Sure. One important point to state, that Bank
of Anguilla, like many community banks and CDFIs across the
country, we literally know most of our customers, our customers
are our neighbors, and neighbors help neighbors. They come into
our office and they laugh, they cry, they show pictures of
their family, and they look for us for guidance and help.
And banking is more than looking at a loan application to
see if it will fit into a box. Bankers are missing a blessing
if they haven't made a $500 loan to an elderly woman to visit
her dying sister, or made a $300 loan to an elderly lady for
clothes for a funeral, or made a $400 loan to a man over 100
years old that needed money for his utilities and to put food
on his table for Thanksgiving, or made a $1,000 loan to a
disabled woman to help pay for the funeral expenses of a
granddaughter that passed away in a fire.
And we might add that Bank of Anguilla employees made up
the difference for the expenses of that funeral. We later made
$5,000 loan to this same lady, so she could take in two
grandchildren. She had to have beds for them so human services
wouldn't take them away. All of these loans were made unsecured
to people that were poor. BEA funds not only help us to make
business loans that might not otherwise get made, but it helps
Bank of Anguilla, and other CDFIs who saw the risk of making
small loans to impoverished individuals who need help with the
basics of life.
Senator Hyde-Smith. Wow, tremendous testimony, tremendous
story, for real people.
And I am going to turn it over to Senator Coons. I think he
has a question. I recognize you.
Senator Coons. Thank you very much, Senator.
As someone who has long been interested in, and concerned
about CDFIs, and I am eager to see them play a more significant
role, I am so excited by this panel. I enjoyed reading your
testimony beforehand. If I might, forgive me--the questions I
had hoped to ask.
Mr. Haskins, The Harbor Bank of Maryland is a certified
CDFI that helps communities in Baltimore. What impact have you
seen the COVID-19 relief funding for small businesses and the
CDFI Fund have on your community? And forgive me, I wanted to
ask that question, of both witnesses, from CDFIs. Forgive me,
sir.
Mr. Haskins. Well, speaking to the Paycheck Protection
Program, I can tell you that we probably interviewed more than
1,000 different applicants. We ended up processing 674
applications for a total of roughly $67 million. If we tease
out the 30 largest borrowers, our average loan to the borrowers
was roughly about $52,000. We know that we kept businesses'
inability to operate and survive because we were there. And I
don't want to speak to some of my larger brothering, but I can
tell you that in our community, it was difficult for many of
them to access loans, especially when they were of a smaller
size.
When you looked at loans in, for half-million or in the
multi-million dollar size, we could process those loans in a
couple of hours. When we got to the $25- and $30,000 loans, we
were spending weeks getting those loans processed because you
had to walk individuals through the process. When you thought
you had clear understanding you didn't, you ended up actually
drawing up many of the documents so that they could apply.
The reason I mentioned that we talked to in excess of
1,000, because I engage all of our eligible staff to work in
the processing, because we had such requests and the demands
were so heavy, there was a third of those that we couldn't get
to. The reason I think it is important to know that, is because
those individuals are still struggling, and I will suggest to
you, many will not survive because they didn't get the lifeline
that the PPP Program extended for those businesses that were so
impacted by the pandemic itself.
And so I would just say to you that it is an extremely
important role. And I just want to mention, I know it was
raised about the BEA award, and I want you to know that, as my
colleague, Andy, pointed out with reference to Mississippi, in
Baltimore where we are 160 percent impoverished beyond what is
considered the national average, we find ourselves dealing with
many of the same issues in terms of meeting those needs.
Twenty years ago we applied and won CDFI certifications. I
have been successful in winning 13 BEA awards, which total
$3,893,000. Those dollars have gone back in to provide some
financial support for businesses, vital to communities that
have not readily received. Unfortunately, in many urban
communities, what we know and hear about as food deserts, have
become bank deserts. And so they are not easy and readily
access to financial resources. Harbor Bank has stepped in to
help bridge that gap and bring financial resources.
And the last comment I will make is that, Harbor, and in
our community, we are more than a bank, we are a catalyst for
economic development, and we are advocates for financial
resources. So when you talk about these funding sources, you
are talking about funds that we can point to specific projects
that are there because of us. We are so knowledgeable of the
community that we can go into communities that other financial
institutions will not look at, and invest our dollars to ignite
economic development. And we bring in the others.
Senator Coons. Thank you, Mr. Haskins.
Mr. Anderson, my experience in Delaware has been that we
have CDFIs that provide access to financial services, much as
Mr. Haskins was describing, in both the urban core of
Wilmington, Delaware, and in our most rural, lowest-income
corners of our State. I was intrigued by reading your testimony
about your experience in Anguilla, Mississippi.
If you just please tell me, briefly, if you could, as well,
about why you support the CDFI Fund. Why the BEA program is
particularly important, and how you think we can make the best
use of taxpayer money in deploying CDFIs as economic
development, access to credit, facilitators across our country
from both urban and rural communities?
Mr. Anderson. Sure. As I stated earlier, banks like Bank of
Anguilla in rural areas have very limited access to capital. We
just don't have it. Our capital grows by local investors and
the small amounts we make in profits. If we didn't have the BEA
designation, if there were--if there wasn't a designation such
as CDFIs, we would still make the loans that we are making now.
We would do it, but at much greater risk.
What the BEA Program allows us to do, is absorb some of
these risks and go even farther outside the box to help the
people in our communities, Sharkey. Issaquena counties, where
we operate, to have just a basic existence in life. So many of
us take for granted the daily necessities. There are people
across the country that don't have these basic necessities, and
they look to us to be able to build--to fund these. And they
looked to us for advice, as Mr. Haskins said.
The CDFI Program is important to banks like us. And it is
very important that that dollar amount continues to grow for
us, because too often banks get an image as the bad guys, but
we are there for our customers. Our bank, just like probably
most of the CDFIs across the country, we have a heart and soul.
We have a heart and soul for missions, and that is what we do.
Our employees, each one of my employees, I am so proud of them,
they have a heart for missions. They seek ways to help out
people.
And it all boils down to people, whether it is a business
loan or a consumer loan, it all boils down to people,
individuals, and family. And I stress a lot on the individual
level, the consumer level, but the BEA Fund and CDFI Program is
so important to economic development too.
Senator Coons. Well, thank you. Thank you both. I have
gotten to know CDFIs throughout my State, and I have been
really struck at the mission orientation, the willingness to
invest the time to do the hard work, to get to know your
customers, and to do banking, I would say the good old
fashioned way, meaning it is a lot of work, but it provides
people opportunity and access. Thank you. Thank you for your
testimony.
Mr. Anderson. Thank you.
Senator Van Hollen. Thank you, Senator Coons.
I have a few questions. But let me defer to Senator Hyde-
Smith, if you have some. Sorry, as you can see, we are in the
middle of voting, so that is why you see everybody being----
Senator Hyde-Smith. Oh, yes. I just have one more. Of
course Mississippi is home to more CDFI banks than any State in
the country. And why is that? And you know, that we have more,
and what benefits do these institutions bring to our State that
handle these?
Mr. Anderson. Mississippi, as so many people know, and it
is well-publicized, is one of the poorest States in the Nation.
CDFIs are mission-driven and are committed to serve in
economically distressed areas. And we have a lot that fit that
description of Mississippi. And we also have many community
banks CDFIs that are committed to providing economic
opportunity for everyone in their communities.
So there is a natural alignment between Mississippi
community banks that are committed to growing the economy in
rural underserved areas and the goals of the CDFI fund. This
alignment has benefited our State, and provided opportunities
for banks like mine to finance projects and to help the
underserved. We have a lot of communities around the State that
are struggling, particularly in my home of the Mississippi
Delta, and combining public dollars with private funds for
targeted impact, like the CDFI Fund does, is really an
important way to combat persistent poverty. There is a lot of
work to do, so the fund does a great job of helping all of us
to do that.
Senator Hyde-Smith. Thank you.
Senator Van Hollen. Thank you, Senator.
And to Mr. Haskins and Mr. Anderson; I had to leave after I
had asked Mr. Poyo the question about the new capital funds,
the emergency capital fund that was developed. Are either of
your two CDFIs applying for those funds?
Mr. Haskins. Senator, yes we are. And as I reported a
little bit earlier, and just to reiterate, we are fortunate in
that not only is the Bank CDFI certified, my holding company is
CDFI certified, and we have a second subsidiary that is CDFI
certified with a nonprofit that we have certified. So we intend
to apply for the max.
And one of the examples that I can give you, if I can real
quickly; to say, why it can get used for us, one of the
stimulus programs early on from last year, the Main Street
Program, while some institutions had trouble deploying it, in
the last quarter of 2020, we actually deploy $92 million in
funds. So I say that to say that there is no lack of
opportunity there.
And one other piece that I will give you, if those of you,
and I always invite people to visit Baltimore and the area,
north of Johns Hopkins hospital, because many of these
hospitals, and many of the universities in urban areas are
surrounded by low-income and highly distressed communities.
Well, 88 acres north of Johns Hopkins University was
revitalized because we were able to bring tax credits to the
table, Harbor Bank direct loans to table, we were able to bring
CDC, low-income loans to the table, and we provided advisory
service.
Well, there are several other projects that need funding
there, and so we believe that this is a real opportunity for us
to make major impact far beyond the communities that are
already identified, and so we will be applying for the full
amount, which will be $70-some million, in terms of our
institution.
Senator Van Hollen. Thank you.
Mr. Anderson.
Mr. Anderson. As I stated earlier, we have limited access
to capital in the markets we serve. So we will definitely be
applying for capital through the program. In fact, we will have
our application, and hope to finish by Friday, so we are moving
forward with that. We think this could be a game changer in our
area. We hope it will be. We believe we could invest in
technology to help deploy something like remote deposit
capture, which we don't have right now, and other mobile
technology that we think will help banking access across our
community.
When you look across our community, it seems that everybody
has a cell phone. And so we believe that this will help. ECIP
capital will also help us to grow our lending areas in some
nearby small communities that no longer have local bank
branches, these communities are bank deserts now, and we hope
to be able to lend to the people in those areas. So ultimately
we plan on using the ECIP capital to broaden the service and
lending products we are able to offer. And we anticipate that
this will continue to help us fight poverty in the Mississippi
Delta.
Senator Van Hollen. Thank you.
Mr. Poyo, we have been talking about the additional
emergency funds that were provided both in capital as well as
in the Rapid Response Program, but of course, you have got your
annual appropriation request. And as we said earlier when the
Secretary was here we appreciate that request. Some have asked,
you know, given the fact that we have just provided these large
amounts of funds to CDFIs, through the earlier legislation,
whether there is the capacity to absorb this additional
request. What is your response to that based on your current
experience, and your previous experience in this area?
Mr. Poyo. Yes. Thank you, Mr. Chairman. So as a former CDFI
CEO, as well as in my position now, it is my experience that
the CDFI field is something like parched earth, right. Can soak
up, still a lot of capital, a lot of that water in the
metaphor. And what we see is, you know, the Paycheck Protection
Program, which you were talking about earlier. There was a lot
of question about whether CDFIs would be able to play a really
robust role in the deployment of Paycheck Protection Program
dollars.
And indeed CDFIs outstripped, I think, anyone's
expectation. And so the constraint, the fundamental constraint
that I think the CDFI field faces is capital constraint. And so
when we talk about capacity, it is very difficult to hire
staff, or build your IT systems, or all of those things that
are--that are good for an institution's building capacity, if
it is not in the service of actually putting capital on the
street and meeting people's needs.
And so I believe the capital that we have seen, which is a
historic investment, and really appreciate that the Congress
did this, we expect to see that capital absorbed by the field,
and believe that the annual appropriation--that there is an
opportunity to grow the annual appropriation to match that
increase in capacity that we see in the field.
Senator Van Hollen. Thank you. And, you know, as you know,
that the Emergency Capital Investment Program, currently only
applies to ensure depository institutions, bank holding
companies, savings and loans, and federally insured credit
unions. You and I have discussed this in the past, but we have
heard from CDFI loan funds that they would also benefit from
the longer term capital infusions that would be provided under
this kind of program.
Question one: Is there a non-legislative fix to that issue?
And question two is: Do you believe that the CDFI loan funds
would also benefit from a capital infusion?
Mr. Poyo. So taking your first question first. We have
looked very closely at this question, and really, I think the
constraint is in the statute. I am not sure that there is any
way, and we have looked at it from a bunch of angles, to really
construe that loan funds could be eligible as the statute is
currently written.
That being said, loan funds receive significant benefit
from the Rapid Response Program, which of course was just
recently announced. And I do believe that loan funds can
continue to absorb capital. And so I am--really appreciate you,
sort of, focusing on and thinking through what are ways in
which dollars could be crafted to loan funds. But of course, we
have--we have both put the Rapid Response Program on the
street, and the Minority Lending Program will be coming later
this year, which will create opportunity for some loan funds.
Senator Van Hollen. Thank you. No, and I look forward to
working with you on that issue. And my final question goes to
both Mr. Haskins and Mr. Anderson, because it is great to have
you here, as really good, important examples of why the CDFI
funding is so important to get capital and money into
communities.
And two issues have come up, Mr. Haskins, you mentioned as
well, the New Market Tax Credits in one of your earlier
responses. And then there was also the discussion of the role
CDFIs played in the deployment of the PPP Program. I think we
all remember in the early days of the rollout of the PPP
Program, a lot of those funds were working there through large
financial institutions, but at the end of the day, it was the
smaller financial institutions and CDFIs that really helped
push that money out.
So let's start with you, Mr. Haskins. Can you talk about
the role you played in the deployment of the PPP funds, but
also some of the other things that you have been able to do
with New Market Tax Credits, and what important role they play
in putting together the pieces for some of these important
investments?
Mr. Haskins. Thank you again for allowing me to speak about
the PPP Program. What we found is that Harbor, because of our
role in the community, and a comfort level that many of these
businesses have with our institution, there was a greater
involvement that we were able to have than some of the other
institutions. And, as my colleague, Andy Anderson, has pointed
out, we are not just there in the community, we are there with
a real serious committed interest to the welfare of those
communities.
And so we reached out to those that had not reached out to
us to make sure that they were aware of the opportunity to
proceed, many kind of automatically believe that when something
is announced, they automatically know and understand how to
process, but many don't. And, and so we understand that about
our community. And so those who had not applied, we were able
to get to apply.
And we can point specifically to businesses that are vital
to the community, the stability of their communities that are
there. One sector that often people miss in many urban areas,
especially many areas that are older communities, is the role
that the churches, the faith-based organizations play in those
communities. Many of those organizations employ heavily out of
their respective communities.
And so we were able to get many of the faith-based
organizations to apply, and thereby keep employment and keep
services which were daycare centers, job training centers, food
preparation centers, et cetera, et cetera, we were able to keep
those functional because appropriate dollars were allocated
through the PPP Program for that purpose.
Switching over to New Market Tax Credits, because while it
is not a direct funding program, it is significant because it
focuses on low-income, distress communities, and it is
formulaic in terms of how it is applied. But so many of these
communities, both urban and rural have high distress community
areas based on the demographics, et cetera.
What we have been successful in winning is nine different
grounds totaling $384 million, but it is leveraged over $3
billion worth of development. And as a result of doing that
because of the way that the definitional requirements are,
employment is a part of it.
So one example, and I will say this, and be brief, one of
the last science buildings we did in East Baltimore is 1812
Ashland Avenue. Through our working relationship we were able
to get Starbucks to put a roaster, the only roast in Maryland,
one of the first roasters in the Delmarva area, in a low-income
community, and the folks employed in that roaster are from the
community.
So we created new jobs that were not identifiable with that
community. And so what we know and what we see is that through
these programs, we can help leverage greater opportunities for
economic revitalization and development. And that's just a
simple example of one.
Senator Van Hollen. Wow. That is a great example. And part
of the success, I think, of this program. Thank you, thank you
very much.
Mr. Anderson.
Mr. Anderson. Sure. Our local economy was hurt of course,
by the pandemic, just like everybody else. A few restaurants
that we have, their doors were closed for a certain amount of
time. And then when they reopened, they were reopened to
limited capacity. Churches and faith-based organizations are
very significant in our area in helping where there are needs.
Church offerings were significantly down, and any donations
made to these faith-based organizations were down.
Between the 2019 flood, we had an extensive flood in 2019
that lasted about 8 months, and the pandemic in 2020, our
community was really, really hurt. Given the limited number of
businesses we have, we were still able to make 218 PPP loans in
an area where there is just over 5,000 people, and limited
businesses, making these loans helped our county survive,
tremendously helped our county to survive.
If there is a business in our two counties, most likely we
financed that business. I can't think off the top of my head of
any business that is existing right now we didn't finance. And
businesses in small, rural counties have a hard time surviving,
but we are there for them. And the PPP Program helped our area,
and they all sought out Bank of Anguilla. And like Mr. Haskins
said, our average loan was about $23,000.
Most of our applicants had no idea how to fill these forms
out or what information was needed. So we spent, literally
spent hours on each loan, helping our customers out. And so
between the PPP loans that we made all through the pandemic
that has helped out so much, and with the money that we will
have coming in through the Rapid Response Program, and then
through--hopefully through ECIP that is going to be a game
changer for our communities.
ADDITIONAL COMMITTEE QUESTIONS
Senator Van Hollen. Well, let me thank all three of you.
Thank you for your testimony. Most of all, thank you for what
you are doing to help empower communities, and bring more
opportunity to more people in small businesses.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Questions Submitted to Hon. Janet L. Yellen
Questions Submitted by Senator Patrick Leahy
county funding under the american recovery plan act
Secretary Yellen, as we discussed during the hearing, the
Department of the Treasury has chosen to rely on a definition from the
Census Bureau to define what constitutes a county government. No such
definition was specified in the American Recovery Plan Act, and the
Treasury Department's arbitrary decision to apply it has led to an
unacceptable result in Vermont.
Question 1. The Vermont Congressional Delegation, as well as the
State of Vermont, have expressed disappointment in the Treasury
Department's response to these concerns. What steps is the Department
taking to work with the State of Vermont to ensure that Vermonters
receive the dollars provided under the ARPA, as directed by Congress?
Answer. On July 30, Treasury issued guidance on CLFRF funds
for counties that are not units of general local government
(non-UGLG). In this guidance, all of Vermont's 14 counties have
been classified as non-UGLG counties. As such, the funds
allocated to Vermont's counties will be made available to the
State of Vermont for payment to its units of general local
government within those counties.
Question 2. In your testimony, you indicated your intent to work
with us to find a resolution. It does not help the people of Vermont to
have the money Congress appropriated sitting in the Treasury here in
Washington. Please confirm that you have found a resolution so that the
funds can be allocated to the State, where the money can be used for
the purposes appropriated.
Answer. Yes, please see the guidance referenced in the
previous question.
affordable housing
Vermont has used significant portions of its State and Local Fiscal
Recovery Funds from the CARES Act and the American Rescue Plan Act to
support housing construction. The State hopes to ensure that Vermonters
can find affordable housing, including the more than 2,000 Vermonters
currently being sheltered in hotels to prevent homelessness. Vermont
has a strong history of building affordable housing in areas of
opportunity. However, recent Treasury guidance on eligible uses of
State and local relief money does not offer clear guidance for whether
this funding can be used to construct affordable housing in areas of
opportunity, leading to confusion among Vermont affordable housing
groups.
The guidance states that ``Treasury will presume that certain types
of services are eligible uses when provided in a Qualified Census Tract
(QCT), to families living in QCTs, or when these services are provided
by Tribal governments. Recipients may also provide these services to
other populations, households, or geographic areas disproportionately
impacted by the pandemic. In identifying these disproportionately-
impacted communities, recipients should be able to support their
determination for how the pandemic disproportionately impacted the
populations, households, or geographic areas to be served.'' I am
concerned by this guidance for a number of reasons.
Not explicitly allowing affordable housing construction,
acquisition or rehabilitation outside of low-income areas (QCTs) runs
counter to the public policy consensus and mandate to deconcentrate
poverty and create affordable homes in areas of opportunity. This
limitation threatens to further segregation and discrimination.
Question 3. Will you revise Treasury guidance to ensure that
spending State and Local Fiscal Recovery Funds does not undermine long-
standing housing best practices and policies regarding construction of
affordable housing in areas of opportunity?
Answer. The Treasury Department is deeply committed to
supporting the creation of and addressing affordable housing
needs under each of the programs it administers under the
American Rescue Plan Act. Treasury's Interim Final Rule for the
State and Local Fiscal Recovery Fund (SLFRF) encourages
recipients to prioritize services for low-income individuals
and families hard-hit by the pandemic, including those living
in Qualified Census Tracts (QCTs).
The Interim Final Rule explicitly allows affordable housing
development to increase the supply of affordable and high-
quality living units as an eligible service for SLFRF.
Recognizing the disproportionate impacts of the pandemic to
low-income communities, affordable housing is automatically
eligible when provided in a QCT, to families living in QCTs, or
when these services are provided by Tribal governments. In
addition, recipients may also provide these services to other
populations, households, or geographic areas that they identify
as disproportionately impacted by the pandemic. This provides a
simple and expeditious way for governments to invest in
disadvantaged communities, while giving them the flexibility to
also identify and serve other populations, households, or
geographic areas. For example, a relatively higher-income city
could determine that its low-income residents faced
disproportionate impacts and develop affordable housing
targeted to these households; this could include affordable
projects in higher-income neighborhoods near jobs and well-
resourced schools.
Treasury's comment public period for the Interim Final Rule
has just closed. As part of its review process, Treasury will
carefully consider public comments and consult with other
Federal agencies as relevant in order to support the
development of affordable housing in communities across the
country.
The data used to determine Qualified Census Tracts does not take
into account other measures of need used by other Federal or State
agencies, including areas identified in State and local housing plans,
Difficult Development Areas determined by the Department of Housing and
Urban Development (HUD) or Rural Economic Area Partnership Zones
determined by the U.S. Department of Agriculture (USDA).
Question 4. Will you commit to working with your counterparts at
other Federal agencies to ensure that areas of identified need beyond
Qualified Census Tracts can benefit from affordable housing investment
via State and Local Fiscal Recovery Funds?
Answer. The Interim Final Rule recognizes that the COVID-19
public health emergency disproportionately impacted certain
communities, including in QCTs. In addition, the Interim Final
Rule provides a framework for recipients to identify other
populations that were disproportionately impacted, including
considerations for identifying those populations. This approach
helps provide recipients with flexibility to respond to their
communities.
Treasury is carefully reviewing comments received on the
Interim Final Rule, including on other communities
disproportionately impacted.
Question 5. Will you commit to engaging on the ground stakeholders
to establish a simple process by which recipients of State and Local
Fiscal Recovery Funds can determine additional disproportionately
impacted areas and document these decisions for the Treasury?
Answer. The Interim Final Rule recognizes that the COVID-19
public health emergency disproportionately impacted certain
communities, including in QCTs. In addition, Interim Final Rule
provides a framework for recipients to identify other
populations that were disproportionately impacted, including
considerations for identifying those populations. This approach
helps provide recipients with flexibility to respond to their
communities.
Treasury is carefully reviewing comments received on the
Interim Final Rule, including on other communities
disproportionately impacted. It is well-documented that lower-
income households have been disproportionately impacted by the
COVID-19 pandemic, but as part of the Interim Final Rule
comment review process, Treasury will carefully consider public
comments and consult with other Federal agencies as relevant in
order to offer clarity on how a State can demonstrate this
disproportionate impact.
It is well-documented that lower-income households have been
disproportionately impacted by the COVID-19 pandemic, but current
Treasury guidance offers no clarity on how a State can demonstrate this
disproportionate impact. This creates ambiguity that will divert
administrative capacity and delay urgently-needed new housing.
Question 6. Will the department consider revising guidance to
provide clarity that housing affordable for households at or below 100
percent of the Area Median Income is an eligible use of State and Local
Fiscal Recovery Funds, if it is located in an area where the need for
housing has been shown?
Answer. The public comment period on Treasury's Interim Final
Rule recently closed on July 16. Treasury is carefully
reviewing comments received and will take public feedback into
account when developing the final rule.
The majority of homes in Vermont are owned rather than rented, but
Treasury guidance on the provision of affordable housing with State and
Local Relief Fund money makes no mention of providing support to help
struggling low and moderate income households become homeowners.
Question 7. Will you commit to revising Treasury guidance to
allowing State and Local Fiscal Recovery Funds to be spent on
homeownership for low- and moderate-income families, such as down
payment assistance and new construction of affordable homes for
ownership?
Answer. The public comment period on Treasury's Interim Final
Rule recently closed on July 16. Treasury is carefully
reviewing comments received and will take public feedback into
account when developing the final rule.
taxpayer services
For many Americans, especially those in rural States like Vermont,
the IRS is one of the main faces of the Federal Government where
communities have the ability to interact with the agency on a regular
basis. Countless taxpayers without Internet service rely on phone or
in-person IRS services to answer questions and resolve problems with
their returns. Before the pandemic, the IRS only answered 31 percent of
the phone calls it received and taxpayers who managed to get through
waited on hold for an average of 38 minutes.
With all the tremendous work the IRS is doing to provide
coronavirus relief and roll out the new child tax credit, along with
the 18 million or so unprocessed tax returns, taxpayers have even more
questions for the IRS. Unfortunately, the IRS has become nearly
impossible to reach, either by phone or in-person as the number of in-
person Taxpayer Assistance Centers continues to decline. The agency's
growing reliance on digital tools and virtual assistance centers is
only amplifying the digital inequalities across rural America.
Question 8. How will the Department ensure that the tax assistance
services provided by the IRS are accessible in rural America?
Answer. The President's Budget includes resources to improve
the experience of all taxpayers as they interact with the IRS,
making sure that customer service representatives stand ready
to answer the phones when they call with questions and that
they get access to the tax credits, refunds, and other benefits
that they are entitled to. This includes investing in Taxpayer
Assistance Centers across the country, including in rural areas
where their presence is vitally needed. In addition, as you
know, the President's budget proposals are estimated to
generate over $700 billion in additional tax revenue over the
course of the next decade, both through investing in
enforcement focused on high-income, partnership, and corporate
misreporting--but also through a meaningful investment in
taxpayer services, which impact voluntary compliance.
Question 9. How will the Department ensure that the tax assistance
services provided by the IRS remains accessible to all Americans, even
the 19 million Americans who lack sufficient access to affordable,
high-quality broadband, as the agency continues to virtualize its
services?
Answer. In order for the IRS to have the capacity to ensure
that tax assistance services are accessible to all Americans,
it needs resources to invest in the provision of these
essential services. That means updating outdated technological
infrastructure to ensure that the agency can communicate with
taxpayers in an efficient and timely manner--but it also means
investing in telephone customer service and at Taxpayer
Assistance Centers. The President's budget includes resources
to improve the experience of all taxpayers as they interact
with the IRS, making sure that customer service representatives
stand ready to answer the phones when they call with questions
and that they get access to the tax credits, refunds, and other
benefits that they are entitled to.
______
Questions Submitted by Senator Christopher A. Coons
1. Many smaller municipalities across the Nation, including Dover,
Delaware, participate in the CDBG program to improve the housing and
other aspects of life for residents. Many of these municipalities,
because they are of less than 50,000 population and are part of a
designated metropolitan area, were adversely impacted by the decision
to use the CDBG formula to allocate the American Rescue Act's funds. As
a result, the City of Dover received far less funding ($8.6 million v.
approximately $20 million) than it would have if the allocation was
population-based, as applied to Non-Metropolitan municipalities (Non
Entitlement Units).
Question 1a. What regulatory or statutory changes would be needed
for these municipalities to receive at least the same level of funding
that would have been received if the approach used for NEUs was
applied?
Answer. The American Rescue Plan Act defines, for purposes of
the Coronavirus Local Fiscal Recovery Fund (CLFRF),
metropolitan cities to include those that are currently
metropolitan cities under the Community Development Block Grant
(CDBG) program, as well as those cities that relinquish or
defer their status as a metropolitan city for purposes of the
CDBG program. This definition of a metropolitan city is
provided in statute. To arrive at the universe of eligible
metropolitan cities for CLFRF, Treasury consulted with the
Department of Housing and Urban Development, which administers
the CDBG program. The allocations to metropolitan cities are
based on a number of factors identified in the statute
implementing the CDBG program, including population. The
allocations to NEUs are based entirely on population numbers.
2. In the roll out of the $1,400 Economic Impact Payments (EIP),
thousands of households who were eligible for the payment did not
receive it. My casework staff have been told by IRS staff that the
agency is trying to pay these people over the course of this summer,
but if it is unsuccessful, taxpayers can claim the missing EIP on their
2021 tax returns, similar to what people had to do for missing EIPs on
their 2020 tax return.
Question 2a. What is the status of the IRS trying to pay eligible
taxpayers the Economic Impact Payments?
Answer. Shortly after enactment of the American Rescue Plan,
the Treasury Department, Bureau of the Fiscal Service, and the
IRS disbursed more than 90 million third-round Economic Impact
Payments, totaling more than $242 billion. As of July 21,
approximately 171 million payments have been disbursed to
eligible Americans, which represent a total amount of more than
$400 billion.
For example, during that week, approximately 1.3 million
payments were disbursed, which represented a total amount of
approximately $2.6 billion. These payments were disbursed to
eligible individuals for whom the IRS previously did not have
information to issue a third- round Economic Impact Payment but
who recently filed a tax return. This payment batch also
included additional ongoing supplemental payments for people
who earlier this year received initial third-round Economic
Impact Payments based on their 2019 tax returns, but who are
eligible for a new or larger payment based on their recently
processed 2020 tax returns. In the last six weeks, more than
900,000 of these ``plus-up'' payments have been disbursed, with
a value of more than $1.6 billion. In all, more than 9 million
of these supplemental payments have been disbursed this year,
worth approximately $18.5 billion.
The Treasury Department, Bureau of the Fiscal Service, and
the IRS will continue to disburse third-round Economic Impact
Payments on a weekly basis through December 2021. If eligible
individuals do not receive the full amount of third-round
Economic Impact Payment to which they are eligible, they can
receive the remaining amount by claiming a 2021 Recovery Rebate
Credit on their 2021 tax return.
The IRS has provided an online Non-Filer tool to allow
individuals who were not required to file (and have not filed)
a tax return for 2020 to file a simplified tax return.\1\ This
simplified tax return allows eligible individuals to register
for advance Child Tax Credit payments and a third-round
Economic Impact Payment, as well as claim the 2020 Recovery
Rebate Credit. Free tax return preparation also is available
for qualifying people.\2\
---------------------------------------------------------------------------
\1\ See Child Tax Credit Non-filer Sign-up Tool, available at
https://www.irs.gov/credits-deductions/child-tax-credit-non-filer-sign-
up-tool.
\2\ See Free Tax Return Preparation for Qualifying Taxpayers,
available at https://www.irs.gov/individuals/free-tax-return-
preparation-for-qualifying-taxpayers.
---------------------------------------------------------------------------
Individuals can check the Get My Payment tool on IRS.gov to
view the status of their payments.\3\ An extensive library of
information regarding the third round of Economic Impact
Payments also is available on IRS.gov.\4\
---------------------------------------------------------------------------
\3\ See Get My Payment, available at https://www.irs.gov/
coronavirus/get-my-payment.
\4\ See Coronavirus Tax Relief: Economic Impact Payments, available
at https://www.irs.gov/coronavirus/economic-impact-payments.
Question 2b. How is the IRS specifically helping people
---------------------------------------------------------------------------
experiencing homelessness get Economic Impact Payments?
Answer. Throughout 2021, the IRS has worked to help homeless
individuals receive all of the Economic Impact Payments to
which they are eligible by conducting a national public
outreach campaign and leveraging partnerships with
organizations that work with homeless communities. These
efforts have been applied to ensure that the individuals in
these communities receive their third-round Economic Impact
Payments, the 2020 Recovery Rebate Credit, the Earned Income
Tax Credit, and 2021 advance payments of the Child Tax Credit.
Similar to the first and second rounds of Economic Impact
Payments, the IRS has continued to undertake a sweeping
outreach and education campaign to help Americans understand
their eligibility for a third-round Economic Impact Payment and
ensure that those who normally do not have a tax return filing
obligation are aware of their eligibility. The IRS continues to
share information nationwide, reaching stakeholders inside and
outside of the tax community. In addition to providing
information materials to news media and on social media and
websites, this national public awareness campaign has included
IRS partnerships with a wide spectrum of community and
professional groups. Throughout this campaign, the IRS has
reached homeless organizations, food banks, and social service
groups, as well as national, State, and local organizations
(and associations to which these organizations belong).
The IRS continues to hold special weekend summer events to
help people who do not normally file taxes receive advance
Child Tax Credit payments and Economic Impact Payments. During
these events, with the help of a new Non-filer Sign-up Tool on
IRS.gov,\5\ volunteers, community stakeholders, and IRS
employees provide assistance to eligible families in
underserved communities.\6\ The new Non-filer Sign-up Tool is
an update of last year's IRS Non-filer Tool on IRS.gov, and
allows individuals to complete and file a simplified tax return
to register for advance Child Tax Credit payments and the
third-round Economic Impact Payment, as well as claim the 2020
Recovery Rebate Credit.
---------------------------------------------------------------------------
\5\ See Child Tax Credit Non-filer Sign-up Tool, available at
https://www.irs.gov/credits-deductions/child-tax-credit-non-filer-sign-
up-tool.
\6\ See https://www.irs.gov/newsroom/irs-holds-additional-weekend-
events-july-23-24-to-help-people-with-child-tax-credit-payments-and-
economic-impact-payments.
3. In May, the Department of the Treasury issued an interim final
rule to implement the Coronavirus State Fiscal Recovery Fund and the
Coronavirus Local Fiscal Recovery Fund established under the American
Rescue Plan Act (ARPA). I've heard concerns from housing advocates in
Delaware that State, county, and local governments are hesitant to
---------------------------------------------------------------------------
utilize ARPA funds for the construction of affordable housing.
Question 3a. From page 35-36 of the interim final rule, how can a
government define and demonstrate ``disproportionate impact'' for the
eligible service of ``Affordable housing development to increase supply
of affordable and high-quality living units?''
Answer. The Interim Final Rule explicitly allows affordable
housing development to increase the supply of affordable and
high-quality living units as an eligible service for SLFRF.
Recognizing the disproportionate impacts of the pandemic to
low-income communities, affordable housing is automatically
eligible when provided in a QCT, to families living in QCTs, or
when these services are provided by Tribal governments.
However, recipients may also provide these services to other
populations, households, or geographic areas that they identify
as disproportionately impacted by the pandemic.
This provides a simple and expeditious way for governments to
invest in disadvantaged communities, while giving them the
flexibility to also identify and serve other populations,
households, or geographic areas. Treasury's comment public
period for the Interim Final Rule has just closed. As part of
its review process, Treasury will carefully consider public
comments and consult with other Federal agencies as relevant in
order to support the development of affordable housing in
communities across the country.
Question Submitted to Noel Andres Poyo, Deputy Assistant Secretary for
Community and Economic Development, Department of the Treasury
4. I appreciate the fiscal year 2022 budget request increases
funding for the CDFI Fund and requests $2 million to continue funding
the Economic Mobility Corps program that I helped create. This new
program in partnership with the Corporation for National and Community
Service (CNCS) is meant to increase the talent and human capacity at
CDFIs and help cultivate the next generation of community development
workforce leaders.
Question 4a. When will the first awards be announced?
Answer. On August 11th, the CDFI Fund and AmeriCorps
announced $2.5 million in awards for three CDFIs through the
inaugural round of the AmeriCorps CDFI Economic Mobility Corps
(EMC) Program.
Question 4b. What impact do think the program will have on the CDFI
industry?
Answer. Economic Mobility Corps provides an opportunity to
train the next generation of community development finance
professionals. It offers a hands-on experience by offering
national service members the chance to work in a Community
Development Financial Institution to provide substantive
financial counseling, planning and literacy activities in
distressed and underserved communities across the Nation. The
communities served by EMC members will benefit from the
increased capacity of CDFIs receiving EMC funding to provide
critical financial services. As the community and economic
development fields grows in scale to meet the challenge of
producing greater and more equitable growth in our economy,
there will be a need to scale programs like EMC to build a
pipeline of qualified professionals.
Question 4c. What recommendations do you have to Congress to
improve or expand the program?
Answer. Currently, the EMC program is funded as a set-aside
in the CDFI Fund's appropriations. Treasury recommends
consultation with AmeriCorps on opportunities to expand or
improve the program.
______
Questions Submitted to Hon. Janet L. Yellen
Questions Submitted by Senator John Boozman
1. The Federal Insurance Office (FIO) recently issued a request for
information (RFI) for a study on the affordability and availability of
auto insurance. The RFI notes that the office is undertaking a
``holistic analysis'' of ``disparities in premium pricing'' and ``the
impact of non-driving underwriting factors.''
The auto insurance industry is both one of the most highly
competitive and closely regulated industries in the country. State
insurance commissioners are already empowered to monitor their markets
for unfair pricing or discrimination. The last thing I would want to
see is the excellent work of Arkansas Insurance Commissioner McClain
being second-guessed by the Treasury Department applying standards,
analyses, or methodologies which are wholly unsuited in an insurance
context.
Question. Is it Treasury's intention to apply a disparate impact
standard in its analysis of auto insurance pricing? What kind of
methodology will FIO apply to analyzing data and information submitted
for the RFI? What is the ultimate objective of the RFI?
Answer. The Federal Insurance Office (FIO) is authorized
under the Dodd-Frank Act to, among other things, monitor the
extent to which traditionally underserved communities and
consumers, minorities, and low-and moderate income persons have
access to affordable insurance products. The U.S. personal auto
insurance sector is a significant part of the U.S. economy,
both in terms of its aggregate size and its impact on
individual consumers and their economic well-being. FIO plans
to undertake a holistic analysis of the personal auto insurance
business, focusing on: (1) affordability of coverage and
disparities in premium pricing, with particular attention to
traditionally-underserved communities and the impact of non-
driving factors; and (2) market evolution and structural shifts
in the conduct of the business, including the effects of
technology and the use of big data, as well as changes related
to the COVID-19 pandemic. As the next part of its work on auto
insurance, FIO will be reviewing the comments received in
response to the request for information. FIO looks forward to
engaging with interested stakeholders, including your office,
on its work relating to personal auto insurance.
2. The President's budget request includes a proposal to require
financial institutions to report data on all inflows and outflows over
just $600, a significantly lower reporting threshold than the current
$10,000, and would apply to all deposit, loan, and investment accounts.
I have two concerns. First, this presents serious privacy issues
for taxpayers. The IRS had a high-profile leak just last month, and
this would collect the financial information of most Americans. Asking
the IRS to secure that much data is a huge job for the Federal
Government.
I'm also concerned that Treasury would have ``broad authority'' to
issue implementing regulations. This proposal would impose additional
costs and complexities on some of our smallest banks, which serve as
the backbone to our small business community. That burden, coupled with
broad flexibility for Treasury and the IRS to design new reporting
requirements, creates the potential for regulatory overreach.
Question. Are Treasury and the IRS equipped to securely handle that
much data? And if this proposal becomes law, can you commit to both
considering existing reporting requirements before issuing regulations
and ensuring that Treasury won't place onerous, duplicative burdens on
financial institutions?
Answer. The Administration has designed this regime with
taxpayer privacy concerns front of mind. That is why, as
opposed to other compliance proposals that have been advocated
by outside actors, in the Administration's framework,
information is flowing only one way--from financial
institutions to the IRS, as is the case with existing
information reporting. The proposal also includes significant
resources to protect taxpayer information more broadly, giving
the IRS the resources it needs to invest in overhauling
antiquated technology and meet threats to the security of the
tax system, like the 1.4 billion cyberattacks the IRS
experiences annually. In designing this proposal, Treasury
spent a lot of time with small financial institutions to think
about minimizing burdens associated with a new regime, and we
are continuing to work with them to create a simple,
implementable regime.
3. Last year, Congress passed a bipartisan appropriations bill that
created a $25 billion Emergency Rental Assistance program. Earlier this
year, the partisan American Rescue Plan created a second round of $21
billion in rental assistance, and unfortunately changed the parameters
and safeguards for how the funding can be used. In total, that's
roughly $46 billion in rental assistance.
What concerns me is that I've heard from constituents and
colleagues that Treasury hasn't been able to provide detail about how
and where that money is being spent and that, as a result, States are
having difficulties setting up the program.
Question. Can you commit to working with Congress to address any
potential mismanagement of the emergency rental assistance program, and
any other potential areas of mismanagement around Treasury-administered
programs?
Answer. Treasury is committed to working with Congress and
oversight entities to ensure the integrity and effectiveness of
the Emergency Rental Assistance Program, as is the case with
all programs that the Department administers. Treasury has
rapidly distributed appropriated funding to States,
Territories, Local governments and Tribes, consistent with the
statute. Treasury has also taken swift action to develop
program rules that provide grantees with the flexibility that
they need to meet the pressing need for rental assistance in
their communities, while protecting program integrity. Treasury
has been transparent, publishing data about program performance
on a monthly basis. We encourage reporting any specific and
credible reports of fraud, waste and abuse to the Treasury
Office of the Inspector General.
______
Questions Submitted by Senator John Kennedy
savings bonds
1. As of April 30, 2021, approximately 80 million savings bonds,
totaling $29 billion, have matured but have not been redeemed.
Question. How many bonds are totally unrecoverable, damaged, or
lost?
Answer. Bond owners, not Treasury, have possession and would
know the condition of unredeemed paper savings bonds. Treasury
has a process in place that allows bond owners to claim lost or
destroyed bonds, including bonds destroyed in natural disasters
or other circumstances. Last year, for example, Treasury
processed 5,600 claims worth over $50 million. On average,
Treasury processes approximately 6,900 claims worth $59 million
per year. During the claims examination process, Treasury
confirms rightful owners to the bonds. Bond owners can use
TreasuryHunt.gov to search for information about savings bonds
that may have been lost or damaged.
sanctions
2. In May 2021, the Biden Administration waived mandatory new
sanctions on Nord Stream II AG, its chief executive officer, and
corporate officers; Nord Stream II AG is a Swiss-based company that
Russia's State-owned Gazprom established to construct and operate the
pipeline.
Question. What steps are you taking to ensure that unraveling of
these sanctions will not undermine the European energy independence?
Answer. The Department of the Treasury is committed to
countering Russia's use of energy as a weapon to achieve
aggressive political ends.
On May 21, 2021, Treasury implemented sanctions imposed by
the Department of State pursuant to the Protecting Europe's
Energy Security Act of 2019, as amended (PEESA), by including
additional Nord Stream 2-related entities and vessels on Office
of Foreign Assets Control (OFAC) sanctions lists.
In addition to implementing State Department sanctions
pertaining to Nord Stream 2, Treasury has worked with the State
Department to engage directly with governments and entities
involved with the Nord Stream 2 pipeline to explain the
sanctions risks pursuant to multiple U.S. sanctions
authorities.
Treasury is supporting the Administration's efforts to obtain
commitments from allies to strengthen European energy security
and the security of Ukraine and Central and Eastern Europe. In
the July 21, 2021 Joint Statement of the United States and
Germany on Support for Ukraine, European Energy Security, and
our Climate Goals, for example, Germany committed to utilizing
all available leverage to facilitate an extension of up to 10
years to Ukraine's gas transit agreement with Russia; committed
to taking action and pressing for effective measures at the
European level, including sanctions, should Russia attempt to
use energy as a weapon or commit further aggressive acts
against Ukraine; committed to establishing and administering a
Green Fund for Ukraine to support Ukraine's energy transition,
energy efficiency, and energy security; committed to expand its
engagement with the Three Seas Initiative to strengthen energy
security in Central and Eastern Europe; and underscored its
support for the European Union's Third Energy Package of
diversity and security of supply.
Treasury is also engaged with the Government of Ukraine to
implement long outstanding anti-corruption and good governance
reforms for the long-term viability and efficiency of Ukraine's
energy sector, and to reduce Russia's ability to manipulate the
country's energy infrastructure for political gain.
More broadly, Treasury takes seriously the range of Russia's
harmful foreign activities and has developed a tailored
approach that leverages all of our tools and authorities to
impose costs upon those acting on or behalf of the Kremlin
against U.S. interests while mitigating the potential
unintended economic consequences on partners and allies. Under
the Biden Administration, Treasury has taken significant action
to counter Russian malign influence, including by taking action
under Russia-related Executive Order (E.O. 14024), which was
signed by President Biden on April 15, 2021, to sanction
several technology firms supporting Russian intelligence
services and to impose new prohibitions on Russian sovereign
debt.
3. Recent reports indicate the Biden Administration is reevaluating
how the U.S. imposes sanctions.
Question a. Will you commit to working with Congress on these
changes?
Answer. As I discussed during my confirmation hearing, I've
asked Deputy Secretary Adeyemo to lead a review of our use of
economic and financial sanctions. This Treasury-led review is
focused on identifying successes, opportunities for change or
improvements, and steps for implementation, so that our use of
sanctions remains relevant, rigorous, and fit to purpose,
effectively advancing the national security, foreign policy,
and economic aims of the United States. Congress is an
important part of this process. Our team has and will continue
to engage with Congress as we carry out the review.
Treasury looks forward to continuing to work with Congress on
the use of the sanctions tool.
Question b. What steps are you taking to ensure these changes do
not undermine U.S. national security?
Answer. Economic and financial sanctions are an important
tool to advance U.S. national security, foreign policy, and
economic objectives. Treasury is committed to working
intensively to use sanctions to advance an array of strategic
priorities, from pushing back on Russian threats, to addressing
challenges from China, to combatting terrorist threats and
human rights abusers.
The sanctions review that Treasury is undertaking is not
focused on individual sanctions programs or individual
designations, and the determination to apply sanctions to a
particular national security, foreign policy, or economic
challenge should be made in the context of a broader U.S.
strategy to address that threat.
SUBCOMMITEE RECESS
So with that, this hearing is adjourned.
[Whereupon, at 3:56 p.m., Wednesday, June 23, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]
SUBMITTED MATERIALS FOR THE HEARING RECORD
----------
BANK OF ANGUILLA
ROLLING FORK, MISSISSIPPI
Bank of Anguilla Awards
------------------------------------------------------------------------
Awardee City State Year Program Amount
------------------------------------------------------------------------
Bank of Anguilla............ Anguil MS 2021 RRP $1,826,265
la
Bank of Anguilla............ Anguil MS 2020 BEA 202,898
la
Bank of Anguilla............ Anguil MS 2019 BEA 245,547
la
Bank of Anguilla............ Anguil MS 2018 BEA 233,244
la
Bank of Anguilla............ Anguil MS 2017 BEA 75,564
la
Bank of Anguilla............ Anguil MS 2016 BEA 227,282
la
Bank of Anguilla............ Anguil MS 2015 BEA 265,496
la
Bank of Anguilla............ Anguil MS 2014 BEA 355,000
la
Bank of Anguilla............ Anguil MS 2013 BEA 90,000
la
Bank of Anguilla............ Anguil MS 1999 BEA 3,750
la
------------------------------------------------------------------------
Letter From Tracy Harden
Our hometown bank, Bank of Anguilla, means to me stability, action,
care, and love. I've seen them back our whole community during some
difficult years. It is always a comfort to know that you can go to
anybody at the bank for help, but especially being able to call your
president of you bank and watch him work things out for you. We've
struggled through a couple of hard years, not just me, but the whole
community. All of us, the rich and the poor, have struggled. We've had
it rough but there has never been a time we could not call on our bank
to help us. Other business owners and I, didn't know how we would fare
after all of this flooding, nor how we would come back from it all.
After the devastating flooding, corona hit us. We started hearing about
the PPP loans and the potential benefit to business owners. All it took
was a quick call to the bank and they worked the loans all out for us.
Not only did they make sure we had the loans to keep our employees
working but the bank as a whole would go out of its way to support our
business. They did this by feeding their staff lunch from my restaurant
or buying lunch in town for people in town who were having it rough.
Minorities were hit especially hard being that a lot of them worked
with the farmers and once the farmers couldn't plant, they weren't able
pay their employees. Bank of Anguilla stepped in and provided small
loans until they could get on their feet again. All of that just means
the world to us. We love our little town and community. Without our
bank, I just don't know where we would be.
Regards,
Tracy Harden
HARBOR BANK OF MARYLAND
BALTIMORE, MARYLAND
Harbor Bank and Affiliates Awards
----------------------------------------------------------------------------------------------------------------
Awardee City State Year Program Amount
----------------------------------------------------------------------------------------------------------------
Harbor Bank of Maryland Community Baltimore MD 2021 RRP $526,000
Development Corporation.
Harbor Bank of Maryland............ Baltimore MD 2021 RRP 1,826,265
Harbor Bank of Maryland............ Baltimore MD 2019 CDFI-FA 649,000
Harbor Bank of Maryland Community Baltimore MD 2019 CDFI-TA 125,000
Development Corporation.
Harbor Bankshares Corporation...... Baltimore MD 2019 NMTC 50,000,000
Harbor Bank of Maryland............ Baltimore MD 2018 BEA 96,300
Harbor Bankshares Corporation...... Baltimore MD 2018 NMTC 35,000,000
Harbor Bankshares Corporation...... Baltimore MD 2017 NMTC 55,000,000
Harbor Bank of Maryland............ Baltimore MD 2017 BEA 233,389
Harbor Bankshares Corporation...... Baltimore MD 2016 NMTC 70,000,000
Harbor Bank of Maryland............ Baltimore MD 2016 BEA 112,489
Harbor Bank of Maryland............ Baltimore MD 2015 BEA 90,771
Harbor Bank of Maryland............ Baltimore MD 2014 BEA 355,000
Harbor Bankshares Corporation...... Baltimore MD 2013 NMTC 33,000,000
Harbor Bank of Maryland............ Baltimore MD 2013 BEA 323,000
Harbor Bank of Maryland............ Baltimore MD 2012 BEA 415,000
Harbor Bank of Maryland............ Baltimore MD 2011 BEA 500,000
Harbor Bankshares Corporation...... Baltimore MD 2010 NMTC 21,000,000
Harbor Bank of Maryland............ Baltimore MD 2010 BEA 517,243
Harbor Bankshares Corporation...... Baltimore MD 2009 NMTC 20,000,000
Harbor Bankshares Corporation...... Baltimore MD 2008 NMTC 50,000,000
Harbor Bankshares Corporation...... Baltimore MD 2003 NMTC 50,000,000
Harbor Bank of Maryland............ Baltimore MD 2003 BEA 663,818
Harbor Bank of Maryland............ Baltimore MD 2002 BEA 231,000
Harbor Bank of Maryland............ Baltimore MD 2001 BEA 229,053
Harbor Bank of Maryland............ Baltimore MD 2000 BEA 126,690
----------------------------------------------------------------------------------------------------------------
.................... ........... ....... ................. $391,020,018
----------------------------------------------------------------------------------------------------------------
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