[Congressional Record Volume 141, Number 124 (Friday, July 28, 1995)]
[Extensions of Remarks]
[Pages E1544-E1545]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


FUNDING FOR THE COMMUNITY DEVELOPMENT AND REGULATORY IMPROVEMENT ACT OF 
                                  1994

                                 ______


                          HON. BILL RICHARDSON

                             of new mexico

                    in the house of representatives

                          Friday, July 28, 1995
  Mr. RICHARDSON. Mr. Speaker, it is of great concern to me and other 
colleagues of 

[[Page E 1545]]
mine who represent poor, rural, or undeveloped communities that, H.R. 
2099, the fiscal year 1996 VA, HUD appropriation bill contains zero 
funding for the community development financial institutions fund. The 
CDFI fund was established after President Clinton signed into law the 
Community Development Banking and Regulatory Improvement Act of 1994--
Public Law 103-325. The Congress enacted this landmark, bipartisan 
initiative by unanimous vote in the Senate and a lopsided 410-to-12 
vote in the House last year. The CDFI fund is designed to combine 
innovative approaches to community lending, advocated by both 
Democratic and Republican Members of Congress, into a comprehensive 
strategy to empower local communities and increase their access to 
credit and investment capital. No other Federal program provides the 
capital support that is so critically needed to increase the leverage 
and capacity of community development financial institutions, or to 
provide incentives for traditional banks and thrifts to enhance 
community lending and investment activities.
  Yet, the House Appropriations Committee recommends eliminating fiscal 
year 1996 funding for the CDFI fund. That recommendation is 
particularly appalling after the Congress and the Clinton 
administration worked out a compromise on the fiscal year 1995 
rescission package that provides $50 million for the CDFI fund and 
consolidates the fund into the Treasury Department to streamline and 
reduce administrative costs of the program.
  It is incredible to me that partisan politics reemerges suddenly to 
eliminate fiscal year 1996 funding for what is really a Republican-type 
initiative--a program with limited Federal funding that leverages 
private funds to galvanize self-help efforts at community and economic 
development.
  What is particularly sad to me is that, by eliminating funding for 
the CDFI fund, the House would dash the hopes of hundreds of native 
American communities across the country which looked to the CDFI fund 
as a way to stimulate public and private investment in native American 
communities for the first time ever. The CDFI fund is the underpinnings 
for another landmark and very innovative proposal which I introduced 
last year as H.R. 5277, the Native American Financial Services 
Organization Act of 1994. What we call the NAFSO proposal emanated from 
recommendations for the congressionally chartered Commission on 
American Indian, Alaska Native, and Native Hawaiian Housing to create a 
national native American financing organization to address the urgent 
housing and infrastructure needs of native communities across the 
community. Through a broad-based national and tribal effort, the 
proposal evolved into a broader plan addressing housing, infrastructure 
and economic development needs in native communities.
  The NAFSO proposal is a two-tier approach designed to dovetail into 
the CDFI fund. At the national level, the NAFSO would serve primarily 
as a technical assistance provider and conduit for CDFI fund assistance 
to a second tier of primary lender institutions called Native American 
Financial Institutions, NAFI's. With the infusion of Federal funding 
through the CDFI fund, NAFI's could develop in native communities 
around the country to make loans for home mortgages, infrastructure 
construction and/or improvements, small business development, and 
consumer loans. A NAFI would simply be a native American community 
development financial institution which first; demonstrates a special 
interest and expertise in serving the primary development and mortgage 
lending needs of the native American community it serves; and second; 
demonstrates it has the endorsement of that native American community. 
As long as the NAFI has that specific focus, it may be any type of 
financial institution, including a community bank, a savings bank, a 
mortgage company, or a credit union.
  Without any funding for the CDFI fund for fiscal year 1996, native 
American financial institutions cannot receive infusion of Federal 
funding to be matched dollar for dollar by local funds raised by the 
NAFI. Native American communities desperately need this type of 
Federal-local partnership effort to generate capital in their 
communities for housing, infrastructure, and economic development 
purposes.
  Native American people endure substandard conditions unmatched by any 
other population group in the United States: 56 percent of native 
families live in substandard housing, compared to the national average 
of 3 percent for non-native families; 28 percent of native households 
are overcrowded or lack plumbing or kitchen facilities, compared to the 
average of all U.S. households which is 5.4 percent; 51.4 percent of 
native Americans on reservations, trust land, or allotted lands own 
their own home without a mortgage.
  The unemployment rate for native Americans generally is 14 percent 
versus the national average of 6 percent, and in many remote 
reservations, the unemployment rate is double or triple those rates; 31 
percent of native Americans live below the poverty level as opposed to 
the national poverty rate of about 13 percent. A staggering 51 percent 
of native Americans living on reservations have incomes below the 
poverty level.
  Only a handful of financial institutions are native-owned, and very 
few non-native lenders invest in native communities.
  It is my fervent hope that the Senate Appropriations Committee will 
act more wisely and appropriate urgently needed dollars to the CDFI 
fund for fiscal year 1996. Even with a limited Federal financial 
contribution to the fund, so many more investment dollars will be 
generated to help communities across the country, particularly native 
communities that currently have little or no access to financing for 
housing, infrastructure or economic development activities. The Senate 
should make a healthy deposit into the CDFI fund for fiscal year 1996 
and I will work to persuade the House Appropriators to accept such a 
Senate recommendation in conference.


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