[Congressional Record Volume 145, Number 110 (Friday, July 30, 1999)]
[Senate]
[Pages S9946-S9947]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CONRAD:
  S. 1469. A bill to amend the Community Development Banking and 
Financial Institutions Act of 1994 with respect to population out-
migration levels in rural areas; to the Committee on Banking, Housing, 
and Urban Affairs.


     community development financial institutions (CDFI) technical 
                            corrections act

  Mr. CONRAD. Mr. President, I rise today to introduce the Community 
Development Financial Institutions Fund Technical Corrections Act.
  This legislation will make the CDFI program more responsive to low-
population rural areas. It will allow the program to fulfill its 
mission of building the capacity of financial institutions in parts of 
the country that have experienced chronic, sustained out-migration in 
recent years.
  As many of my colleagues know, the CDFI Fund was established by the 
Riegle Community Development and Regulatory Improvement Act of 1994. 
This program is intended to stimulate the creation and expansion of 
diverse community development financial institutions. The fund invests 
federal resources in--and builds the capacity of--private, for-profit 
and nonprofit financial institutions, leveraging private capital and 
private-sector talent and creativity. The fund invests in CDFI's using 
flexible tools such as equity investments, loans, grants, and deposits, 
depending upon market and institutional needs.
  The Core Component is the CDFI Fund's main program. In order to be 
certified for funding, an entity must demonstrate that it has a primary 
mission of promoting community development, principally serves an 
underserved investment area or targeted population, makes loan or 
development investments as its predominant business activity, provides 
development services, maintains accountability to its target market, 
and is a non-government entity.
  In order for a geographical area to be eligible for investment, one 
of a number of objectively-defined economic distress criteria must be 
met.
  The problem, Mr. President, is that the objective measures of 
economic distress as currently defined by the CDFI Fund do not fully 
reflect economic distress in low-population areas. Allow me to share 
just a couple examples with my colleagues.
  First, significant parts of low-population rural states like North 
Dakota have historically low unemployment rates and therefore cannot 
qualify on that basis. In many rural areas unemployment remains 
statistically nearly non-existent despite--and in fact because of--a 
lack of non-agricultural jobs. In rural North Dakota, the unemployed 
have little choice but to leave for urban areas.
  The result is unemployment rates as low as two or three percent in 
rural parts of my state and the misleading

[[Page S9947]]

impression of a strong economy. It is also worth noting that such rural 
areas often suffer from high underemployment, rather than high 
unemployment.
  Additionally, the CDFI Fund program considers an area economically 
distressed if median family income is at or below 80 percent of the 
national average, or if the percentage of the population living in 
poverty is at least 20 percent. Here again, Mr. President, these 
criteria do not accurately capture the level of economic distress in 
low-population rural areas. Prolonged out-migration in many rural areas 
due to the loss of family farms and a shortage of non-agricultural jobs 
keeps median incomes at higher levels.
  There are other economic distress criteria in the CDFI program, Mr. 
President, but they all share one thing in common: they all fail to 
fully register the unique economic distress found in a good part of 
rural America.
  This leads me to the most frustrating aspect of the CDFI program for 
many low-population rural areas. Current CDFI guidelines consider an 
area economically distressed and suffering from out-migration if county 
population loss between 1980 and 1990 was at least 10 percent. This 
effort to utilize out-migration figures as a measure of economic 
distress is laudable. However, the CDFI program does so in a manner 
that does nothing for many parts of rural America, including my state.
  Mr. President, change in the size of a population has two components. 
One is what demographers term natural population growth. This is 
computed by subtracting deaths from births. The other variable is 
migration, which is determined by subtracting departures from arrivals.
  If you assumed that out-migration-related economic distress was 
determined under the CDFI program by looking at out-migration numbers, 
you would be mistaken. In fact, birth and mortality rates are 
effectively factored into calculations of out-migration.
  Instead of net migration loss, the determinate criterion under 
current CDFI guidelines is the change in the overall sum total of the 
population from 1980 to 1990. Consequently, many counties that have 
experienced a continual hemorrhage of population to the cities, but 
also which have robust birth rates and long life expectancies, have not 
qualified for the CDFI program.
  Mr. President, this makes no sense. Natality and mortality rates have 
nothing to do with out-migration.
  Just a couple of statistics illustrate why this problem needs to be 
fixed. Nearly every non-metro county in North Dakota experienced a more 
than 10 percent net migration loss between 1980 and 1990. However, 
today only slightly more than two thirds of rural North Dakota counties 
qualify for the CDFI program because the program's guidelines measure 
overall population change, not net migration loss. Birth rates have 
been high enough and lifespans long enough to hide the real story of 
out-migration in a dozen counties in my state.
  Mr. President, instead of wheat or sunflowers, the top export in many 
parts of farm country is people. Unless they can find work in the 
shrinking agriculture industry, increasing numbers of Americans who 
were born and raised in the rural Upper Great Plains are being forced 
to the cities to find work. They become statistics in a continuing and 
under-recognized exodus driven by economic depression, one that is 
destroying two of our nation's greatest assets: its small towns and 
family farms.
  Mr. President, I want to see the CDFI program work for rural America, 
to help save our rural communities and keep people on the land. Today, 
I am introducing legislation that will help it do just that.
  Mr. President, my bill is very simple. It amends the Riegle Community 
Development and Regulatory Improvement Act of 1994 to allow non-metro 
counties to qualify for the CDFI program if net migration loss--rather 
than just overall population loss--was at least 10 percent during the 
years 1980 to 1990.
  Let me be clear: my bill does not strike any part of the Riegle Act 
and does not make major revisions to that landmark legislation. Rather, 
my bill makes a technical, perfecting correction that will help make 
the CDFI Fund work as intended for rural America. Consequently, I have 
entitled this measure the CDFI Technical Corrections Act.
  Eighteen states and the District of Columbia, had populations of 
fewer than two million people during the 1990 Census, Mr. President. 
That is roughly one-third of the states. Yet of all the Core Component 
loans the CDFI Fund has made over the past three years, only about 12 
percent have been to entities in these low-population states. The CDFI 
economic distress criteria need to be changed to more accurately 
reflect the level of economic distress in much of rural America. I urge 
my colleagues to join me in fixing the CDFI economic distress criteria 
by passing my technical corrections bill.
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