[Congressional Record (Bound Edition), Volume 162 (2016), Part 4]
[Extensions of Remarks]
[Page 5423]
[From the U.S. Government Publishing Office, www.gpo.gov]




 INTRODUCTION OF THE ``INVESTING IN AMERICA'S SMALL BUSINESSES ACT OF 
                                 2016''

                                 ______
                                 

                        HON. CAROLYN B. MALONEY

                              of new york

                    in the house of representatives

                        Thursday, April 28, 2016

  Mrs. CAROLYN B. MALONEY of New York. Mr. Speaker, I am pleased to 
introduce the Investing in America's Small Businesses Act of 2016. This 
important legislation allows Community Development Financial 
Institutions, known as CDFIs, to extend affordable credit to more small 
businesses in underserved communities through microloans. These small 
loans, under $50,000, give businesses working capital, help them invest 
in new equipment or supplies, and have no pre-payment penalties.
  I'm proud that the Investing in America's Small Business Act has 
gained the endorsements of the CDFI Coalition and the National 
Federation of Community Development Credit Unions, the national voices 
for these community-based institutions.
  The bill provides grants for CDFIs to establish loan-loss reserve 
funds for microloans, which will help CDFIs leverage private investment 
to expand small business lending in underserved communities.
  Small businesses are critical engines of economic development and job 
creation. In underserved communities, however, small businesses with 
low-income and minority owners often have limited access to affordable 
credit they need to meet everyday demands or expand their operations. 
According to a study commissioned by the U.S. Small Business 
Administration in 2013, ``the major constraint limiting the growth, 
expansion, and wealth creation of small firms--especially women- and 
minority-owned businesses--is inadequate capital.''
  Community Development Financial Institutions serve exactly these 
communities--with great success and economic benefit. In fact, a 2014 
report by the Darden School of Business at the University of Virginia 
found that despite serving predominately low-income markets, CDFI banks 
and credit unions had virtually the same level of performance as 
mainstream financial institutions. Despite this demonstrated success, 
CDFIs often lack the capital to meet the needs of many promising small 
businesses.
  Recently, private sector financial institutions have stepped in to 
assist CDFIs in their mission to provide affordable, responsible 
lending to underserved communities. This month, JP Morgan Chase 
announced a five-year, $125 million investment in CDFIs, building upon 
a pilot program which allowed 26 CDFIs to raise more than $226 
million--seven times JPMorgan's initial grant--and make $100 million in 
loans, finance the preservation and development of over 2,000 units of 
affordable housing, and lend to over 130 small businesses.
  These efforts are commendable, but private sector investments are not 
enough to address the significant need for small business credit in 
underserved communities. Research shows that minority-owned businesses 
typically encounter higher borrowing costs, receive smaller loans and 
see their loan applications rejected more often. CDFIs are well-placed 
to provide access to affordable credit through microloans to struggling 
small businesses and entrepreneurs in underserved communities.
  Let's give small businesses in underserved areas the tools they need 
to create jobs and develop their communities. I am pleased to introduce 
this bill, and urge my colleagues to join in support.

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