Community Development Policy
LIIF works to advance the community capital industry nationwide and helps to mobilize public resources for distressed communities across the country. Our community development agenda has two primary goals:
- Protect mainstay community capital programs, such as the US Department of the Treasury’s CDFI Fund programs, New Markets Tax Credits, and the Community Reinvestment Act
- Support innovative, new initiatives to grow the community development field
LIIF works in partnership with community development organizations and coalitions to advance this mission. We are a member of the New Markets Tax Credit Coalition Board, the CDFI Coalition, and Opportunity Finance Network.
New Markets Tax Credit
The current availability of NMTCs meets only a fraction of the demand. In 2018, 214 CDEs applied for more than $14.8 billion in NMTCs; the CDFI Fund was able to award 73 CDEs with a total of $3.5 billion in Credit authority.
The NMTC is set to expire at the end of 2019 unless Congress acts. The New Markets Tax Credit Extension Act of 2019 (H.R. 1680 and S. 750), introduced by Senators Ben Cardin (D-MD) and Roy Blunt (R-MO) and Representatives Terri Sewell (D-AL) and Tom Reed (R-NY), would make the NMTC a permanent part of the tax code and index the credit to inflation. LIIF strongly urges Congress to enact the bipartisan New Markets Tax Credit Extension Act of 2019 and provide much-needed certainty to investors, CDEs, and low-income communities.
The CDFI Fund is currently funded at $250 million annually. Given that there is drastically more demand for resources than the CDFI Fund has available, LIIF joins our partners in urging Congress to increase annual CDFI Fund appropriations to $300 million.
Healthy Food Financing Initiative
Increased local availability of fresh, healthy food has been linked to families making more nutritious food choices and maintaining better health. LIIF supports local, state and federal policies, such as the national Healthy Foods Financing Initiative (HFFI), that support food access for low-income communities. To date, LIIF has been awarded $15 million in HFFI funds from the CDFI Fund to support healthy food retail and community projects.
HFFI is currently funded at $22 million annually. LIIF advocates for an increase in HFFI funding as part of the broader $300 million appropriation request for the CDFI Fund.
The CDFI Program offers both Financial Assistance (FA) and Technical Assistance (TA) awards to CDFIs that can be used to finance a variety of projects, including CDFI assistance to persons with disabilities. These competitive awards enhance CDFIs’ ability to serve persons with disabilities.
Disability Grants currently receive a $3 million set-aside within the CDFI Fund’s FA and TA awards. LIIF advocates for an increase in this set-aside to serve more persons with disabilities.
Community Reinvestment Act
CRA has been invaluable to communities and individuals over the more than 40 years since it was enacted. The National Community Reinvestment Coalition (NCRC) estimates that banks have made $1 trillion in community development loans since 1996, supporting affordable housing and community development projects benefiting LMI communities and individuals.
In 2018, the Office of the Comptroller of the Currency (OCC) released an advance notice of proposed rulemaking (ANPR) detailing potential changes to the rules and regulations surrounding the law. LIIF submitted a comment letter to the OCC in November 2018 supporting efforts to modernize CRA, so long as any changes at least maintain and ideally expand investment in LMI communities and individuals. LIIF continues to monitor potential changes to CRA regulations and will submit comments in support of retaining a strong CRA regulatory regime.
LIIF has been engaged in policy conversations around the newly created Opportunity Zones tax incentive. A top policy priority for LIIF is ensuring that there are strong data collection and reporting requirements included in the rules and regulations surrounding this new tax incentive. On May 31, 2019, we submitted a comment letter to the Treasury Department enthusiastically supporting strong reporting requirements in Opportunity Zones.