Congresswoman Stacey E. Plaskett Announces Passing of Important Amendment That Request for Cancellation of the Virgin Islands Community Disaster Loans (CDL) Stemming from the 2017 Hurricanes
Statement
Congresswoman Stacey E. Plaskett released the following statement regarding an important amendment to the FY'21 Homeland Security Appropriations Bill regarding cancellation of the CDL's for the Virgin Islands:
"The USVI obtained Community Disaster Loans (CDLs) to offset lost revenue from the devastation caused by the 2017 hurricanes. The aggregate principal amount of those loans is approximately $300 million. The CDL promissory notes are extremely restrictive, requiring the territory to obtain express consent of the U.S. Treasury before undertaking any new obligations over $25,000 and encumber its major revenue streams with a security interest.
"Congresswoman Bonnie Watson Coleman offered an amendment in committee that was accepted that granted cancellation of the CDLs and would remove the restrictions imposed on the territory's ability to obtain financing to help it smooth out the massive revenue losses caused by the COVID-19 pandemic. Even before COVID-19, the territory was likely to qualify for loan cancellation under the terms of the CDL promissory notes, as well as under applicable regulations. The fiscal crisis resulting from the pandemic makes the need for cancellation even more urgent.
"The USVI cannot afford to take revenue desperately needed for the current crisis and use it to fund debt service from the previous one. Because the CDLs were likely assigned a subsidy amount by the Treasury Department under the Federal Credit Reform Act, the budget cost of cancellation should be substantially lower than the face amount of the debt.
"Even before the COVID-19 outbreak, the Territory was likely to qualify for loan cancellation under the terms of the CDL promissory notes, as well as under applicable regulations. The fiscal crisis resulting from the pandemic makes the need for cancellation even more urgent. The Government cannot afford to take revenue desperately needed for the current crisis and use it to fund debt service from the previous one."
Source