Ensuring Diversity in Community Banking Act of 2019
BREAK IN TRANSCRIPT
Mr. MEEKS. Mr. Speaker, I thank the gentleman for yielding. Let me just say how proud I am that the House is taking up my bill today, the Ensuring Diversity in Community Banking Act.
I am especially grateful for the support from Financial Services Chairwoman Maxine Waters and for her guidance and for working with me to make sure that we progress and move this bill.
I am likewise eternally grateful to Ranking Member McHenry, who worked with us very closely to make sure that this bill had true, strong bipartisan support. As a result, it passed the House Financial Services Committee unanimously. Without that partnership, this would not have happened.
So, I thank both the chair and the ranking member, and all the members of this committee, for doing this. This bill passed in committee unanimously and has gained the support of consumer advocacy groups, civil rights organizations, and the financial services industry. We tried to bring everybody together on this, and we did come up with a consensus bill.
Communities of color have borne a disproportionate burden of the COVID pandemic, as measured by the infection and mortality rates, as well as jobs lost and wealth destroyed. This pandemic and the economic crisis it triggered devastated communities that had yet to fully recover from the financial crisis of 2008.
Minority banks, credit unions, and community development financial institutions have remained the bright spot during this pandemic, given their focus of providing financial services to communities of color and low- and moderate-income communities. However, despite their success serving these communities, minority depository institutions have been disappearing at an alarming rate, leading to expanding banking deserts and a growing share of the population vulnerable to payday lenders and other predatory financial institutions.
To address this, this bill does the following:
Number one, minority depository institutions are smaller than their peers, pose no credible systemic risk, and focus overwhelmingly on underbanked communities of color, investing in homeownership and small business lending, helping to close the wealth gap. My bill makes it easier for MDIs that are also community development organizations to raise capital from private investors and directs the Federal Government to deposit funds that are fully insured with these institutions which can on-lend the money in communities that need it.
Number two, the bill calls on regulators to take greater ownership of their own failings in the area of diversity by auditing the diversity of the bank examiner corps, publishing the data, and considering how their own lack of diversity and lack of special training harms their effectiveness.
Number three, the bill establishes a new impact bank designation for those institutions that lend primarily to low-income communities and provides these banks access to the deposits programs established by this bill.
Number four, the bill also calls on the Congress to continue supporting the CDFI Fund of the Treasury Department.
BREAK IN TRANSCRIPT
Mr. MEEKS. Mr. Speaker, the CDFI Fund leverages limited government funding to crowd-in significant private sector capital and foster innovation, investments, and market-oriented solutions to tackle some of our Nation's most persistent challenges in poverty alleviation. This program has earned strong bipartisan support historically and proven itself immensely valuable during this pandemic.
Let me also say that what this does is it also helps our small businesses in the communities and helps create wealth in communities where it is not. With the homeownership aspect, it encourages individuals to buy, to own the home and to rent the car because the home becomes an appreciating asset and the car the depreciating asset. It brings us all together so we can enjoy what has become the American Dream.
Let me close by once again thanking my colleagues for their bipartisan support for this important legislation. I thank all of my colleagues for working together to make this a better place, and I urge all of my colleagues to vote in support of this bill.
BREAK IN TRANSCRIPT