Last week, the White House announced the Economic Opportunity Coalition, a solid step to help underserved communities. The federal government and a coalition of 24 companies and foundations are aligning historic investments in underserved communities. The EOC members have made significant commitments across each of its four focus areas, including a number of investments since the group formed earlier this year. The below illustrative commitments made by EOC members to date signal a promising new era of historic investments in underserved communities.
- Investing in CDFIs and MDIs. The EOC has committed more than $3 billion of investments into CDFIs and MDIs, including $250 million in long-term, low-interest debt and over $70 million in grants to CDFIs and MDIs. In addition, six Coalition members will provide technology and personnel to CDFIs and MDIs through secondment programs, pro-bono consulting, and pro-bono technology. Taken together, these investments will provide CDFIs, MDIs, and their ecosystem partners with the long-term funding, technology, and personnel required to scale and deliver the increased capital made available by the Biden-Harris Administration through the Emergency Capital Investment Program (ECIP). To support these efforts, the federal government is actively working to provide private sector and philanthropic partners with rigorous guidance on where private investment, technology support, and human capital development can generate the greatest impact among CDFIs and MDIs.
- Supporting entrepreneurship and minority-owned businesses. The EOC has committed to purchase more than $6 billion in products and services from diverse suppliers and has invested more than $500 million in funding to Black- and Hispanic-owned and -led equity funds. In addition, six Coalition members are making investments in technology and technical assistance programs that will help entrepreneurs access capital and build capabilities in e-commerce, financial management, and hiring. These capability investments will help entrepreneurs effectively access the nearly $10 billion in loans and equity investments made available to support small businesses through the American Rescue Plan’s $10 billion State Small Business Credit Initiative (SSBCI), as well as up to ten times that amount in additional private capital that can be leveraged from these federal investments.
- Expanding inclusive and equitable access to credit and other financial services facilitating financial health. An EOC member is announcing a $40 million investment in a new research center and incubator to promote innovation in financial services products for underserved consumers. The same EOC member also plans to invest $35 million in a new fund to finance early-stage companies developing next generation financial services solutions for low-wealth consumers and small businesses. In the coming weeks and months, the White House, the Department of the Treasury, and the Consumer Financial Protection Bureau, an independent agency, will convene Coalition members and other industry stakeholders, data scientists, advocates, and agencies to share data and assessments of existing credit reporting practices – especially during disasters and other anomalous events – and discuss potential policy and industry action.
- Making infrastructure investments that create more community wealth by preserving and expanding affordable rental housing and homeownership in underserved neighborhoods. Members of the Coalition have committed over $25 billion towards expanding the supply of affordable housing, including a real estate impact fund that has already deployed $3.5 billion and intends to deploy another $11.5 billion by 2026 to invest in the preservation and improvement of affordable housing and community revitalization to support building inclusive communities that have been historically underserved. These resources will complement the Administration’s actions to boost the housing supply through preservation and production of affordable homes announced in May 2022, economic development investments in 60 regions across the country through the American Rescue Plan’s Build Back Better Regional Challenge, and the new $1 billion Reconnecting Communities Program through the Bipartisan Infrastructure Law.
All of this also builds on the Inflation Reduction Act of 2022. It strengthens small businesses by closing tax loopholes and ensuring that large corporations are held accountable and pay their fair share. This is critically important because our nation’s tax system has unfairly benefited the largest corporations at the expense of small business owners, their employees, and independent entrepreneurs. Our colleagues as SmBizMajority are garnering support for the passage.