Recaps, Outlines Federal COVID-19 Relief Efforts
On May 7, U.S. Senator Chuck Schumer hosted an online briefing for CDFIs in New York State. More than 90 people were on the call, but we’re providing a recap for anyone who missed it.
The Senator thanked CDFIs for the work they are doing “trying to get some money to people.” He noted that small businesses, minority communities and the underbanked are too often neglected, and that CDFIs are “doing God’s work … and I’m here to help you.”
He provided a recap of the relief measures that have been taken already, starting with the PPP which he described as “a mess.” He said that the original CARES act introduced by Republicans in the Senate was a “corporate bill.” He and his colleagues negotiated to get each adult making less than $75k/ year a $1,200 stimulus payment – up from a proposed $600 for those with lower incomes.
He and the Democratic conference fought for important things under the COVID relief bills including:
- a Marshall Plan for the healthcare system, $150B of flexible funding, $25B of which went to NYS;
- Pandemic unemployment insurance, the largest social welfare program since the Great Society of Lyndon Johnson;
- Small business relief – forgivable loans and paycheck protection, fought to include nonprofits and religious institutions;
- $150B for local government, $10B of which went to NYS, $4B went to mass transit; and
- Support for K-12 and higher education, relief to recipients of Pell Grants.
They also worked to increase accountability for the “big shot companies” who had “no accountability” under the original measure. They added an additional provision that “no big shot in government who owns a company, or whose family owns a company can get any money,” because they didn’t want “all the money to go to golf courses or hotels or things like that.”
He also discussed efforts around housing – including securing $685B for Public Housing Operating; moratorium on evictions; 6 months delay on foreclosures. He fought for additional funds for nutrition programs and food banks.
The Senator said that the second CARES act was more focused on small business. He again referred to the PPP as “a mess” and said the funds were “gobbled up by big businesses and anyone who had a pre-existing relationship with a bank … The banks were more eager to go with their big shot customers than the unbanked, which is what we had intended the money to for and what we told the treasury to do.” He wanted to make sure the “mom and pop stores, the single proprietors, the barbershops and the restaurants – I call it the butcher, the baker and candlestick maker” got the help they needed. He continued, “Communities of color, rural communities, and CDFIs were left out – and you are great at serving the businesses.”
The Senator believes the second CARES act should make things much better. $60B was set aside just for small and midsized banks and community-based lenders like CDFIs to provide assistance to underserved and un-banked communities. His goal with the set-aside was to “significantly increase lending by CDFIs and the MDIs, because lenders like you have a track record of expanding access to capital for businesses that have struggled getting assistance from traditional banking institutions.”
He’s also been pushing US Treasury Secretary Steve Mnuchin every day to issue guidance so it’s easier for CDFIs to become PPP lenders. He’s disappointed about the “unworkable requirements like the $10M threshold of activity,” and he’s trying to get the Federal Reserve to open up its PPP lending to CDFIs to improve access to liquidity.
Senator Schumer announced on the call that he’s calling for all the PPP funds that are being returned by big businesses who had other resources to “go to CDFIs and MDIs exclusively.” He noted that “CDFIs have done over $5B in Round II lending, but we need more” and thinks that these returns will “be in the billions of dollars.”
He said, “I want to thank all of you again for the work you’re doing,” and said that if there’s a silver lining to this horrible crisis, it’s that “we could permanently restructure the way we operate so that the bigshots don’t get so much of the money and the people at the bottom who need the help get some of it … and one of the best ways to do that is CDFIs.”
He said that he is working closely with Speaker Pelosi and Rep. Maxine Waters and Rep. Nydia Velázquez to advocate for CDFIs and opened the call to questions.
Maurice Jones of LISC, who moderated the call, asked whether the Senator plans to support a supplemental appropriations request for the CDFI Fund in the next COVID-19 relief package?
“Absolutely, we have to do more.” He knows that CDFIs called for $1B in new funding and said that was “the level that this crisis requires – and we will support it in the new bill.”
Colleen Ryan, Consulting Executive Director of the NYS CDFI Coalition, asked if the Senator thinks there will be a third authorization of the PPP, and if so, would he support a carve out specifically for MDIs and CDFIs?
Yes, he will advocate for a carveout. He said the House will be able to pass it, but in the Senate, it’s going to be a hard fight, given Republican resistance to the last bill when he made an effort to create a set-aside in PPP.
Cathie Mahon, President/CEO, Inclusiv, asked if the Senator believes that the next COVID-19 legislation will include resources to support the residents and owners of affordable housing projects?
He said that the moratorium against eviction was a start, but they’re also planning to propose a large pool of money to go to rental assistance so people can pay back rent when this is all over. He said that developers of affordable housing will also need support and lawmakers are working on that as well.
Dan Marsh, President of the National Development Council, asked if the Senator thought that there would be an opportunity later this year to get a long-term extension, or better yet program permanency, for the New Market Tax Credit?
The Senator said “That’s my goal – I love the New Market Tax Credit … it revitalizes poorer communities better than just about anything else.” He said if it wasn’t included in the next CARES bill, the Appropriations bill was coming up, and encouraged CDFIs and their supporters to put their efforts into making that permanent – “and get more money, too.”
Maurice Jones wrapped up the call by saying that CDFIs are fighting for the most vulnerable people and places around the country, “and we’re so glad that we’ve got you in the Senate to help us with that fight.”
The Senator said that while it was nice to have been able to spend more time with his family, the other good outcome of this crisis is that it has put a “magnifying glass – this crisis – on what’s wrong with the American economy … Minority communities, underserved communities – rural as well – impoverished communities, are just let down.” He hopes that we can use the crisis to make changes that will improve life for all of us in the long term.
He closed by thanking CDFIs again for the “great work that you do to make people’s lives better … We’ve got to get to some level of equality – we are one of the most unequal societies even though we’re among the wealthiest. We’ll work together to make that happen.”