DearColleague.us

Letter

Sending Office: Honorable Gregory W. Meeks
Sent By:
Aaron.Jordan@mail.house.gov

Deadline: Noon, March 18, 2020

Current Signers: 

Beyer, Cárdenas, Carson,
DeLauro,
DeSaulnier, Eshoo,
Espaillat, Fudge,
Foster, Gabbard, García, Gonzalez, Lynch, Horsford, Maloney (Carolyn), McAdams, Moulton, Neguse, Panetta, Payne Jr., Pressley, Raskin, Rice, Schrier, M.D, Scott (David), Sewell, Slotkin, Speier, Velazquez,
Waters, Wilson

Please join Congressman Meeks in requesting no less than $10 million to fund the small dollar loan program under Section 1206 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

This Dodd-Frank provision encourages Community Development Financial Institutions (CDFI),# including CDFI banks and credit unions, to establish safe and affordable small dollar loan programs. The goal of these programs is
to bring consumers into the regulated banking sector and incentivize alternatives to payday lending.

As a part of its FY 2021 Budget Views, the House Financial Services Committee backed funding the CDFI small dollar loan program. The Financial Services Committee Report stated that Section 2016 was enacted because it would “increase
consumer access to mainstream financial institutions and provide more affordable and safe alternatives to high-cost payday loans.”

Last year, the program received $5 million in funding and the letter received 52 signatories. This year we hope for another strong sign on letter and are aiming for a full $10 million for the program.

Thank you for considering joining this letter. Should you have any questions or seek to join this letter please reach out to Aaron Jordan at
Aaron.Jordan@mail.house.gov.

Sincerely,

Gregory W. Meeks

Member of Congress

 

Full Letter Below

 

Dear Chairman Quigley and Ranking Member Graves,

As you develop the Fiscal Year 2021 Appropriations Bill, we respectfully request that you provide no less than $10 million to fund the small dollar loan program under Section 1206 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act. 

This Dodd-Frank provision encourages Community Development Financial Institutions (CDFI), including CDFI banks and credit unions, to establish safe and affordable small dollar loan programs. The goal of these programs is to bring
consumers into the regulated banking sector and incentivize alternatives to payday lending.

Access to banking services remains a crucial issue in the United States. More than a quarter of Americans are unbanked or underbanked and the Federal Reserve Bank of Saint Louis estimates that up to 12 million Americans take out
payday loans each year. Given these figures, it is crucial that regulated financial institutions enter the small dollar loan space. Increased competition in small dollar loans would augment underwriting standards, broaden availability of credit, and ultimately
drive down the price of credit.

This program is an investment in the financial health of America’s most underserved borrowers and consumers. Particularly given recent financial turmoil and heightened recession fears, it is crucial that Congress work to ensure
all Americans have access to loans if they fall on tough times. The Treasury Department has explained that this program is not about providing an ongoing subsidy to CDFIs, but rather about covering initial startup costs and fraying regulatory risk concerns
related to the small dollar space.

As a part of its FY 2021 Budget Views, the House Financial Services Committee endorsed the CDFI small dollar loan program. The Financial Services Committee Report stated that Section 2016 was enacted because it would “increase consumer
access to mainstream financial institutions and provide more affordable and safe alternatives to high-cost payday loans.”

Last year, Congress appropriated $5 million to the CDFI small dollar loan program for which all the undersigned members are grateful. Nonetheless, a full $10 million appropriation would be ideal and really help booster CDFI small
dollar lending products.

Considering the billions in fees Americans pay annually for high cost financial products, a mere $10 million is a small investment Congress can make that would broaden access and affordability of credit in America for low-and-moderate
income families. As such, we ask to appropriate $10 million to the Section 1206 small dollar loan program for CDFIs.

Sincerely,

 

Related Legislative Issues

Selected legislative information: Appropriations, Consumer Affairs, Finance

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