Bill Overview
Title: Promoting and Advancing Communities of Color Through Inclusive Lending Act
Description: This bill expands the support of, and access to, community development financial institutions, minority lending intuitions, and minority depository institutions. These institutions provide financial services to economically distressed or minority communities. The bill provides mandatory funding set-asides for assistance to minority lending institutions and establishes the Office of Minority Lending Institutions to administer these funds. The bill also establishes the Office of Diverse and Mission-Driven Community Financial Institutions to monitor and support institutions seeking certification. Further, the bill provides for technology grants, a pilot program for establishing new institutions, and various studies and reports.
Sponsors: Rep. Waters, Maxine [D-CA-43]
Target Audience
Population: Individuals in economically distressed or minority communities
Estimated Size: 132000000
- The bill focuses specifically on communities of color, which includes individuals who are part of racial and ethnic minority groups.
- It impacts financially underserved communities by providing support through financial institutions that cater specifically to their needs.
- Community development financial institutions, minority lending institutions, and minority depository institutions often work with low to moderate-income areas, which means individuals in these income brackets are directly impacted.
- The establishment of new financial institutions through the pilot program aims to bolster financial services in areas that currently have limited access, affecting those currently underserved.
Reasoning
- The policy targets communities of color and economically distressed areas, which means we must include individuals who represent a range of racial and ethnic backgrounds living in such conditions.
- The effect of the policy will vary depending on the level of access these individuals currently have to financial services and the extent to which new financial opportunities can be made available to them.
- While the policy focuses on minority and economically distressed communities, it may not impact individuals who already have adequate access to financial services or those in affluent areas.
- Cost considerations must account for the likely significant number of individuals impacted, so it is crucial to estimate the commonality of each type of person within the constraints of the policy's budget.
Simulated Interviews
Small business owner (Los Angeles, CA)
Age: 45 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- I have struggled to get loans for my business because the banks always see it as high risk.
- If this policy helps me get the funds I need to expand my store, it would make a huge difference.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 9 | 6 |
| Year 10 | 9 | 6 |
| Year 20 | 8 | 6 |
Teacher (Houston, TX)
Age: 35 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- Financial instability is common among the families of my students, affecting their performance.
- Access to better financial options could improve the living conditions for many of these families.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 5 |
Bank teller (Albuquerque, NM)
Age: 28 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- I see many Native families turned down for loans because of previous debt and lack of options.
- I believe this policy could help change that barrier.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 6 |
Retired (Chicago, IL)
Age: 60 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 8/20
Statement of Opinion:
- I mostly rely on a fixed income since my retirement, and it's stressful to stretch it.
- Any new opportunities that help secure my finances are welcome.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 5 |
Community organizer (Miami, FL)
Age: 52 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- I've been advocating for better financial services for Latinos for years.
- This policy seems aligned with what our community needs.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 7 |
Researcher (Detroit, MI)
Age: 26 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- Research shows that increased access to lending can significantly improve economic mobility.
- If this works, we would see a great deal of improvement in minority areas.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 6 |
IT specialist (Seattle, WA)
Age: 41 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 2.0 years
Commonness: 7/20
Statement of Opinion:
- I already have decent access to financial services, but I think the policy can help others in my community.
- First-gen immigrants often face barriers that I managed to navigate.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Non-profit director (Bronx, NY)
Age: 39 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- Supporting minority communities financially can ease the burden many of our clients face.
- We might be able to offer more services with better funding options.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 9 | 6 |
| Year 10 | 9 | 6 |
| Year 20 | 8 | 6 |
Construction worker (Milwaukee, WI)
Age: 30 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 12/20
Statement of Opinion:
- I see how financial struggles affect my wife's family, not so much mine.
- If it means more opportunities for her side, I'm all in.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 7 |
Entrepreneur (Atlanta, GA)
Age: 50 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- I've faced financing challenges often tied to my status as a Black female entrepreneur.
- This policy can bring meaningful change to access for people like me.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 9 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 7 |
Cost Estimates
Year 1: $1300000000 (Low: $1000000000, High: $1500000000)
Year 2: $1300000000 (Low: $1000000000, High: $1500000000)
Year 3: $1300000000 (Low: $1000000000, High: $1500000000)
Year 5: $1300000000 (Low: $1000000000, High: $1500000000)
Year 10: $1300000000 (Low: $1000000000, High: $1500000000)
Year 100: $1300000000 (Low: $1000000000, High: $1500000000)
Key Considerations
- The effectiveness of new financial institutions in actually reaching and serving minority communities could impact the overall success of the policy.
- Establishing the Office of Minority Lending Institutions could lead to challenges in regulatory compliance and oversight.
- Cooperation with existing financial institutions is crucial to avoid overlap and redundancy.