Bill Overview
Title: CDFI Crisis Fund Act
Description: This bill establishes the CDFI National Crisis Fund. The fund is authorized to make grants to community development financial institutions (CDFIs) providing financial products as emergency assistance to small businesses and low-income populations in certain circumstances. Furthermore, the fund is triggered by certain emergency declarations, including the COVID-19 emergency period; certain disaster declarations; a specified increase in a statewide unemployment rate; or a specified increase in the nationwide unemployment rate. Specified amounts in the fund are set aside for grants to Native and minority CDFIs. The Government Accountability Office must report on the impact of the fund and provide recommendations.
Sponsors: Sen. Schatz, Brian [D-HI]
Target Audience
Population: Individuals in low-income populations and small business owners served by CDFIs
Estimated Size: 50000000
- CDFIs serve communities by providing financial services to underserved populations, especially in low-income areas.
- The primary beneficiaries of this act are likely to be entities that receive support from CDFIs - namely small businesses and low-income individuals.
- The bill supports CDFIs when emergency conditions are met, meaning its impact is tied to external economic and natural crisis conditions.
- Native and minority CDFIs have specified amounts reserved, indicating a focus on supporting these communities during crises.
- Funding release is linked to national and state-level economic indicators like unemployment rates, indicating broad potential reach.
Reasoning
- CDFIs primarily aim to provide financial services to low-income and underserved communities. This includes those who may not qualify for traditional banking services.
- The policy targets these institutions during emergencies, expecting them to extend necessary financial products and services to individuals during crises, such as job loss, business disruption, or natural disasters.
- The specified budget caps indicate that while the support is substantial, it is also limited and must be effectively distributed to maximize impact.
- The focus on Native and minority CDFIs underscores a commitment to equity and reaching populations who have historically faced barriers in financial access.
- When crafting simulation interviews, it's important to consider varied geographic and economic contexts, as well as differing levels of awareness and use of CDFI services among the population.
Simulated Interviews
Small Business Owner (Detroit, MI)
Age: 35 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 2.0 years
Commonness: 11/20
Statement of Opinion:
- The support from CDFIs during the pandemic was crucial for keeping my business afloat.
- I'm hopeful that the new policy will provide quicker responses and better funding during future crises.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 6 | 4 |
| Year 10 | 5 | 3 |
| Year 20 | 4 | 3 |
Freelance Graphic Designer (Phoenix, AZ)
Age: 42 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 1.5 years
Commonness: 10/20
Statement of Opinion:
- CDFIs have been helpful when I've needed financial products that banks were unwilling to provide.
- The policy seems like it could be a strong safety net.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 5 | 4 |
| Year 10 | 5 | 4 |
| Year 20 | 4 | 3 |
Non-Profit Worker (Oakland, CA)
Age: 27 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- Our community relies heavily on CDFIs for affordable housing and development projects.
- The additional support could lead to more stable and timely project funding.
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 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 4 |
Retired Teacher (Jackson, MS)
Age: 54 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 0.5 years
Commonness: 12/20
Statement of Opinion:
- I've heard of CDFIs but never used them.
- If they help during emergencies, maybe our community could benefit.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Community Organizer (Navajo Nation, AZ)
Age: 30 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 3.0 years
Commonness: 7/20
Statement of Opinion:
- This policy could mean increased funding for our projects, which is much needed.
- I've seen CDFIs make a real difference when they have the resources.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 4 |
| Year 5 | 6 | 4 |
| Year 10 | 5 | 3 |
| Year 20 | 5 | 3 |
Health Care Worker (Houston, TX)
Age: 38 | Gender: female
Wellbeing Before Policy: 3
Duration of Impact: 2.0 years
Commonness: 13/20
Statement of Opinion:
- Having financial safety nets is reassuring, especially considering past struggles.
- I haven't used a CDFI directly, but knowing there's more to rely on is comforting.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 3 |
| Year 2 | 5 | 4 |
| Year 3 | 5 | 4 |
| Year 5 | 4 | 4 |
| Year 10 | 4 | 3 |
| Year 20 | 4 | 3 |
Small Equipment Manufacturer (Chicago, IL)
Age: 60 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 3.0 years
Commonness: 10/20
Statement of Opinion:
- Emergency loans from CDFIs were crucial; further support feels timely.
- This policy could prevent future financial distress during emergencies.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 7 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 5 | 4 |
| Year 10 | 5 | 4 |
| Year 20 | 4 | 4 |
Restaurant Manager (New Orleans, LA)
Age: 47 | Gender: female
Wellbeing Before Policy: 3
Duration of Impact: 2.5 years
Commonness: 12/20
Statement of Opinion:
- The idea of more robust financial assistance during disasters is promising.
- I'm cautiously optimistic about the policy's potential.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 3 |
| Year 2 | 5 | 4 |
| Year 3 | 5 | 4 |
| Year 5 | 4 | 4 |
| Year 10 | 4 | 3 |
| Year 20 | 4 | 3 |
College Student (Brooklyn, NY)
Age: 21 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 1.0 years
Commonness: 15/20
Statement of Opinion:
- Not sure if CDFIs apply to me but knowing there's financial support during crises is good to know.
- Could be useful in times I need financial products beyond what the college financial aid covers.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Retired Farmer (Rural Kansas)
Age: 68 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 1.0 years
Commonness: 14/20
Statement of Opinion:
- Not particularly relevant to me at this time.
- If emergencies arose in the community, having more financial options might be beneficial.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Cost Estimates
Year 1: $75000000 (Low: $50000000, High: $100000000)
Year 2: $75000000 (Low: $50000000, High: $100000000)
Year 3: $80000000 (Low: $60000000, High: $110000000)
Year 5: $85000000 (Low: $60000000, High: $120000000)
Year 10: $95000000 (Low: $70000000, High: $130000000)
Year 100: $150000000 (Low: $100000000, High: $200000000)
Key Considerations
- The unpredictable nature of crisis triggers means actual annual costs could vary significantly.
- Funds are specifically designated for Native and minority CDFIs, indicating a strong intent to address financial inequalities.
- Large variations in unemployment rates could lead to more frequent fund activations, affecting fiscal planning.