Treasury Department funds aid CDFI effort

Treasury Department officials said the agency’s Community Development Financial Institutions Fund (CDFI Fund) has earmarked grants totaling over $10.8 million to help expand financial institution consumer access.© Shutterstock Officials said Community Development Financial Institutions (CDFIs) would benefit from the allocation via the Small Dollar Loan Program (SDL Program). “I am proud to announce the inaugural […]

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Treasury Department officials said the agency’s Community Development Financial Institutions Fund (CDFI Fund) has earmarked grants totaling over $10.8 million to help expand financial institution consumer access.

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Officials said Community Development Financial Institutions (CDFIs) would benefit from the allocation via the Small Dollar Loan Program (SDL Program).

“I am proud to announce the inaugural round of Small Dollar Loan Program awards, which will help provide borrowers affordable alternatives to high rate small dollar loans and expand consumer access to mainstream financial products,” CDFI Fund Director Jodie Harris said. “Awards will provide CDFIs capital needed to establish loan loss reserves that are critical to the support of small dollar lending initiatives, as well as provide technical assistance to help build their capacity to operate small dollar loan programs.”

The SDL Program aids Certified CDFIs in addressing expansion of consumer access to mainstream financial institutions. The CDFI Fund enables grants for Loan Loss Reserves (LLRs) — establishing a loan loss reserve fund to defray the costs of establishing or maintaining a small dollar loan program and Grants for Technical Assistance (TA), supporting technology, staffing and other eligible activities allowing a Certified CDFI to establish and maintain a small dollar loan program.

With regard to the funding allocation, the Treasury Department indicated that of the 52 recipients, 13 SDL Program awards totaling nearly $3 million were awarded to recipients with headquarters located in what have been designated as Persistent Poverty Counties.

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Warner, Himes introduce Portable Retirement and Investment Account Act

A pair of lawmakers have introduced a measure they said seeks to create accessible, universal, portable retirement and investment accounts while also modernizing the nation’s retirement system.© Shutterstock Sen. Mark Warner (D-VA) and Rep. Jim Himes (D-CT) said their bill, the Portable Retirement and Investment Account (PRIA) Act of 2021, would bring more people into […]

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A pair of lawmakers have introduced a measure they said seeks to create accessible, universal, portable retirement and investment accounts while also modernizing the nation’s retirement system.

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Sen. Mark Warner (D-VA) and Rep. Jim Himes (D-CT) said their bill, the Portable Retirement and Investment Account (PRIA) Act of 2021, would bring more people into the retirement system and make it easier for Americans to save.

“Americans are more likely to change jobs and be engaged in non-traditional forms of work than they were a generation ago, but our policies haven’t kept up with these shifts,” Warner said. “As more and more Americans hold multiple jobs across a career, a year, and even a day, PRIA will provide more workers with access to flexible, portable benefits such as retirement savings that will carry with them from employer to employer and gig to gig.”

Via the legislation, each American will receive a PRIA when they receive a Social Security Number and the PRIAs will be administered by an independent board — managed by selected financial institutions.

Upon creation of the initial account, account holders are presented the option of choosing investment opportunities from a qualified financial institution, per the measure.

“The current retirement system isn’t working for all Americans,” Himes said. “The options to which American workers have access can differ significantly based on their area of employment and the systems can be needlessly confusing. In addition, many Americans lose access to retirement savings vehicles if they lose their jobs, and gig, contract, and part-time workers are often ineligible. PRIA changes all of this.”

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Sen. Wyden lauds grant allocations for mental health

Senate Finance Committee Ranking Member Ron Wyden (D-OR) said the recent allocation of state Medicaid program planning grants would aid those suffering from mental health and substance use crises.© ShutterstockRon Wyden Officials indicated the allocations to 20 state programs, via the Centers for Medicare & Medicaid Services, are modeled after the Eugene, Oregon-based CAHOOTS initiative, […]

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Senate Finance Committee Ranking Member Ron Wyden (D-OR) said the recent allocation of state Medicaid program planning grants would aid those suffering from mental health and substance use crises.

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Ron Wyden

Officials indicated the allocations to 20 state programs, via the Centers for Medicare & Medicaid Services, are modeled after the Eugene, Oregon-based CAHOOTS initiative, which enables a multi-disciplinary team to respond to mental health crises as a means of stabilizing and de-escalating situations while helping to connect individuals to needed health care services.

“These grants will kick start the effort to help those experiencing a mental health crisis get the services they need and reduce the prospect of an encounter with law enforcement,” Wyden said. “I’m optimistic that communities around the country will be able to implement mobile crisis intervention services with this major investment from Medicaid. Meanwhile, I continue to work to extend this program and truly reimagine public safety in the United States.”

Under the American Rescue Plan, $15 million will be made available to states, officials noted, detailing an opt-in feature would provide a higher federal Medicaid match, based upon the Federal Medical Assistance Percentage of 85 percent for qualifying mobile crisis services.

Authorities said the Congressional Budget Office (CBO) estimates the match would give states $1 billion in additional federal Medicaid dollars for mobile crisis services in the future.

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FDIC creates Mission-Driven Bank Fund to support minority banks, CDFIs

The Federal Deposit Insurance Corp. (FDIC) is launching a new capital investment vehicle, the Mission-Driven Bank Fund, to support insured Minority Depository Institutions (MDIs) and Community Development Financial Institutions (CDFIs). © Shutterstock MDIs and CDFIs are banks, savings banks, and savings associations that provide capital and financial services to minority, lower income, and rural communities. […]

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The Federal Deposit Insurance Corp. (FDIC) is launching a new capital investment vehicle, the Mission-Driven Bank Fund, to support insured Minority Depository Institutions (MDIs) and Community Development Financial Institutions (CDFIs).

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MDIs and CDFIs are banks, savings banks, and savings associations that provide capital and financial services to minority, lower income, and rural communities. The Mission-Driven Bank Fund will channel private capital and other resources to these institutions, allowing them to amplify the impact of investments in the communities they serve.

Microsoft and Truist Financial are anchor investors in the initiative while Discovery, Inc. will join as a founding investor in the fund. The combined initial commitment to the effort is $120 million, with additional investments expected.

“Microsoft and Truist have answered the call to become anchor investors and to assist the FDIC in developing this Fund for the benefit of mission-driven banks and, most importantly, the people and places these institutions serve,” FDIC Chairman Jelena McWilliams said. “It is our hope that with the commitment of these industry leaders, more private equity investors will join the growing ranks of those committed to building opportunity and prosperity where this support is needed the most.”

In designing the fund, the FDIC engaged approximately 70 CEOs of MDIs and CDFIs, as well as potential investors, investment consultants, and philanthropic organizations.

“Supporting mission-driven banks aligns perfectly with Microsoft’s commitments to address racial injustice and inequity,” Anita Mehra, corporate vice president of Global Treasury and Financial Services at Microsoft, said. “The Mission-Driven Bank Fund will enable banks to more effectively manage risk, leverage innovative technology solutions, and directly increase funds to diverse and underrepresented communities,” Mehra said. “We look forward to seeing the continued opportunities this will help provide for mission-driven banks and the communities they serve.”

The fund supports the FDIC’s commitment to preserving and promoting mission-driven banks.

“The partnership with Microsoft and the FDIC, as an anchor investor in the Mission-Driven Bank Fund, is a direct investment in advancing our purpose to inspire and build better lives and communities,” Truist CEO William Rogers Jr, said. “MDIs and CDFIs play crucial roles serving the needs of minority and rural neighborhoods, and Truist has an established history of partnering with these organizations. We’re extending this commitment through an innovative approach to capital investments and we believe this will significantly enhance these institutions’ ability to provide positive outcomes for our communities.”

The FDIC will retain an advisory role to support the fund’s mission focus, but will not manage, fund, or be involved in any investment decisions.

“Our investment in the Mission-Driven Bank Fund advances the goals of RISE, our global commitment to reducing inequality and supporting empowerment, by providing minority and rural communities with much needed access to capital and resources. We are proud to be an initial investor in this fund and hope that by joining forces with other private funders, we can drive real opportunity and make a difference in people’s lives and in the communities we serve,” David Zaslav, president and CEO of Discovery, said.

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SEC charges school district with misleading bond investors

The Securities and Exchange Commission (SEC) has charged a San Diego County-based school district and its former chief financial officer with misleading investors who purchased $28 million in municipal bonds.© Shutterstock The SEC’s complaint alleges Sweetwater Union High School District and the school district’s former CFO, Karen Michel, gave investors misleading budget projections indicating the […]

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The Securities and Exchange Commission (SEC) has charged a San Diego County-based school district and its former chief financial officer with misleading investors who purchased $28 million in municipal bonds.

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The SEC’s complaint alleges Sweetwater Union High School District and the school district’s former CFO, Karen Michel, gave investors misleading budget projections indicating the school district would be able to cover its costs and end the fiscal year with a general fund balance of approximately $19.5 million.

However, the SEC maintains the school district was involved in deficit spending en route to a negative $7.2 million ending fund balance.

Additionally, the SEC indicated the Sweetwater Union High School District, without admitting or denying any findings, agreed to settle with the SEC and consented to the entry of an SEC order finding that it violated two Sections of the Securities Act and would engage an independent consultant to evaluate policies and procedures related to its municipal securities disclosures.

The SEC noted Michel, without admitting or denying the allegations in the agency’s complaint, agreed to settle with the SEC and be enjoined from future violations of the charged provision, as well as from participating in any future municipal securities offerings while agreeing to pay a $28,000 penalty. The settlement is subject to court approval, per authorities.

“As the order finds, Sweetwater and Michel presented stale and misleading financial information as current and accurate,” LeeAnn G. Gaunt, chief of the Division of Enforcement’s Public Finance Abuse Unit, said. “The SEC will continue to address deceptive conduct that prevents municipal bond investors from getting an accurate picture of the financial risks of their investments.”

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Denver awarded SIPPRA grant funds to combat homelessness

The City and County of Denver has been awarded Social Impact Partnership to Pay for Results Act (SIPPRA) Project grant funds to address homelessness and housing insecurity.© Shutterstock Authorities indicated the Department of the Treasury allocation would result in $5,512,000 in SIPPRA Project funds, in addition to a SIPPRA Independent Evaluator grant in the amount […]

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The City and County of Denver has been awarded Social Impact Partnership to Pay for Results Act (SIPPRA) Project grant funds to address homelessness and housing insecurity.

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Authorities indicated the Department of the Treasury allocation would result in $5,512,000 in SIPPRA Project funds, in addition to a SIPPRA Independent Evaluator grant in the amount of $826,800 for the Housing to Health (H2H) program. H2H is a permanent supportive housing program that seeks to reduce homelessness and increase housing stability.

“This investment will allow more Denver residents, who are experiencing homelessness, to receive basic housing and health services, which will make a substantial difference in the lives of these individuals and provide benefits to the whole community,” Secretary of the Treasury Janet L. Yellen said. “Homelessness and housing insecurity are one of the most significant challenges that a person or family can face. The Treasury Department will continue to work with communities across the country as they seek to address this challenge and provide opportunities to those at-risk of being homeless.”

Per officials, SIPPRA provides funding for state and local governments to execute pay-for-results social impact partnership projects targeting varied social issues that include increasing employment; improving family health and housing; and reducing recidivism.

“We’re honored that Denver has been selected as the first city to tackle the complicated issue of homelessness through a Social Impact Partnerships to Pay for Results Act award from the U.S. Treasury Department,” Denver Mayor Michael B. Hancock said. “Through our previous work, we housed more than 250 people experiencing homelessness who were frequently interacting with police, our jails and emergency care, and we proved that when housed and wrapped with services, people encountered the criminal justice system less often and dramatically increased their use of preventative medical care.”

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Lawmaker seeks American Samoa business tax credits

Rep. Uifa’atali Amata (R-American Samoa) is touting the potential benefits of a budget reconciliation bill she said would provide American Samoa businesses with new tax credits.© Shutterstock Amata indicated the legislation would enable deduction of 20 percent of wages and benefits up to $50,000 and 50 percent up to $141,000 for certain qualifying small businesses. […]

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Rep. Uifa’atali Amata (R-American Samoa) is touting the potential benefits of
a budget reconciliation bill she said would provide American Samoa businesses with new tax credits.

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Amata indicated the legislation would enable deduction of 20 percent of wages and benefits up to $50,000 and 50 percent up to $141,000 for certain qualifying small businesses.

“American Samoa will benefit from any extra economic stimulus, including allowing businesses to keep more of their money active here in the local economy,” Amata said. “Businesses will use tax credits for local purchases, equipment, or supplies they need, or adding an employee, but it keeps this money at work in the local economy.”

The proposed tax credit stems from the House Ways and Means Committee, officials noted.

“My focus is seeing that American Samoa is included if this bill goes forward, or if a reduced bill emerges, as I especially support the bill’s inclusion of $120-140 million in hospital funds for American Samoa over ten years,” Amata added, in the wake of some lawmakers expressing the $3.5 trillion measure is too costly in the wake of two years of record federal spending. “I appreciate the attention to fiscal responsibility underway in the Senate and I am communicating American Samoa’s needs with these leaders to be part of any outcome.”

Amata said she would continue focusing on legislation addressing hospital funding, Medicaid extension and road funding.

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NYSE working with IEG to develop new asset class, Natural Asset Companies

The New York Stock Exchange and Intrinsic Exchange Group (IEG) are working together to develop a new class of publicly traded assets called Natural Asset Companies, or NACs. © Shutterstock NACs are sustainable enterprises that hold the rights to ecosystem services produced by natural, working or hybrid lands. Natural assets produce about $125 trillion annually […]

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The New York Stock Exchange and Intrinsic Exchange Group (IEG) are working together to develop a new class of publicly traded assets called Natural Asset Companies, or NACs.

© Shutterstock

NACs are sustainable enterprises that hold the rights to ecosystem services produced by natural, working or hybrid lands. Natural assets produce about $125 trillion annually in ecosystem services, such as carbon sequestration, biodiversity, and clean water. This significant economic output underscores the financial potential of an asset class that is wholly based on environmental investment.

“This new asset class on the NYSE will create a virtuous cycle of investment in nature that will help finance sustainable development for communities, companies and countries,” Douglas Eger, CEO of IEG, said. “Together, IEG and the NYSE will enable investors to access nature’s store of wealth and transform our industrial economy into one that is more equitable.”

IEG has developed an accounting framework, in consultation with former Financial Accounting Standards Board (FASB) Chairman Robert Herz and leading accounting firms, to measure ecological performance to complement GAAP financial statements.

The NYSE will seek SEC approval for unique listing requirements tailored to NACs and incorporating IEG’s accounting methodology. IEG and the NYSE would then begin working with the first NACs to help prepare them for listing and trading as publicly held entities on the NYSE.

“With the introduction of Natural Asset Companies, the NYSE plans to provide investors an innovative mechanism to financially support the sustainability initiatives they deem critical to our future. Our work with Intrinsic Exchange Group is another example of the NYSE tapping into our community to drive meaningful progress on ESG issues with a solutions-based approach,” Stacey Cunningham, president of NYSE Group, said.

IEG is currently advising a number of sovereign nations on the potential creation of NACs. IEG and the Inter-American Development Bank (IDB) are working with the Government of Costa Rica to lay the foundation for NACs that would preserve and grow natural assets throughout the country. In the private sector, IEG anticipates announcing its first partnership later this fall in collaboration with a multinational corporation.

“In addition to GAAP financial statements, we believe it is absolutely critical to provide investors in Natural Asset Companies with relevant, reliable and understandable information on the flows of the ecosystem services they produce and their stocks of natural capital assets,” Herz, the former chairman of FASB, said.

IEG has received initial funding from IDB Lab and IDB, The Rockefeller Foundation, Aberdare Ventures and Entertaining Ideas.

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IRI advocates retirement savings plan measure

Insured Retirement Institute (IRI) officials said the organization supports proposed House Ways and Means Committee legislation that would result in small business workers gaining workplace retirement savings plan access. Per the IRI, the bill would also present employees with the opportunity to choose a protected lifetime income solution within a plan similar in scope to […]

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Insured Retirement Institute (IRI) officials said the organization supports proposed House Ways and Means Committee legislation that would result in small business workers gaining workplace retirement savings plan access.

Per the IRI, the bill would also present employees with the opportunity to choose a protected lifetime income solution within a plan similar in scope to benefits offered by a more traditional pension — adding the proposed legislation is spearheaded by
House Ways and Means Committee Chairman Rep. Richard Neal (D-MA).

“We appreciate Chairman Neal’s steadfast leadership and advocacy of this legislation to help America’s workers, retirees, and their families build economic equity, strengthen financial security, and protect income in a sustainable manner to last throughout retirement years,” IRI President and CEO Wayne Chopus said. “We look forward to working with Chairman Neal and other supporters to enact this important initiative.”

According to the proposed measure, employers with five employees or more would be required to provide or arrange for access to an automatic retirement contribution plan for all full-time and long-term part-time employees.

Additionally, employers would be required to offer employees with at least a $200,000 vested retirement account balance the option to take a distribution of up to 50 percent of savings to purchase a lifetime income solution.

“Policymakers have created numerous incentives, options and mechanisms for employers to offer workplace retirement plans. But too many employees, particularly those who work for small businesses, are still not covered by a plan,” Chopus said. “This puts too many workers in jeopardy of not saving enough for retirement, which can last 20 or 30 years or longer. We need to take additional steps to address the inequitable access to an effective means to accumulate retirement savings and this legislation is a common-sense step to do just that.”

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ICI releases 401(k) activity study findings

A new study from Investment Company Institute (ICI) found that Americans continued to save for retirement through their 401(k) plans despite ongoing COVID-19 pandemic economic stresses.© Shutterstock ICI’s Defined Contribution Plan Participants’ Activities, First Half 2021 breakdown tracks contributions, withdrawals and other 401(k) activity based on defined contribution (DC) plan recordkeeper data addressing over 30 […]

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A new study from Investment Company Institute (ICI) found that Americans continued to save for retirement through their 401(k) plans despite ongoing COVID-19 pandemic economic stresses.

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ICI’s Defined Contribution Plan Participants’ Activities, First Half 2021 breakdown tracks contributions, withdrawals and other 401(k) activity based on defined contribution (DC) plan recordkeeper data addressing over 30 million participant accounts in employer-based DC plans at the end of June 2021.

“Despite the economic challenges over the past year and a half, retirement savers show deep commitment to preserving their retirement nest eggs,” Sarah Holden, ICI senior director of retirement and investor research, said. “The combination of ongoing contributions and few participants taking withdrawals reflects DC plan participants’ long-term mindset and preference to keep this money earmarked for retirement and avoid dipping into it.”

The study found most DC plan participants continued their path regarding asset allocations, with stock values generally rising during the first six months of the year. In addition, it revealed that DC plan withdrawal activity remained low during the first half of the year, similar to activity observed in the first half of 2020. Finally, the study indicated that DC plan participants’ loan activity declined in the second quarter of 2021. At the end of June 2021, 13.5 percent of DC plan participants had loans outstanding, in comparison to 14.3 percent at the end of March 2021.

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