Senator Toomey Asks GAO to Review Funding Initiatives of Community Development Financial Institutions

Sen. Pat Toomey (R-PA) has asked the Government Accountability Office (GAO) to review community development financial institution (CDFI) funding initiatives.

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Officials said the request revolves around a recent hearing by the Banking, Housing and Urban Affairs Subcommittee on Financial Institutions and Consumer Protection exploring the role CDFIs and minority deposit-taking institutions play. (MDI) in supporting communities.

“Given the unprecedented amounts of taxpayer resources that Congress has directed to the Treasury, CDFIs, and MDIs for pandemic response, it’s critical that policymakers know how effective these programs have been in helping to revitalize distressed areas and close gaps in access to credit for small businesses, as the program was originally intended to do,” Toomey wrote in the GAO request to U.S. Comptroller General Gene L. Dodaro.

Toomey said Congress provided $12 billion in taxpayer dollars to benefit CDFIs and Minority Depository Institutions (MDIs) last year, which was more than 40 times the size of any annual appropriation prior to the CDFI funds.

Toomey asked the GAO to review how the Treasury Department allocated funding, how funding was used, and to define the mechanisms in place to assess the effectiveness of funding.

Witnesses at the scheduled hearing were Carver Financial Corporation Chairman and National Bankers Association Chief Executive Officer Robert James II; Jeanne Kucey, President and CEO of JetStream Federal Credit Union, on behalf of the National Association of Federally-Insured Credit Unions; and Joel Griffith, Heritage Foundation Research Fellow, Financial Regulation.

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