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WASHINGTON – Today, the U.S. Department of the Treasury (Treasury) announced that the Michigan Economic Development Corporation is being awarded $9 million to support small business growth through the Biden-Harris Administration’s State Small Business Credit Initiative (SSBCI) Investing in America Small Business Opportunity Program (SBOP). 

Part of the Biden-Harris Administration’s economic agenda, this $75 million program provides funding to connect underserved and very small businesses to the capital needed to participate in key Investing in America supply chains, including electric vehicle manufacturing, semiconductor manufacturing, construction, transportation, clean energy generation, and more. The SBOP was designed to catalyze additional private sector investment by supporting small business technical assistance services like accounting and legal services.  

“The Biden-Haris Administration’s economic agenda is focused on supporting American automakers and creating new opportunities for small businesses in Michigan to be a part of the supply chain for American-made cars,” said U.S. Deputy Secretary of the Treasury Wally Adeyemo. “With these new resources, Michigan will be able to support small automotive manufacturers and suppliers by providing them with the business and financial services they need to grow and participate in these supply chains. Continuing the Biden-Harris Administration’s historic small business boom is one of our top priorities, and this funding will advance that goal in a key, growing sector of our economy.” 

“Small and mid-sized auto suppliers have served as local economic engines for generations – particularly in historic auto communities in Michigan,” said National Economic Advisor Lael Brainard. “Today’s announcement makes further progress on the Administration’s goal of supporting suppliers to ensure that the future of the auto industry is made in America by American workers.” 

“Small businesses are the backbone of Michigan’s economy and critical to building a brighter future for our residents,” said Lt. Governor Garlin Gilchrist II. “This $9 million award from the Biden-Harris Administration will connect small auto manufacturers with the resources they need to grow their businesses, create good-paying, high-skilled jobs, and bring supply chains home from overseas. Governor Whitmer and I will keep working alongside the Biden-Harris Administration to grow our economy and make Michigan the best place to start and grow a business.” 

“This important investment will help ensure that our small auto suppliers can grow their businesses and continue to play a strong role in our domestic supply chain and the transition to electric vehicles.” said U.S. Senator Debbie Stabenow. “It will help create good-paying jobs and boost our economy.”

“As Michigan automakers continue building the vehicles of the future, it’s critical that the thousands of suppliers and small businesses across our state who support the industry also have the resources they need to be successful,” said U.S. Senator Gary Peters. “This funding will directly help those businesses create and retain jobs, adapt their operations, and continue supporting their local economies. I helped champion the State Small Business Credit Initiative in 2010 and again helped expand the program through the American Rescue Plan because it is a proven success, and I’m pleased it’s continuing to bolster the small business community here in Michigan.” 

“Team Michigan is grateful to receive this grant from the Biden-Harris administration as further proof that our ‘Make It In Michigan’ economic strategy focused on our people, places, and projects of all sizes is aligned with bipartisan federal industry policy,” said Quentin L. Messer, Jr., CEO of the Michigan Economic Development Corporation. “Michigan is home to an incredible skillset of workers up and down the automotive supply chain, and this funding will enhance that standing by affording Michiganders the opportunity to thrive in the industry that our state built. While work remains and we are committed to doing that work, I look forward to seeing the innovation and expansion that will come from these investments.” 

Michigan was selected for the SBOP award through a competitive selection process. The $9.1 million SBOP award will launch the Michigan Auto Supplier Transition Program (MASTP), with services across the state to benefit small businesses in all 83 counties. The program will focus on helping small and underserved automotive manufacturers and aftermarket suppliers secure financing and scale their operations, and will help businesses in the internal combustion engine auto supply chain transition into serving electric vehicle production or an adjacent industry.

These services will be provided through general educational opportunities and in-depth business health assessments, coaching, and subject matter expert advisory. MASTP will also enable the Michigan Strategic Fund to contract with technical assistance providers to offer financial, legal, and accounting services to very small businesses (VSBs) and underserved businesses, prioritizing capital readiness, acquisition support, financial management skills, and geographic coverage.  

The Michigan Strategic Fund, with support from the Michigan Economic Development Corporation and the Michigan Department of Labor and Economic Opportunity, led the effort to create MASTP alongside key partners including the Michigan Minority Supplier Development Council, the University of Michigan Economic Growth Institute, Automation Alley, the Michigan Manufacturing Technology Center, and the Michigan Manufacturers Association. This initiative is supported by $500,000 from the Make It in Michigan Competitiveness Fund, which provides enabling funds, such as match grants, to unlock federally backed investments that will boost the state economy, create good-paying jobs, bring new life to communities, and improve infrastructure while increasing quality of life for Michiganders. 

Selected SBOP jurisdictions will build or expand technical assistance programs focused on connecting very small and underserved businesses to financing available through SSBCI, or other state or federal small business programs, including in the infrastructure, manufacturing, clean energy, or climate resiliency space. Jurisdictions have been selected based on their plans to create innovative, high-impact models of small business technical assistance delivery that demonstrate a vision to improve access to capital for historically overlooked businesses across the nation.  

The American Rescue Plan Act reauthorized and expanded SSBCI, which provides nearly $10 billion to support small businesses and empower them to access the capital needed to invest in job-creating opportunities. SSBCI provides funds to states, the District of Columbia, territories, and Tribal governments to promote American entrepreneurship, support small business ownership, and democratize access to capital across the country, including in underserved communities. Through the SSBCI Capital Program, Treasury has approved plans for small business financing programs totaling over $8.7 billion and representing every state and territory, the District of Columbia, and 280 Tribal governments. 

In addition to today’s announcement, Treasury has announced the approvals of SSBCI Technical Assistance grants allocated by formula to states, the District of Columbia, territories, and Tribal governments, representing $145 million for 48 jurisdictions. Treasury anticipates additional approvals of applications to follow. See the full list of approved programs here.

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WASHINGTON —U.S. Secretary of the Treasury, Janet L. Yellen released the following statement on the Commodity Futures Trading Commission’s (CFTC) final guidance regarding the listing of voluntary carbon credit derivative contracts. 

“I commend Chair Behnam and the CFTC for the release of their final guidance to support high-integrity voluntary carbon markets (VCMs). The CFTC’s guidance will promote the integrity of carbon credits and enable greater liquidity and price transparency. I look forward to continued collaboration with the CFTC and other government agencies involved in shaping the development of responsible, high-functioning, and high-integrity VCMs as part of the Biden-Harris Administration’s ambitious efforts to tackle the climate crisis and accelerate a clean energy transition that benefits all Americans.”

This final guidance comes a few months after the Department of the Treasury and Biden-Harris Administration released the Voluntary Carbon Markets Joint Policy Statement and Principles, which emphasized the importance of credit and market integrity in VCMs.

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WASHINGTON – Today, U.S. Secretary of the Treasury Janet L. Yellen convened a meeting of the Financial Stability Oversight Council (Council) in executive session by videoconference.   

During the meeting, the Council received an update from Treasury staff on key themes in an upcoming staff progress report by the Inter-Agency Working Group on Treasury Market Surveillance. Council members discussed recent and ongoing efforts by Council member agencies to enhance the resilience of the U.S. Treasury market. 

The Council also received an update from the Council’s Climate-related Financial Risk Committee on progress over the last year on the development of risk indicators and narrative analyses to monitor climate-related financial risks. This work advances the recommendations in the Council’s October 2021 Report on Climate-Related Financial Risk, which identified climate-related financial risk as an emerging threat to financial stability. The Council also voted to approve a slate of additional members to its Climate-related Financial Risk Advisory Committee (CFRAC). 

Additionally, the Council heard an update from Treasury staff on the development of the Council’s 2024 annual report. 

The Council also voted to approve its fiscal year 2025 budget and the minutes of its previous meeting on May 10, 2024. The approved budget provides for fiscal year 2025 expenditures of $14,783,781 for the Council secretariat at Treasury and the Council’s independent member with insurance expertise. 

In attendance at the Council meeting by videoconference were the following members: 

• Janet L. Yellen, Secretary of the Treasury (Chairperson of the Council)
• Jerome H. Powell, Chair, Board of Governors of the Federal Reserve System
• Michael J. Hsu, Acting Comptroller of the Currency
• Rohit Chopra, Director, Consumer Financial Protection Bureau
• Amanda Fischer, Chief of Staff, Securities and Exchange Commission (acting pursuant to delegated authority)
• Martin Gruenberg, Chairman, Federal Deposit Insurance Corporation
• Rostin Behnam, Chairman, Commodity Futures Trading Commission
• Sandra L. Thompson, Director, Federal Housing Finance Agency
• Todd M. Harper, Chairman, National Credit Union Administration
• Thomas Workman, Independent Member with Insurance Expertise
• James Martin, Acting Director, Office of Financial Research (non-voting member)
• Steven Seitz, Director, Federal Insurance Office (non-voting member)
• Elizabeth K. Dwyer, Superintendent of Financial Services, Rhode Island Department of Business Regulation (non-voting member)
• Adrienne A. Harris, Superintendent, New York State Department of Financial Services (non-voting member)
• Melanie Lubin, Securities Commissioner, Office of the Attorney General of Maryland, Securities Division (non-voting member)

Additional information regarding the Council, its work, and the recently approved budget, CFRAC membership, and meeting minutes is available at http://www.fsoc.gov.  

WAIKŌLOA VILLAGE–HAWAI’I – This week, U.S. Treasurer Chief Lynn Malerba and the U.S. Department of the Treasury’s Office of Tribal and Native Affairs concluded a visit to Native Hawaiian communities, including Hawaiian Home Lands. Hawaiian Home Lands are trust lands set aside by the U.S. Congress through the passage of the Hawaiian Homes Commission Act of 1920. The Hawaiian Homes Commission exists to administer the Act, through the Department of Hawaiian Homelands (DHHL), to provide for the economic advancement of native Hawaiians.  

Treasurer Chief Lynn Malerba began her visits on Wednesday by joining DHHL Director Kali Watson and senior staff on a tour of Hawaiian Home Lands in the Villages of La‘i‘Opua and the future site of Palamanui. The Villages of La‘i‘Opua and many DHHL projects are funded with Treasury’s Low-Income Housing Tax Credit (LIHTC) Projects. During the visit, DHHL highlighted the importance of LIHTC for improving housing security for Native Hawaiians who experience disproportionately high poverty rates and overcrowded housing conditions.   

The Treasurer then attended a roundtable with the Sovereign Council of Hawaiian Homestead Associations (SCHHA) and Homestead Beneficiary Associations (HBAs) to discuss economic priorities important to Native Hawaiians and the value of Native Community Development Financial Institutions (CDFIs), such as Hawai’i Community Lending which is assisting Native Hawaiian Lahaina fire victims in accessing housing resources.  

On Thursday, the Treasurer provided keynote remarks at the 2024 Native Hawaiian Convention, hosted by the Council for Native Hawaiian Advancement, a Native CDFI. The Treasurer shared how Treasury is growing its understanding of Native economies to support increased access to Treasury’s community and economic development funding by Native Hawaiian entities from COVID-19 pandemic recovery funding to the CDFI Fund’s Native American CDFI Assistance Program. The Treasurer also highlighted the American Women Quarters 2023 program which features Edith Kanaka’ole, a celebrated leader for revitalization of Native Hawaiian culture and language.   

Later in the day, the Treasurer visited Waimea Nui, an HBA, with SCHHA to learn how Native Hawaiian homesteaders are using Hawaiian traditions to build a sustainable agricultural economy. 

Today, Treasurer Chief Malerba ended her visit by meeting with two Native Hawaiian businesses—Wai Meli Artisanal Raw Honey and C&C Tropicals—both of which received State Small Business Credit Initiative (SSBCI) credit support through the State of Hawaii’s SSBCI allocation of $62 million. SSBCI is a $10 billion-dollar program meant to support small businesses and entrepreneurship in communities across the United States by providing capital and technical assistance to promote small business stability and growth.  

In response to input from Tribes and the Native Hawaiian community, the Biden-Harris Administration created Treasury’s first Office of Tribal and Native Affairs under the first Native American Treasurer Chief Malerba. Under Treasury Secretary Janet L. Yellen’s leadership, the Department has significantly increased its engagement with Tribal Nations and Native entities to improve its understanding of Native economies to better understand and respond to the needs of Indigenous communities.   

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MEXICO CITY – On September 19, Assistant Secretary for International Finance Brent Neiman visited Mexico City, Mexico and met with senior officials from private and public institutions. Following up on Secretary Yellen’s trip to Mexico City in December 2023 and other bilateral conversations since, Assistant Secretary Neiman’s visit focused on concrete steps both sides can take to improve connectivity between respective payments systems.  His meetings also discussed other key aspects of the U.S.-Mexico economic relationship, and emphasized the importance of continued cooperation with Mexico’s new government.

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BEIJING – The United States and the People’s Republic of China held the fifth meeting of the Economic Working Group (EWG) on September 19-20 in Beijing.  This was the second EWG held in China. 

Over two days of meetings, senior officials from the U.S. Department of the Treasury and China’s Ministry of Finance convened for a set of productive discussions and were joined by participants from other agencies.  The two sides opened the discussions by exchanging views on policies that support balanced growth in the domestic and global economies.  U.S. officials also continued discussions related to issues of concerns raised during Secretary Janet L. Yellen’s visit to China in April, including signs of increasing overcapacity in certain sectors of the Chinese economy, China’s non-market policies and practices and their impact on U.S. workers and firms, as well as Chinese firms’ support for Russia’s war in Ukraine.  The meeting sessions concluded with the two sides sharing views on domestic macroeconomic outlooks and discussions on areas of cooperation, including debt issues and financing challenges in emerging and developing economies.

While in Beijing, the Treasury delegation also met with Vice Premier He Lifeng, where they emphasized that Secretary Janet L. Yellen is pleased with the role the EWG plays in maintaining stability in the bilateral economic relationship by providing a resilient channel of communications on both areas of concern and areas for further cooperation.

The EWG is one of two working groups formed by Secretary Yellen and Vice Premier He Lifeng of the People’s Republic of China last September. The EWG is co-led by Jay Shambaugh, Under Secretary for International Affairs at the U.S. Treasury, and Liao Min, Vice Minister of Finance at China’s Ministry of Finance. The EWG reports directly to Secretary Yellen and Vice Premier He. 

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As Prepared for Delivery

Thank you. I am very glad to join you to mark the 30th anniversary of the Community Development Financial Institutions Fund with this Community Development Advisory Board meeting.  

Let me start by thanking my fellow government representatives for serving alongside me and the private citizens appointed to serve with us—both those who have been serving and the four new members joining us today. Your expertise and commitment are critical to strengthening the CDFI Fund’s work.  

Three decades ago, President Clinton worked to establish the CDFI Fund with bipartisan support from Congress to advance the goal of promoting economic revitalization and community development. Since then, the CDFI Fund has awarded more than $7 billion to CDFIs and mission-driven lenders and $76 billion in tax credits to community development entities. By one analysis, every dollar the CDFI Fund invests catalyzes at least eight more dollars in private-sector investment, magnifying its impact. And the CDFI Fund also provides much-needed technical assistance, like guidance for CDFIs on how to reach populations that have been underserved. 

Put simply, the CDFI Fund has done important work for decades. But I’d like to focus today on how central it has been to our Administration’s work to drive a historic economic recovery and to move forward our medium- and long-term economic agenda. 

We came into office in the depths of the COVID-19 pandemic. Thousands of Americans were dying each day. Thousands were filing jobless claims each week. Households across the country faced the threat of eviction or foreclosure. CDFIs were a crucial part of our response. We invested $9 billion under the Emergency Capital Investment Program and $3 billion under the Rapid Response Program and Equitable Recovery Program. These funds equipped CDFIs to support American households and businesses at a crucial moment, helping tackle the economic impacts of the COVID-19 pandemic, from closures of health care facilities to increased housing instability.  

As we recovered, the CDFI Fund continued to be key to our Administration’s economic agenda. We’re focused on investing in people and places that have been underserved—both to advance fairness and because supporting those who have been underserved helps strengthen our economy as a whole. We structured the Emergency Capital Investment Program to incentivize “deep impact lending” to reach underserved communities facing the greatest barriers.  And the CDFI Fund is also at the heart of our agenda to increase the supply of housing and lower housing costs. In June, I announced that the CDFI Fund will provide an additional $100 million over the next three years to increase the supply of affordable housing. The CDFI Fund is also providing funding and guidance to CDFIs to counter the threat of cyber-attacks. These challenges won’t be solved overnight. But under this Administration, CDFI Fund support is helping fuel significant progress. 

As we look back over the last 30 years, it is remarkable how significant a role the CDFI Fund has played in fueling economic development in countless communities across the United States. And I’m proud of what we’ve done to support and expand its work under this Administration. 

Thank you again to all those who have contributed to this progress. I’m glad that we can mark this occasion here at Treasury, and I look forward to the work ahead. 

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DPRK and Russian Financial Entities Orchestrated Illicit Payment Mechanisms

WASHINGTON — Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated a network of five entities and one individual—based in Russia and in the Russia-occupied Georgian region of South Ossetia—that have enabled and supported ongoing efforts to establish illicit payment mechanisms between Russia and the Democratic People’s Republic of Korea (DPRK). Today’s action holds accountable parties that have assisted DPRK and Russian sanctions evasion and demonstrates Treasury’s commitment to exposing and disrupting networks that facilitate the funding of the DPRK’s unlawful weapons of mass destruction (WMD) and ballistic missile programs and support Russia’s illegal war against Ukraine.

With mounting losses on the battlefield and deepening international isolation, Russia has become increasingly dependent on the DPRK for weapons procurement and economic cooperation. Today’s sanctions demonstrate the Putin regime’s use of illicit financial schemes to enable the DPRK to access the international banking system in violation of targeted financial sanctions required under United Nations Security Council resolution (UNSCR) 1718 and a ban on correspondent relationships with DPRK banks under UNSCR 2270. 

“Today’s action underscores our significant concern with efforts by Russia and the DPRK to deepen financial cooperation, in violation of UN Security Council resolutions,” said Acting Under Secretary of the Treasury for Terrorism and Financial Intelligence Bradley T. Smith. “The United States remains strongly committed to leveraging all our available tools to disrupt this and other schemes intended to support Russia’s war of aggression against Ukraine and enable the DPRK’s illicit access to the international financial system.”

This action targets illicit financial schemes orchestrated by two DPRK state-run organizations, Foreign Trade Bank (FTB) and Korea Kwangson Banking Corporation (KKBC), both of which are designated entities on the 1718 Sanctions List. FTB is a twice U.S.-designated financial institution that serves as the DPRK’s primary foreign currency exchange bank and is vital to the illicit financial networks the DPRK uses to finance its WMD and ballistic missile programs. FTB was designated in 2013for enabling transactions related to the DPRK’s WMD proliferation networks and was subsequently re-designated in 2017 after being identified as part of the Government of the DPRK. KKBC was previously designated in August 2009, pursuant to Executive Order (E.O.) 13382 for providing financial services in support of multiple organizations that were identified as WMD proliferators. FTB and KKBC have continued to expand the DPRK’s access to illicit financial networks with the assistance of the Russian Federation. 

EXPANDING Russia-DPRK FINANCIAL COORDINATION

In a scheme orchestrated by the Central Bank of Russia, MRB Bank (MRB), based in Georgia’s South Ossetia region, acted as a cut-out for a designated Russian bank, TSMRBank, OOO (TSMRBank), to establish a secret banking relationship with the FTB. TSMRBank vice president Dmitry Yuryevich Nikulin (Nikulin) facilitated cash deposits from FTB through TSMRBank to MRB. Nikulin organized the opening of correspondent accounts for FTB and KKBC at MRB and coordinated with DPRK representatives to ensure the delivery of millions of dollars and rubles in banknotes to FTB and KKBC accounts at MRB. At least some of the DPRK accounts at MRB were used to pay for fuel exports from Russia to the DPRK.   

As a part of a separate scheme in late 2023, the U.S.-designated Russian Financial Corporation Bank JSC (RFC), worked with FTB to establish a Moscow-based company, Stroytreyd LLC (Stroytreyd), to receive frozen DPRK funds held in defunct Russian banks. As a part of this effort to repatriate frozen assets to the DPRK, RFC-owned Timer Bank, AO (Timer Bank) transferred funds worth millions of dollars to Stroytreyd that were for the ultimate benefit of FTB. DPRK government officials worked with the RFC to increase high-level economic exchanges between the DPRK and Russia and to enhance financial collaboration between the two countries. FTB has also worked with RFC toward opening accounts for other DPRK banks, including U.S.-designated, DPRK-based Agricultural Development Bank.

OFAC is designating MRB, RFC, Stroytreyd and TSMRBank pursuant to E.O. 13722 for having attempted to materially assist, sponsor, or provide financial, material, or technological support for, or goods or services to or in support of, the Government of North Korea and pursuant to E.O. 14024, as amended, for operating or having operated in the financial services sector of the Russian Federation economy. 

OFAC is designating Timer Bank pursuant to both E.O. 13722 and E.O. 14024, as amended, for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, RFC. 

OFAC is designating Nikulin pursuant to E.O. 13722 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the Government of North Korea and pursuant to E.O. 14024, as amended, for being or having been a leader, official, senior executive officer, or member of the board of directors of TSMRBank.

Today, OFAC is also publishing updated identifiers for the DPRK’s KKBC, including DPRK Border Trade Settlement Bank, Border Trade Settlement Bank, and BTSB. KKBC uses these aliases to operate in Russia.  

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of the designated persons described above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked. Unless authorized by a general or specific license issued by OFAC, or exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons. 

In addition, financial institutions and other persons that engage in certain transactions or activities with the sanctioned entities and individuals may expose themselves to sanctions or be subject to an enforcement action. The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any designated person, or the receipt of any contribution or provision of funds, goods, or services from any such person. 

Non-U.S. persons are also prohibited from causing or conspiring to cause U.S. persons to violate U.S. sanctions, wittingly or unwittingly, as well as engage in conduct that evades U.S. sanctions. OFAC’s Economic Sanctions Enforcement Guidelines provide more information regarding OFAC’s enforcement of U.S. sanctions, including the factors that OFAC generally considers when determining an appropriate response to an apparent violation.

The power and integrity of OFAC sanctions derive not only from OFAC’s ability to designate and add persons to the SDN List, but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior. F or information concerning the process for seeking removal from an OFAC list, including the SDN List, please refer to OFAC’s Frequently Asked Question 897 here. For detailed information on the process to submit a request for removal from an OFAC sanctions list, please click here.

Click here for more information on the individuals and entities designated today.

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