Markets Wired

As Prepared for Delivery 

Good afternoon, it is great to be here with you today, and I am pleased that all of you were able to join us.  For those who do not know me, I am Brad Smith, the U.S. Treasury’s Acting Under Secretary for Terrorism and Financial Intelligence.  My predecessor, Brian Nelson, attended the Pacific Banking Forum in Brisbane in early July.  The offices I lead deploy the United States’ financial intelligence, regulatory, enforcement, and accountability tools to combat terrorist financing, money laundering, and other urgent illicit finance threats.  This work is critical to safeguarding the U.S. and international financial systems from those who misuse it and undermine U.S. national security.  It is one of the Treasury Department’s core missions, along with advancing a strong economy that promotes growth, fairness, and opportunity for all.

I am joining you here today to discuss how these two missions intersect, and how we can collectively take steps to safeguard our financial systems while also promoting greater financial inclusion.  Before I begin, I want to thank all of you for the hard work your governments and teams have dedicated to this important effort and making time to be here during a busy week. I would especially like to thank our Australian counterparts for co-hosting this event with us. They have been an excellent partner in this endeavor, and I really appreciate all their efforts.

As you all know, financial inclusion is a critical driver of economic development, stability, and opportunity.  A big piece of promoting financial inclusion is access to correspondent banking.  Correspondent banking bolsters international trade by reducing financial friction and allowing for quick and lower-cost transactions across borders.  At the macro-level, correspondent banking facilitates large-scale foreign investment, including financing for infrastructure and development projects, while also helping countries make their financial systems more resilient.  And at the micro-level, correspondent banking helps individuals more easily and affordably send funds—including remittances—across borders.  Yet in recent years, we have seen the Pacific region experience the fastest withdrawal of correspondent banking relationships in the world.  Limited profitability, higher costs, lack of scale, and uneven anti-money laundering and countering the financing of terrorism (AML/CFT) effectiveness have been identified as critical drivers of de-risking in the region.

The United States is committed to an Indo-Pacific that is free and open, connected, prosperous, secure, and resilient.  A key part of achieving those goals is making sure people and businesses in the region have access to the global financial system.  This is why President Biden and Prime Minister Albanese committed to working with Pacific Island countries and why the Pacific Banking Forum was created: to convene public and private partners, to understand the critical issues, and to support engagement between governments and correspondent banks.  I want to commend the important pledges that PBF participants made in July to advance their work to address the decline of correspondent banking relationships in the region.

Since the Brisbane meetings, delegates from the PBF have continued to explore solutions to address the decline in correspondent banking relationships, including visits to the region, conversations with local Pacific banks, and engagements with development partners to coordinate efforts.  It is important that we are all reconvening.  We should use this opportunity to reaffirm the commitments we made in July and provide updates on our efforts since then.  Having the Pacific Islands representatives here allows us to hear a regional perspective on current developments with regards to correspondent banking and financial inclusion.  Having the financial institutions and regulators participate is essential for us to better understand the challenges and opportunities in restoring and expanding financial inclusion the region.  Donors and IFI participation are critical to help deliver solutions.  One of the potential solutions is being developed by the World Bank, which has recently launched a project to provide an emergency backstop for CBR services and to explore long-term solutions to de-risking.  We strongly support these efforts.  Later on, we will hear an update from the World Bank on this project.  I would like to specifically thank them for participating and agreeing to share with us their progress on this important effort.

For our part, I’m proud to note that President Biden recently announced that the U.S. intends to contribute $1.5 million to the World Bank’s efforts to strengthen correspondent banking in the region, and I am pleased to hear that other countries including Australia and New Zealand will also make similar contributions.  At Treasury, we will continue our work with partners in this vital region.  We have worked with the Asia Pacific Group on Money Laundering on technical assistance missions.  Treasury also continues to work within the U.S. government to find technical assistance opportunities in the region.  We have also engaged with U.S. banks and regulators to further the discussion on how better to support the growth of correspondent banking in the Pacific. 

And we continue to work on making our own AML/CFT regulatory and supervisory regime more effective and risk-based, and to deliver on our de-risking strategy—including through ongoing FinCEN rulemaking that revises financial institutions’ AML/CFT program requirements.  This rulemaking effort will help ensure that financial institutions do not take a “one-size-fits-all” approach to customer risk.  As our de-risking strategy highlights, collaboration and collective action among public and private stakeholders remains the most effective path to prevent the categorical termination of banking relationships.  Today is an opportunity to do just that.  Your experience and insights will help inform our next steps on this important issue, and we look forward to the conversation today.  Thank you. 

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As Prepared for Delivery 

Minister Armand, it is a pleasure to meet with you as you begin your role as France’s Minister of Economy and Finance. 

I look forward to continuing the deep and longstanding cooperation between the United States. and France, including advancing our joint work on shared international economic priorities. That begins with our steadfast commitment to support Ukraine in its fight against Russia. We are committed to working together to unlock the value of immobilized Russian sovereign assets to help secure economic and security assistance for Ukraine. This will build on the financial support that both of our countries have provided to Ukraine.

We also continue to coordinate on strengthening our sanctions against Russia to limit its revenues and disrupt its ability to get the critical goods it needs, including through third countries like China. And we hope to continue to collaborate with allies, including France, to raise concerns about the risk to countries and businesses of negative spillovers from China’s macroeconomic imbalances, which are leading to overcapacity in key industrial sectors.

We also look forward to building on our close cooperation to continue reforming the international financial institutions so that they more effectively meet the needs of emerging markets and developing countries, making the world more prosperous and stable for all of us.

I look forward to discussing these and other priorities in my meeting with Minister Armand today.

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WASHINGTON – Yesterday, Secretary of the Treasury Janet L. Yellen met with Finance Minister of Japan Katsunobu Kato on the margins of the 2024 Annual Meetings of the International Monetary Fund and the World Bank. Secretary Yellen congratulated Minister Kato on his appointment and affirmed the importance of the United States’ partnership with Japan on addressing global challenges. She underscored the close relationship between the United States and Japan as one of our strongest allies and largest trading partners. In particular, the Secretary highlighted Treasury’s cooperation with Japan on further strengthening the international financial institutions and combating Russia’s illegal war against Ukraine.

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WASHINGTON – Today, Secretary of the Treasury Janet L. Yellen met with United Kingdom Chancellor of the Exchequer Rachel Reeves on the margins of the 2024 Annual Meetings of the International Monetary Fund and the World Bank.  Secretary Yellen condemned the actions of Russia and discussed the Extraordinary Revenue Acceleration (ERA) Loans initiative to Ukraine, and collaboration on the international financial institutions. Secretary Yellen also raised the importance of promoting economic stability in the West Bank, including by maintaining correspondent banking relationships between Palestinian and Israeli banks. Both Secretary Yellen and Chancellor Reeves shared significant concerns that severing these banking ties would lead to instability and would harm Israel’s security. Both expressed that the Israeli indemnification for these banking relationships should be extended as soon as possible for a year.

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Advanced Manufacturing Production Credit has contributed to more than $126 billion in clean energy manufacturing investment announced over last two years.

WASHINGTON – Today, the U.S. Department of the Treasury and the IRS released final rules for the Advanced Manufacturing Production Credit (Section 45X of the Internal Revenue Code), to spur continued growth of U.S. clean energy manufacturing as part of President Biden and Vice President Harris’ Investing in America Agenda.

The Advanced Manufacturing Production Credit helps to level the playing field for U.S. companies to onshore production of critical clean energy technologies like solar and wind components, batteries and energy storage, and critical minerals. The final rules announced today will expand America’s clean energy manufacturing base, create good-paying jobs, strengthen the nation’s energy security, and build the reliable and responsible supply chains needed to meet U.S. climate goals. In particular, the final rules will accelerate the buildout of domestic critical mineral supply chains by allowing taxpayers to include materials costs and extraction costs in production costs for applicable critical minerals and electrode active materials, provided certain conditions are met. This change, based on feedback from stakeholders, will enable further investment in responsible U.S. critical minerals extraction and processing and strengthen U.S. energy security and clean energy supply chains.

“The Biden-Harris Administration’s economic agenda is driving a manufacturing boom across the country that I’ve seen first-hand in North Carolina, Kentucky, and Georgia. These investments are creating good-paying jobs, strengthening U.S. supply chains, and lowering costs for American consumers and businesses,” said U.S. Secretary of the Treasury Janet L. Yellen. “The final rules announced today will help companies continue to invest and innovate in the United States as we buildout our clean energy economy.” 

“The Biden-Harris’s Investing in America agenda is creating game-changing opportunities that will transform our energy economy, promote energy security and ensure America is globally competitive in the 21st century,” said U.S. Secretary of Energy Jennifer Granholm. “These final rules will help strengthen energy dominance while reducing emissions and leveling the playing field for U.S. companies to onshore production of critical clean energy technologies – mitigating our competitors’ market manipulation.”

“The Inflation Reduction Act takes a government-enabled, but private sector-led approach to building America’s clean energy economy,” said John Podesta, Senior Advisor to the President for International Climate Policy. “Today’s final rules will keep fueling America’s clean energy boom, which has already seen nearly $450 billion in new announced investments from the private sector since President Biden and Vice President Harris took office.”

“As part of the resurgence in American manufacturing supported by the Biden-Harris Administration, today’s advanced manufacturing tax credit final rule will catalyze business investment in the clean energy technologies of the future, help secure domestic critical minerals supply chains, and put American workers and businesses in a position to outcompete China,” said National Economic Advisor, Lael Brainard.

“For too long, technologies invented in America were manufactured somewhere else. Not anymore. President Biden and Vice President Harris are finally bringing that manufacturing home,” said White House National Climate Advisor Ali Zaidi. “We are flexing America’s industrial muscle. On factory floors across the country, American workers are now making the technologies of the future. These Biden-Harris tax credits are knocking down barriers to economic opportunity and lifting up union workers. We are revitalizing American manufacturing and rebuilding America’s middle class. This is how we tackle the climate crisis, bolster energy and mineral security, and win the future.”

Since President Biden signed the Inflation Reduction Act more than two years ago, the Advanced Manufacturing Production Credit has been a major driver of the boom in clean energy manufacturing with more than $126 billion in private sector announcements made since the law passed – including around $77 billion for batteries, $6 billion for critical minerals, $19 billion for solar, and $8 billion for wind – according to recent data from the Rhodium Group/MIT’s Clean Investment Monitor (CIM).

Today’s final rules will give taxpayers additional clarity and certainty to drive even more investment in clean energy and critical minerals. Because the Advanced Manufacturing Production Credit is eligible for the Inflation Reduction Act’s novel monetization provisions to help ensure businesses receive the full value of the incentives – elective pay and transferability – the tax credit is particularly powerful for start-up companies that have low tax liability.

The final rules announced today are largely in line with proposed regulations released in December 2023. The final rules clarify definitions and confirm credit amounts for eligible components, including solar energy components, wind energy components, inverters, qualifying battery components, and applicable critical minerals; define key terms to incentivize production in the United States and clarify the circumstances under which taxpayers can claim the credit; and finalize important safeguards to prevent potential fraud, waste, or abuse – including safeguards against duplicative crediting of the same component, crediting of activities that are not value-added, or extraordinary circumstances in which components are produced but not put to productive use.

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WASHINGTON — Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Mirghani Idris Suleiman (Idris)pursuant to Executive Order (E.O.) 14098, for leading the Sudanese Armed Forces’ (SAF) efforts to acquire weapons for use in its ongoing war with the Rapid Support Forces (RSF). Idris has been at the center of weapons deals that have fueled the brutality and scale of the war, serving as Director General of Defense Industries System (DIS), the SAF’s primary weapons production and procurement arm. OFAC designated DIS on June 1, 2023, for being responsible for, or complicit in, or having directly or indirectly engaged or attempted to engage in actions or policies that threaten the peace, security, or stability of Sudan.

Since the beginning of the war, the SAF has prioritized weapons acquisition, including Iranian drones and a port-for-weapons deal with Russia, choosing to expand the conflict rather than end it through good-faith negotiations. The weapons and diplomatic support provided by Iran and Russia have emboldened the SAF and lessened their interest in deescalating the conflict. 

“Today’s action underscores the essential role that key individuals like Mirghani Idris Suleiman have played in procuring weapons, perpetuating violence, and prolonging the fighting in Sudan,” said Acting Under Secretary of the Treasury for Terrorism and Financial Intelligence Bradley T. Smith. “The United States is committed to disrupting the ability of both sides in this conflict to procure weapons and external financing that undermine the possibility of a peaceful resolution.”

saf procurement leader

Mirghani Idris Suleiman is the head of OFAC-sanctioned DIS, the arm of the SAF primarily responsible for weapons procurement and production. Idris began his career in the officer corps of the SAF, graduating alongside SAF Commander Burhan in the 31st graduating batch. He then served in Sudan’s intelligence service before being appointed to lead the DIS. Since his appointment, Idris has served as the face of SAF procurement, heading several official delegations to potential suppliers. 

Idris is being designated pursuant to E.O. 14098, for being a foreign person who is or has been a leader, official, senior executive officer, or member of the board of directors of the DIS, a person whose property and interests in property are blocked pursuant to E.O. 14098.

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. 

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. For 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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WASHINGTON – Today, Secretary of the Treasury Janet L. Yellen met with Finance Minister Mohammed Al-Jadaan of Saudi Arabia. Secretary Yellen reaffirmed Treasury’s long-standing and close partnership with Saudi Arabia and discussed with the Minister the outlook for Saudi Arabia’s economy and its reform and development plans. The Minister and Secretary Yellen committed to continue working together in both bilateral and multilateral settings and on combating the financing of terrorism and money laundering.

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WASHINGTON – The U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) today awarded 48 organizations $246.4 million for the development of affordable housing and community facilities serving low-income, families and communities that need additional investment. These awards were made through the fiscal year (FY) 2024 round of the Capital Magnet Fund (CMF). The awards will support financing for the preservation, rehabilitation, development, or purchase of affordable housing, as well as related economic development facilities, including day care centers, workforce development centers, and health care clinics.

“Today’s awards will increase affordable housing supply and expand access to child care and health care for families across America,” said Secretary of the Treasury Janet L. Yellen. “These awards are projected to leverage nearly $9 billion in private and public sector resources to spur development in communities that need additional investment to create opportunities for communities to get ahead.” 

Award recipients are required to leverage their awards with other private and public investment by at least 10 to one, today’s awardees anticipate that they will leverage more than $6.8 billion in private investment. 

The 48 awardees will collectively serve 50 states, the District of Columbia, Guam, and Puerto Rico. In all, 25 awardees (52% of the total awardees) plan to invest a portion of their award dollars in rural areas, with 12 of those organizations planning to invest at least one-fourth of their award dollars in rural areas. Of the total awardees, 25 are Community Development Financial Institutions (CDFIs) and 23 are nonprofit housing organizations. The awardees were selected pursuant to a competitive review of Applications submitted from 136 organizations that requested more than $1.06 billion from the FY 2024 Capital Magnet Fund round.

This announcement will result in more than 26,400 affordable housing units, including more than 25,600 rental units and more than 750 homeownership units. Since its establishment by the Housing and Economic Recovery Act of 2008, the Capital Magnet Fund has created over 63,000 affordable homes, including more than 55,600 rental housing units and 7,400 homeowner-occupied units.

Since its creation in 1994, the CDFI Fund has awarded more than $8 billion to CDFIs, community development organizations, and financial institutions through: the Bank Enterprise Award Program; the Capital Magnet Fund; the CDFI Rapid Response Program; the Community Development Financial Institutions Program, including the Healthy Food Financing Initiative; the Economic Mobility Corps; the Financial Education and Counseling Pilot Program; the Native American CDFI Assistance Program; and CDFI Equitable Recovery Program. In addition, the CDFI Fund has allocated $81 billion in tax credit allocation authority to Community Development Entities through the New Markets Tax Credit Program, and guaranteed bonds for nearly $3 billion through the CDFI Bond Guarantee Program.   

See the FY 2024 Capital Magnet Fund Award book and list of recipients here.

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As Prepared for Delivery 

Since the moment that Russia invaded Ukraine, the United States has worked with our partners and allies around the world to stand strong against Putin’s aggression. As Russia continues its brutal and unjust war, mortgaging its future and economy to move to a permanent war footing, Putin is engaged in a contest of wills with our coalition, and he is counting on us to retreat. Today, alongside my Ukrainian friend and colleague, Minister Marchenko, I want to be clear that we will not retreat, and that we will do everything we can to support Ukraine.

In a decisive sign of that resolve and our solidarity with Ukraine, I am very glad to announce another step forward. The G7 is committed to making $50 billion in lending available to Ukraine by the end of this year. And the United States will join the G7 to provide a $20 billion loan to Ukraine that will be repaid by proceeds derived from Russia’s own assets. This means that as we look ahead, Russia will increasingly be forced to bear the costs of its illegal war, instead of taxpayers in the U.S. and Europe. 

To mark our intention to enter into this loan, and to demonstrate our commitment that profits earned on Russia’s immobilized assets, not new U.S. or Ukrainian tax dollars, will be the source of repayment, Minister Marchenko and I are here today to sign a joint statement. I am glad that we are also joined by Deputy Administrator of USAID Michele Sumilas, as USAID helped make this step possible and will be critical to implementation. 

Supporting Ukraine is important in its own right: to equip a sovereign, democratic country with the tools it needs to protect its people from unspeakable brutality, and its economy from devastation. We are fulfilling a moral obligation. But let me be clear: Supporting Ukraine is also vital for the national interest of the United States. Letting Ukraine fall would invite further aggression by Putin and jeopardize the safety of our NATO allies in Europe, who we are committed by treaty to defend. Supporting Ukraine also sends a broader unmistakable message: wars of choice launched by autocrats across the world will be met with a swift and united response. And supporting Ukraine is essential to upholding the rules-based international order that has supported peace and prosperity for America and the world since the end of World War II. 

For all these reasons, we continue to provide Ukraine with weapons and financial support to sustain its brave resistance. We imposed, and continue to expand and enforce, a historic sanctions regime to deprive Russia of the funds and goods it needs to prosecute its war of choice. We put in place a novel price cap on Russian oil that restricted Russia’s revenues while keeping global energy markets well-supplied. We also immobilized approximately $280 billion of Russia’s sovereign assets held in financial institutions across G7 countries and agreed that they would remain immobilized until Russia pays for the damage it has caused.

In June, President Biden and G7 Leaders proposed a creative solution: a loan that would equip Ukraine with the near-term resources to defend itself and rebuild, repaid by capturing windfall proceeds earned on Russia’s immobilized assets. 

This loan initiative will provide Ukraine with urgently needed funds and will make funds available by the end of this year. It will send a message to Putin that waiting out our coalition is a losing strategy. And it will advance our collective security and the values that have supported our global economy and financial system for nearly a century. 

Let me congratulate my G7 counterparts on the progress we’ve made. The United States will continue to move forward to make good on our commitments and show Putin that we will not back down.

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As Prepared for Delivery

Good morning, everyone. It is an honor to be here today, and I want to thank the Opportunity Finance Network (OFN) for the invitation and Harold Pettigrew and Donna Gambrell for their leadership and partnership over the years. 

I am delighted to be here on behalf of the U.S. Department of the Treasury (Treasury) with leaders from so many community development financial institutions (CDFIs) across the country as we celebrate two great achievements: the 30th anniversary of the establishment of the CDFI Fund and the 40th anniversary of OFN.

Today we honor not just three decades of accomplishments, but also the transformative impact you have made in communities across our nation. Your steadfast commitment to mission-driven capital has uplifted countless individuals and businesses, fostering resilience and growth in areas that would have otherwise gone underserved. 

Over the past 30 years, your ranks have grown tremendously, with now 1,500 CDFIs nationwide, collectively holding about $452 billion in assets. You are the lifeline to people and places that have long been overlooked, underestimated, and cut off from economic opportunity – not because they lack the talent, determination, or ideas but because they do not fit traditional risk models or live in banking deserts. But we know different. CDFIs are built to challenge traditional financing models. In doing so, you fuel homeownership, scale businesses, expand access to childcare, shelter, and health services. Every day you are showing us that when we invest in those most marginalized in our economy, we create greater prosperity for everyone. 

Frankly, your birthday is right on time. CDFIs are reaching a point of maturity at a critical time when your capacity and reach are more important than ever.

Meeting the Economic Moment

The American Rescue Plan, the Inflation Reduction Act (IRA), the Bipartisan Infrastructure Law, and the CHIPS and Science Act—are ushering in a major economic transition that has the potential to reduce longstanding wealth and wage disparities – but only if we act swiftly and work together. 

Treasury has played a major role in deploying a trillion dollars via the American Rescue Plan, and many of you were partners in that effort. Together, we kept people in their homes, saved small businesses, and delivered relief to millions of families all over the country. Our collective efforts helped secure one of the most equitable economic recoveries on record. 

Now we are applying these lessons to our implementation of the Inflation Reduction Act. To date, the IRA has supported the creation of over 2,000 clean energy projects across the U.S., generating over $380 billion in announced investments. What’s even more promising is that these investments are reaching a broader range of communities than ever before. 

For instance, 85% of clean energy investments have been made in areas with below-average wages and 85% have gone to communities with below-average college graduation rates. This growth is an outstanding example of this Administration’s commitment to grow the economy from the bottom-up and the middle-out, not just on aggregate, and to build the strength of the economy by expanding productive capacity in communities that have been overlooked. 

Treasury is also working to bolster clean energy investments in low-income and environmental justice communities through IRA “bonus incentive credits” which help make these clean energy projects possible. 

These include the:

• Low-Income Communities Bonus Credit Program
• The Energy Community Tax Credit Bonus; and 
• Prevailing Wage and Apprenticeship Requirements

Last month, I had the opportunity to visit one such project that is not too far from here: the Sun Valley Bus Yard in Los Angeles, part of the Los Angeles Unified School District’s (LAUSD) electrification initiative. Partially funded by IRA green credits, this project is not only helping LAUSD transition to a fleet of 180 electric buses but is also providing local students with training in electrification technologies. The project’s strategic location — between a community center, an airport, and a high school — means it has the potential to serve as a power source for the local grid, further demonstrating the far-reaching impacts of the IRA. This visit underscored for me how clean energy investments are benefiting both the environment and communities in need, creating pathways to a more equitable and sustainable future.

Climate Investments Advancing Economic Resilience

Our implementation efforts so far are exciting – but we all know partnerships with trusted service providers are integral to the success of federal programs. This is the moment CDFIs have been training for over the last 30 years! That is why the Biden-Harris Administration, the bipartisan CDFI Caucus, and Treasury have worked together to give CDFIs the tools to be a force multiplier in our clean energy economic transition. I want to briefly talk about two examples:

First, included in the IRA is the Environmental Protection Agency’s Greenhouse Gas Reduction Fund (GGRF), including the $14 billion National Clean Investment Fund, the $6 billion Clean Communities Investment Accelerator, and the $7 billion Solar for All program. 

OFN and many other CDFIs, Minority Depository Institutions (MDIs), and trade networks are recipients of GGRF and working closely with other state and nonprofit recipients. Together, you all will create a national financing network for clean energy and climate solutions to reach all communities across the country. It is the deep relationships in communities held by CDFIs that will help ensure that those most risk of being left out of the clean energy transition can access cost-saving technology.

Second, the State Small Business Credit Initiative (SSBCI) is a nearly $10 billion program providing capital to small businesses across the nation. As of year-end 2023, jurisdictions have reported that SSBCI funding has supported more than 3,600 small businesses across the country, facilitating over $3 billion in new loans and investments, $500 million of which was expended to support underserved businesses. About 40% of transactions were reported as supporting underserved businesses.

Participating jurisdictions are just getting started, and already CDFIs have been instrumental to the deployment of funds. Let me share some exciting pieces of data from the first SSBCI report:

• Through last year, over 60% of all SSBCI supported transactions were made through CDFIs, resulting in over $400 million in new financing for small businesses. 
• Over 82% of CDFI transactions involved underserved businesses, a key driver of the program’s ability to reach these entrepreneurs. 
• 55% of CDFI transactions were conducted by CDFI loan funds with average loan amounts around $100,000, supporting businesses with smaller capital needs. 

The SSBCI program also includes funding for technical assistance programs, geared toward providing access to financial advisory, legal, and accounting services for underserved and very small businesses. Treasury has also partnered with the Minority Business Development Agency (MBDA) to launch the Capital Readiness Program which supports businesses through 43 service providers across the country.

Last year Treasury also released an updated CDFI Certification Application after incorporating extensive feedback from community finance practitioners. The updated Certification Application comes at a critical time in which the CDFI field has grown and become more diverse in its structure types, product offerings, and sectors served – and is increasingly serving as a qualifier in many cases for other federal, state, and private sector resources.

Private Sector Partnership

The Administration is also working with the private sector to complement federal efforts to support CDFIs. The Economic Opportunity Coalition (EOC) is a group of more than thirty of America’s leading companies that was launched by Vice President Harris and has the bipartisan support of Senators Mike Crapo and Mark Warner. Already, the EOC has secured over $1 billion in deposits into CDFIs and MDIs and has pledged to reach $3 billion in deposits by 2025.

Conclusion and Call to Action

The Biden-Harris Administration worked with Congress to pass and implement four “once-in-a-generation” bills that will fundamentally transform our economy. Now we need your help. As we reflect on the journey over the past 30 years, it is time to build on your successes to prepare for the opportunities afforded through historic federal investments. 

You are critical to ensuring that borrowers, especially small business owners, successfully navigate changing market demands to capitalize on new opportunities. This includes mapping where capital is landing compared to where opportunities exist, developing strategies that align with emerging economic trends, and staying grounded in community needs to better serve current and future customers. 

Together, we can lay the groundwork for a future where every community has the opportunity to thrive. Thank you for your dedication and your vision.

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