Fact sheet comes as part of today’s first Treasury Department summit on investing in the economic future of Latino communities
WASHINGTON – Today, the U.S. Department of the Treasury released a fact sheet detailing actions the Department has taken and their impact on Latino households, businesses, and communities. This fact sheet comes as part of the first Treasury Department summit on investing in the economic future of the Latino community.
When President Biden came into office at the height of the COVID-19 pandemic, what was already a health and economic crisis was made worse for Hispanic and Latino households and businesses, as well as other underserved communities, by a lack of adequate investment. This long-standing underinvestment constrained economic opportunities and contributed to economic disparities, such as lower home ownership rates. Over the past two and a half years, the Treasury Department’s work to center equity in its pandemic recovery efforts delivered real results for the Latino community that aim to expand opportunities for all Americans to fully participate and compete in the 21st century economy – creating a blueprint for equitable implementation of other Biden-Harris Administration priorities and initiatives.
Key Treasury Department Actions:
- Building the capacity of local governments to address systemic barriers to health, housing, and financial well-being for Latino households: The Treasury Department prioritized equity in its spending guidelines for the American Rescue Plan’s (ARP) State and Local Fiscal Recovery Fund (SLFRF) – the largest-ever infusion of direct pay to state, local, and Tribal governments. To address both the disproportionate impacts of the pandemic and historic underinvestment that left some communities more vulnerable, the Department provided a broad menu of services to enhance health, housing, employment, and economic equity in low-income and high poverty communities. For example, the Department provided Puerto Rico’s central and municipal governments approximately $4 billion in SLFRF funds to respond to the public health and economic impacts of the pandemic, provide premium pay to essential workers, maintain vital public services, and invest in water, sewer, and broadband infrastructure.
- Investing in financial institutions with a track record of delivering capital to Latino communities and businesses: Through the Emergency Capital Investment Program (ECIP), the Treasury Department has invested $1.6 billion in Latino-owned and Latino-majority shareholder depository institutions. Based on preliminary analysis, the Department projects that investments across the entire ECIP portfolio may increase lending in Latino communities by nearly $58 billion over the next decade. Additionally, in April, the Community Development Financial Institutions Fund (CDFI Fund) announced over $1.73 billion of grant awards through the Equitable Recovery Program (ERP), which included many awards to community development financial institutions (CDFIs) that have strong track records of lending to minority borrowers and in majority minority census tracts. A key part of those ERP awards includes 70 grants totaling $226 million to CDFIs in Puerto Rico – the largest infusion of ERP funding to any single state or territory.
- Growing Latino-owned businesses by expanding financing and technical assistance: According to outside research, Latinos start more businesses per capita than any other racial and ethnic group in the United States. Nearly one-quarter of all new entrepreneurs in 2021 were Latino. The State Small Business Credit Initiative (SSBCI) includes $2.5 billion in funding and incentive allocations to support the provision of capital to underserved businesses – with $1 billion of these funds to be awarded to the jurisdictions who are most successful in reaching underserved businesses. In addition to awards to states, tribes, and other territories, earlier this year Puerto Rico was approved for up to $109 million in SSBCI funds to provide credit and investments in small businesses.
- Supporting Latino workers in Puerto Rico: To boost workers and small businesses across the Island, the ARP significantly expanded Puerto Rico’s version of the Earned Income Tax Credit (EITC), quadrupling benefits for workers through the first federal enhancement to Puerto Rico’s EITC since the credit was established nearly 50 years ago.
- Connecting Latino families with tax credits: Following the passage of the ARP, the Treasury Department implemented the expanded Child Tax Credit (CTC), under which tens of millions of eligible families received between $250 and $300 per child in monthly support from July to December 2021. Data released last year by the Census Bureau showed that the expanded CTC was the leading driver behind a 46 percent decline in child poverty in 2021 – cutting the annual child poverty rate to its lowest-ever recorded level including record lows in Hispanic child poverty. For Puerto Rican families in particular, the ARP broadened tax benefits at an unprecedented scale by permanently expanding the CTC in Puerto Rico from families with three children to all families with at least one child. In 2022, the Treasury Department and the White House engaged in extensive outreach to ensure as many families as possible in Puerto Rico received the CTC, resulting in direct assistance to more than 250,000 families, a six-fold increase over the prior year, with an average benefit was $4,700 per family.
- Helping Latino families remain homeowners: The reach of Homeowner Assistance Fund (HAF) resources to economically vulnerable and traditionally underserved homeowners has exceeded prior federal mortgage assistance and foreclosure prevention programs. As of December 2022, 57 percent of HAF assistance was delivered to very low-income homeowners, and 20 percent of homeowners assisted self-identified as Hispanic.
- Helping Latino families avoid eviction: The Emergency Rental Assistance (ERA) program was the first nationwide program aimed at preventing eviction through direct assistance to renters. As of December 2022, extremely low-income renters have received close to two-thirds of ERA assistance. Research has found that nearly one-third of rental assistance funds went to Hispanic households.
- Increasing federal business with Latino-owned companies: Procurement with government agencies plays an important role for many minority-owned businesses. The Biden-Harris Administration has set a goal to increase the federal government’s contracts with minority-owned and small and disadvantaged businesses to 15 percent by 2025. At the Treasury Department, there has been a 23 percent increase in the dollar amount of prime contracts awarded to Hispanic owned businesses since FY 2020. In FY 2020, the Department awarded a total of $100 million to Latino-owned businesses. By FY 2022, the Department has awarded over $123 million to Latino-owned businesses. The Treasury Department has also designated two minority-owned financial institutions as financial agents of the government.
While significant progress has been made, much more remains. Among other initiatives, in the coming months, the Treasury Department will continue leading the implementation of key provisions of the Inflation Reduction Act, which will help create good-paying jobs and ensure all Americans benefit from the growth of the clean energy economy, particularly communities that have been left behind and harmed by pollution. As the Treasury Department continues to tackle both immediate and long-term structural challenges of the American economy, equity and racial justice will remain at the forefront of its work.
A livestream of today’s Treasury Department summit, Investing in the Economic Future of the Latino Community, is available here.
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