April 27, 2020

Senator Warren Joins Colleagues to Urge the Trump Administration to Deliver Critical COVID-19 Relief to Minority and Underserved Businesses

Lower-income and minority communities have been disproportionately impacted by public health and economic effects of COVID-19

Washington, DC -- Today, United States Senator Elizabeth Warren (D-Mass.) joined Senator Mark R. Warner (D-Va.), along with Senate Democratic Leader Chuck Schumer (D-N.Y.), Senator Sherrod Brown (D-Ohio), Ranking Member of the Banking Committee, and fellow Committee members Senators Jack Reed (D-R.I.), Bob Menendez (D-N.J.), Chris Van Hollen (D-Md.), and Doug Jones (D-Ala.), in pushing Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell to make sure that minority and low- and moderate-income (LMI) communities get proper access to the critical assistance made available under the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the recently enacted Paycheck Protection Program and Health Care Enhancement Act (PPP Enhancement Act).

"As you know, the public health and economic effects of the COVID-19 outbreak have been particularly disproportionate and severe for LMI and minority communities. Congress took important first steps to help address the acute impact being felt in these communities by passing the PPP Enhancement Act. This legislation includes important set-asides for community and mission oriented lenders," the senators wrote in a letter today, urging Mnuchin and Powell to take several steps to make funds available to minority depository institutions (MDIs) and mission-oriented leaders like community development financial institutions (CDFIs)

"MDIs and CDFIs are effective gateways to serving LMI communities and minority households and communities with high concentrations of minority populations. Data indicates that MDIs tend to serve communities in which a higher share of the population lives in LMI census tracts and a higher share of residents are minorities, compared with non-MDI banks," the senators noted. "In addition, MDIs tend to originate a greater share of their mortgages for properties in LMI census tracts and to minority borrowers when compared with non-MDI community banks. Compared with non-MDIs, MDIs also originate a greater share of SBA 7(a) loans to borrowers in LMI census tracts and to borrowers in census tracts with higher shares of minority residents. Similarly, CDFIs have demonstrated a strong track record of success in reaching LMI and minority communities. Getting critical dollars into these communities quickly can mean all the difference for these hard-hit communities."

Since the beginning of the COVID-19 outbreak, Senator Warren has worked to ensure Massachusetts can get the help it needs -- including relief for the Commonwealth's small businesses. She and Representative Nydia Velázquez (D-N.Y.) have called for government watchdogs to investigate the poor and unequal implementation of the program. Senator Warren and colleagues have called on the federal government to ensure that minority-owned businesses are not shut out of these resources. Senator Warren has also proposed eliminating the cap on total relief on small business loans.