Black Banks Shut Out of New Federal Tax Credit Program
July 15, 2015
Out of $3.5 billion awarded, not a single dollar went to minority institutions
Minority-owned banks are claiming that the federal government has shut them out of tax credits intended to spur economic development in under-served communities. They are referring to last month’s distribution of funds by the Community Development Financial Institutions (CDFI) Fund, an arm of the Treasury Department.
CDFI issued $3.5 billion in New Markets Tax Creditallocation to 76 entities across the country to spur economic development. However, no funds were awarded to the nation’s minority banks, despite those institutions claiming the longest track records of deploying capital in the nation’s most under-served areas.
The NMTC Program is designed to spur economic development in distressed communities across the U.S. The program provides a tax credit to investors who invest in projects or small businesses in those communities by funneling their investments through the recipients of tax credit allocation.