South Iowa News

U.S. Representatives Zach Nunn (IA-03) and Don Davis (NC-01) have introduced a bipartisan bill aimed at preserving access to credit for rural communities in Iowa. The Rural Credit Access Act seeks to modernize the Community Development Financial Institution (CDFI) program at the U.S. Department of Treasury, with the goal of creating transparency and preventing unintentional harm to these communities.

According to Rep. Nunn, who has been a strong advocate for small towns, "CDFIs play a critical role in supporting rural small businesses, community centers, schools, and more that may otherwise be considered too risky to receive loans. By improving this program, we can continue to strengthen rural communities by generating jobs and creating new opportunities for families at a time when that investment is needed."

The CDFI designation, obtained through the Treasury, allows banks, credit unions, and other financial institutions to invest in community development projects and provide essential financial services. Rep. Davis emphasized the importance of supporting these institutions in challenging times, stating, "By supporting these institutions through challenging times, we're investing in the future of rural communities and ensuring no one is left behind in our pursuit of economic prosperity."

Currently, there are 1,462 CFDIs across the country, including nine in Iowa. These financial institutions have the potential to further invest in their communities. For instance, according to Veridian, for every $1 million received in CDFI funding, financial institutions can lend nearly $20 million in mortgages for those who may not otherwise qualify for a home loan.

Jim Nussle, President and CEO of America's Credit Unions, highlighted the importance of CDFIs in underserved areas and low-income communities. He expressed gratitude to Congressman Nunn for introducing this bill, stating, "This legislation will ensure his constituents in Iowa and consumers across the country have safe and reliable access to CDFI institutions and the programs they provide without unexpected disruptions in service."

The Rural Credit Access Act, a bipartisan effort, includes several provisions aimed at enhancing the CDFI program. It will require the Treasury to enhance transparency by developing a required notification process to alert CDFIs if they are at risk of losing their certification for a reason other than fraud or inappropriate behavior. Additionally, the bill proposes creating an Ombudsman's Office to assist financial institutions in navigating the CDFI application process and aims to protect taxpayer funds by preventing CDFIs with evidence of fraud from participating in arbitration.

The bill was introduced at a press conference in Des Moines, where Rep. Nunn was joined by the Iowa Credit Union League, Community First Credit Union, and Veridian. The full text of the bill can be found [here](link).

This bipartisan effort to bolster Iowa's rural communities through the Rural Credit Access Act demonstrates the commitment of U.S. Representatives Zach Nunn and Don Davis to supporting the economic prosperity and well-being of these communities.