U.S. Rep. Joaquin Castro, D-San Antonio, wrote a letter to Treasury Secretary Steven Mnuchin and Jovita Carranza, administrator of the Small Business Administration, calling on the department to designate billions of dollars to local nonprofits in the next round of federal support to small businesses.
Known as Community Development Financial Institutions, these groups support small business owners who did not have strong enough relationships with banks in order to land funding in the first pass of forgivable federal loans in the Paycheck Protection Program that legislators intended to keep employees on company payrolls.
"It is essential that upcoming legislation automatically authorize certified CDFIs as lenders for PPP and include a set aside of at least $65 billion to be channeled through these CDFIs," Castro wrote. "These institutions play a leading role in serving farmers, as well as veteran, family, women, and minority-owned small businesses in rural, urban and suburban communities.
“Latino businesses commonly bank with smaller financial institutions versus larger banks who are prioritizing businesses that already bank with them.”