HOPE and African American Alliance of CDFI CEOs Affirm Transparency in SSBCI 2.0
April 29th, 2022
By: Kiyadh Burt
U.S. Treasury recently issued an interim final rule to require jurisdictions participating in the State Small Business Credit Initiative (SSBCI) program to collect certain demographic data on businesses served through the program. Jurisdictions will provide self-certification of whether the businesses served are owned by people of color, women, or veterans, as well as require the collection of certain data points about the principal owners such as race, gender, ethnicity, and sexual orientation. These data were not required during SSBCI’s first iteration from 2010 to 2017.
This current round – SSBCI 2.0 – will funnel billions of federal dollars primarily through banks and state development agencies. Such an approach, as demonstrated in the Paycheck Protection Program and state level CARES Act small business relief programs, is an inequitable means of distribution.[1] The interim rule emphasizes data collection and transparency as a key driver in the prevention of similar disparate outcomes for historically underserved businesses.
The comment submitted by HOPE and the African American Alliance of CDFI CEOs supports this requirement, a welcome change from SSBCI 1.0., It also repeats a previous request that Treasury also assess the demographics of the geographies of communities reached by SSBCI, particularly persistent poverty areas and communities of color.[2] Overall, the interim rule is largely consistent with recommendations HOPE has suggested related to SSBCI and other small business lending policies.[3] As such, the letter builds on the record of support for Treasury to implement policy to ensure equitable access in the distribution of capital in small business lending.
Read the full comment from HOPE and the Alliance on the Department of Treasury’s interim final rule.
[1] Kiyadh Burt and Diane Standaert, “Racial gulf created by economic recovery efforts will echo for generations,” MLK50, Aug. 11, 2021, https://mlk50.com/2021/08/11/racial-gulf-created-by-economic-recovery-efforts-will-echo-for-generations/
Hope Policy Institute, “Deep South States Provide Over $1.1 Billion in Small Business Relief: Who Benefits, Who is Left Behind?”, Aug. 25, 2020, http://hopepolicy.org/manage/wp-content/uploads/Deep-South-States-Provide-Over1.1-Billion-in-Small-Business-Relief-‘Brief-Final-1.pdf .
[2] Partners for Rural Transformation, “Recommendations to the U.S. Department of Treasury for Ensuring State Small Business Credit Initiative Funds Reach Persistent Poverty Communities”, May 25, 2021, https://www.ruraltransformation.org/wp-content/uploads/2021/05/PRT-SSBCI-Recommendations-to-Treasury-5-25-2021-1.pdf
[3] HOPE Policy Institute, “HOPE Submits Comments to Advance Fair Lending for Small Businesses”, January 10th, 2022, http://hopepolicy.org/briefs/hope-submits-comments-to-advance-fair-lending-for-small-businesses/
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