S.1880 - CDFI Bond Guarantee Program Improvement Act of 2025 (119th Congress)
Summary
S.1880, the CDFI Bond Guarantee Program Improvement Act of 2025, aims to reauthorize and improve the Community Development Financial Institutions (CDFI) Bond Guarantee Program. The bill seeks to provide CDFIs with a sustainable source of long-term capital to promote economic opportunity and community development in underserved areas. It amends the Community Development Banking and Financial Institutions Act of 1994 to achieve these goals.
Expected Effects
The bill's passage would lead to an extension of the CDFI Bond Guarantee Program for another four years. It would also modify the program's operational parameters, such as the minimum guarantee amount and reporting requirements. These changes are intended to make the program more effective in supporting community development.
Potential Benefits
- Provides long-term capital for CDFIs, enabling them to invest in underserved communities.
- Increases economic opportunity and promotes community development investments.
- Sets a minimum guarantee amount to ensure impactful projects are funded.
- Requires reports to Congress on the program's effectiveness, promoting accountability.
- Supports distressed communities by providing access to capital for development projects.
Potential Disadvantages
- Potential for inefficient allocation of resources if CDFIs are not properly vetted.
- Increased government debt through bond guarantees if projects fail.
- Possible delays in implementation due to reporting requirements.
- May not address the root causes of poverty and lack of economic opportunity.
- Could create dependency on government funding rather than fostering self-sufficiency.
Constitutional Alignment
The bill aligns with the Constitution's general welfare clause (Preamble) by promoting economic opportunity and community development. Congress has the power to enact laws necessary and proper for carrying out its enumerated powers (Article I, Section 8), which can be interpreted to include supporting financial institutions that serve underserved communities. The bill does not appear to infringe on any specific constitutional rights or limitations.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).