Even as the Trump Administration and Congress take important but limited steps in a fourth stimulus bill to replenish funding for the Payroll Protection Program, much more must be on the table in the coming weeks for U.S. households, including homeowners, renters and the nation’s smallest enterprises, to not only prop up the U.S. economy but to ensure a reasonable economic recovery. A number of steps will have to be taken to address the on-going implementation challenges following the Coronavirus Aid, Relief, and Economic Security (CARES) Act and to look ahead.
Two national organizations that advocate for policies and programs to strengthen underserved communities, Prosperity Now and the National Community Reinvestment Coalition (NCRC), today called on Congress and the Trump Administration to prioritize a set of housing, small business and income-related needs building on the the CARES Act and through enactment of new recovery efforts:
For homeowners and neighborhood stabilization:
- Equitable access to mortgage relief for all affected homeowners regardless of who owns, backs or insures the loan, and a program to ensure mortgage market liquidity and a credit facility for mortgage servicers
- Provide a path to affordable and sustainable repayment options for homeowners at the conclusion of any mortgage forbearance period
- Ensure servicers collect robust data on loss mitigation and foreclosures during and immediately after the national emergency, and regulators actively monitor the market to find out from industry what is going on is this fast moving environment and assess the status of the economic crisis affecting consumers.
- A significant investment in housing counseling to help families retain homeownership post-forbearance and to secure housing
- Avoid changes to the CRA rules that would disrupt and weaken existing bank incentives to lend, invest and provide services in low- and moderate-income (LMI) communities, including CRA incentives to provide small mortgages, renovation and rehabilitation loans, to lend in low- and moderate-income (LMI) neighborhoods, and to facilitate neighborhood stabilization in impacted communities. CRA credit must remain squarely focused on bank activities that primarily benefit LMI communities as the nation recovers.
- A robust housing assistance program to fund missed rental and mortgage payments to prevent a wave of evictions after the federal moratorium, to be funded through existing programs such as the Emergency Solutions Grant Program, Emergency Shelter Grants, the Disaster Housing Assistance Program, a reauthorization of the Hardest Hit Fund and other vehicles
- A national eviction moratorium that provides eviction relief for all affected tenants regardless of who owns, backs or insures the mortgage on the multifamily property.
- Significant investment in federal housing programs, including for Section 8 Housing Choice vouchers, rural housing, homeless assistance, fair housing enforcement, and programs to assist HUD-assisted senior and disabled resident communities.
- Ensure that affected renters are notified of their rights if unable to pay rent, and that notifications and assistance are available in multiple languages.
For small businesses:
- An expanded Paycheck Protection Program (PPP) that incentivizes small business grants and small dollar loans, and sets aside 50% of additional PPP funding for micro-businesses, including a targeted share for minority and women-owned small businesses
- Congress should widen the pipeline for distribution of PPP funds to include all federally-regulated entities, by including Community Development Finance Institutions (CDFIs) that have originated at least $5 million in small business loans in a consecutive 12-month period in the past three years and providing additional technological assistance to facilitate the participation of smaller CDFIs.
For low-income people:
- Congress should pass additional direct cash assistance for lower-income families.
“While the CARES Act was an important first step, much more is needed,” said Jesse Van Tol, CEO of NCRC. “It is clear that as we continue to social distance to halt the spread of COVID-19, more and more Americans and small businesses are facing overwhelming financial challenges and Congress and the Trump Administration must do more to help them over the coming months.”
“It is clear that last month’s CARES Act is just one step in preventing the further cratering of the U.S. economy,” said Gary Cunningham, President and CEO of Prosperity Now. “The federal government must now act to not only prevent additional short-term economic pain for American small businesses and families but to also lay the groundwork for them to emerge from the COVID-19 crisis positioned to more fully participate in and benefit from the economic recovery.”
The National Community Reinvestment Coalition and its grassroots member organizations create opportunities for people to build wealth. We work with community leaders, policymakers and financial institutions to champion fairness and end discrimination in lending, housing and business.
About Prosperity Now
Prosperity Now believes that everyone deserves a chance to prosper. Since 1979, we have helped make it possible for millions of people, especially people of color and those of limited incomes, to achieve financial security, stability and, ultimately, prosperity. We offer a unique combination of scalable practical solutions, in-depth research and proven policy solutions, all aimed at building wealth for those who need it most.