Senator Hyde-Smith Asks Treasury Department About Community Investment Program | Mississippi Politics and Current Affairs
U.S. Senator Cindy Hyde-Smith has questioned actions by the Biden administration that could impact a hugely popular program used to spur investment in Mississippi, especially in economically troubled areas. Their actions could also add new regulatory burdens to small businesses.
The questioning took place during a hearing of the Senate Financial Services and General Government Appropriations Subcommittee. Hyde-Smith, who is a Ranking Member, asked for a rationale to cut funding for the Community Development Financial Institutions (CDFI) banking enterprise program.
Most recently, 48 Mississippi banks, credit unions and other financial institutions received $8 million to support investments across the state.
“The Bank Enterprise Program is well received by local banks and credit unions as it allows them to leverage their assets to invest in small businesses and start-ups, giving them the ability to support the creation and maintaining jobs in areas that need them most,” said Hyde-Smith. “This program is oversubscribed compared to other programs, and I want to know how you plan to support investments in economically distressed areas with reduced funding.”
Congress appropriated $37 million for the banking enterprise program in fiscal year 2022, more than the $26 million included in Biden’s budget request.
Deputy Treasury Secretary Wally Adeyemo told Hyde-Smith that the department fully supports the banking enterprise program and other community investment programs, but the administration wants to attract more private capital to also support housing and other community needs.
Hyde-Smith also warned Adeyemo about the financial and compliance burdens facing small businesses as the Treasury Department works to finalize Transparency in Business Act regulations for a database on the beneficial ownership. The database is intended to help fight financial crimes by providing transparency into who forms, owns and controls a company.
“Treasury estimates that proposed rules to implement the Transparency of Business Act will require more than 25 million existing small businesses to spend a total of more than $4 billion to submit beneficial ownership reports to Financial Crimes. Enforcement Network,” Hyde-Smith said. “A lot of people really see it as an extra term and extra work. I hope this will prove to be a very beneficial tool in solving this problem, as it will be extremely painful for many people.
Adeyemo acknowledged the estimated compliance costs, but said the Department is aware of the compliance costs because it builds a database.
“Our goal is really to try and find a way to create something that is comprehensive, but where the reporting requirements are as low as possible to make it as easy as possible for companies to be compliant and to have a basis of holistic data in this country,” Adeyemo said.
Hyde-Smith also used the hearing to question the Treasury Department’s enforcement of economic sanctions imposed on Russia after its invasion of Ukraine, as well as the high number of Treasury and government employees. ‘Internal Revenue Service who continue to telecommute instead of returning to their offices.
The entire hearing on the Treasury’s Office of Terrorism and Financial Intelligence and the Treasury’s Financial Crimes Enforcement Network budget requests is available here.