Harris, Yellen Announce Billions in Investments to Emergency Capital Investment Program

WASHINGTON — Vice President Kamala Harris and Treasury Secretary Janet Yellen announced on Tuesday over $8.7 billion in investments through the Emergency Capital Investment Program for small businesses and low- and moderate-income consumers in rural and underserved communities.

The program’s investments were announced during this year’s Freedman’s Bank Forum and enable the Treasury Department to make direct investments in banks, credit unions and holding companies that are designated as either a Community Development Financial Institution or a Minority Depository Institution. ECIP was established by the Consolidated Appropriations Act passed last year and will go towards supporting 186 community financial institutions, according to a Treasury Department release. 

Support for minority-owned businesses is a key point of emphasis of the program with $3.1 billion in investments being offered to 57 minority depository institutions. Banks and credit unions comprise about 54% and 46% of the institutions recommended for an ECIP investment, respectively.

The investment amounts will range from more than $200 million to less than $100,000 and are intended to support “mission-motivated” institutions in order to sustain investments in low- to moderate-income disproportionately affected by the COVID-19 pandemic, according to the Treasury. These organizations typically require more time-intensive and personalized technical support for borrowers who face economic barriers.

While the Community Development Financial Institution Rapid Response Program announced in June provided $1.25 billion in grants to the organizations, ECIP funds will be provided through preferred stock or subordinated debt investments by the Department of the Treasury. The full list of approved ECIP applicants was included with the Treasury Department’s release announcing the investments.

Institutions receiving ECIP investments are headquartered in 36 states as well as the District of Columbia and Guam. The states with the most ECIP investment offers are Mississippi, Louisiana, North Carolina, California and Texas.

“We know that the communities hurt most by COVID-19 have often been communities of color, and Treasury has implemented relief legislation with equity in mind,” Yellen said in a written statement. “Today, we’re seeing one result of that effort: Treasury, through the Emergency Capital Investment Program, is injecting nearly $9 billion into Community Development Financial Institutions and Minority Depository Institutions.” 

Reece can be reached at [email protected].