Washington, D.C. – Today, U.S. Senators Catherine Cortez Masto (D-Nev.) and Todd Young (R-Ind.) introduced the Municipal Investment and Neighborhood Transformation (MINT) Act to support community development projects across the country. This legislation would allow Federal Home Loan Bank (FHLBank) member institutions to support local development authorities by credit enhancing tax-exempt bonds for non-housing related community development projects. This legislation was introduced in the House of Representatives by Congressmembers Lisa McClain (R-Mich.-09) and Sam Liccardo (D-Calif.-16).
“For too long, communities across the country have had a hard time raising the funds they need to make improvements to sewer and water systems, hospitals, schools, and more,” said Senator Cortez Masto. “Our legislation unlocks more options for these communities that were previously unavailable to them and empowers the Federal Home Loan Bank system to better fulfill its mission to support community development.”
“The Federal Home Loan Banks play a critical role in providing reliable liquidity to financial institutions to make local economic projects possible. Our bill will restore a proven financing tool to help lower costs for community development projects in towns across America. Bureaucratic red tape should not stand in the way of local communities accessing affordable financing,” said Senator Young.
“Communities shouldn’t have to pay higher borrowing costs simply because they lack access to Wall Street financing. This bill levels the playing field by giving local lenders the tools they need to help their communities invest in infrastructure, health care, and economic development without putting taxpayers on the hook for higher interest rates. It will help unlock investment where it’s needed most,” said Rep. McClain.
“As Mayor of San José, I saw firsthand how bonds help cities put more shovels in the ground on critical infrastructure. The MINT Act cuts red tape and gives local communities a green light on projects that expand hospitals, rebuild crumbling bridges, and improve our children’s schools. I look forward to working with colleagues in both houses and both parties to pass this bill, and help deliver the resources our cities need to thrive,” said Rep. Liccardo.
“The Federal Home Loan Banks appreciate Senator Cortez Masto’s leadership on this important legislation. The MINT Act permanently restores letters of credit supporting non-housing tax-exempt bonds as a proven tool that empowers local communities to finance critical infrastructure – including schools, healthcare facilities, water systems, and other essential projects – more affordably. For more than 90 years, the FHLBanks, through their more than 6,400 members, have been a critical financial partner to municipalities across the country and this legislation improves market access for community-based lenders, promotes private investment, and eases pressure on local taxpayers,” said Ryan Donovan, President and CEO of the Council of Federal Home Loan Banks.
“This legislation is another way the Federal Home Loan Banks can work with our member financial institutions to make a meaningful difference in communities around the nation,” Brendan McGrath, President and CEO, FHLBank Indianapolis.
Currently, FHLBank member institutions are allowed to support municipalities when they’re setting up housing related tax-exempt bonds but are unable to do so for a variety of other community development projects, such as infrastructure improvements, water and sewage treatment facilities, transportation centers, industrial development, health care facilities, or schools. The Senators’ legislation would include these non-housing community development projects as eligible for Letters of Credit from FHLBank member institutions, making it easier for municipalities and their development authorities to secure a tax-exempt bond to fund these projects. The FHLBanks previously had this authority from 2008 to 2010.
Read the bill here.
Senator Cortez Masto has been the leading voice in Congress demanding the FHLB System finance more homes and community development investments. Last year she secured $40 million in investments from the FHLBank of San Francisco to support the single-family bond program in Nevada, and in the past few years she secured more than $15 million from the Bank’s affordable housing fund created for Nevada. She’s also pushing to reform the FHLB system as a whole. In April, Cortez Masto introduced the Federal Home Loan Banks’ Mission Activities Act, which would ensure the FHLBanks are re-focused on their mission to support housing finance and community development.
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