Largest direct capital allocation includes Black banks
BMWORLDWIDE–WASHINGTON–.Just after the 2014 midterm election, Michael Grant, then the president of the National Bankers Association, was part of a panel at Howard University on the meaning of the results. Afterwards, he gathered with a small group including Ron Busby, President of the US Black Chambers; James Winston, President of the Black-Owned Broadcasters, Marie Johns, former deputy administrator of the Small Business Administration in a retreat led by John William Templeton, executive editor of blackmoney.com, who had called on a direct allocation of $30 billion to African-American businesses.
Seven years later, Vice President Kamala Harris and Treasury Secretary Dr. Janet Yellen announced that $8.2 billion has gone to financial institutions through the Emergency Capital Investment Program. “Vice President Kamala Harris said. “Small businesses, non-profits, entrepreneurs, and community organizations are using the ECIP funds to create opportunity and prosperity, not only for their community, but for our nation.”
“These Emergency Capital Investment Program funds are providing opportunity to underserved communities across the country, helping them to regain their footing following the pandemic and strengthening their resilience against future shocks,” said Secretary of the Treasury Janet L. Yellen. “These critical investments represent a significant step toward expanding access to the capital and services required to rebuild and fuel long-term economic growth.”
The community financial institutions that received investments through ECIP include banks, holding companies, and credit unions that are designated as community development financial institutions (CDFIs) or minority depository institutions (MDIs).
After a meeting with the National Black Caucus of State Legislators in Los Angeles in 2015, the group began meeting monthly as Black Wealth 2020. Sen. James Sanders, D-Queens, chair of the NBCSL economic development committee, invited BlackWealth 2020 to present at the Black Legislative Caucus of New York in 2018, and participated in a letter to the Federal Reserve Chair Jerome Powell, seeking the $30 billion allocation from the central bank.
The onset of the COVID-19 pandemic and the 2017, 2018 and 2020 elections in which Black voters turned out in record numbers bore fruit with the passage of the CARES legislation that authorized ECIP in late 2020 and the following American Rescue Plan in 2021.
Now, the battle is to insure that the funds go to the communities which need it most. Recent news from Mississippi shows that the administration of federal funds by states and localities can be a bottleneck and barrier. Michael Hill, former president of the Atlanta Metropolitan Black Chamber of Commerce, has formed the Southern Economic Regional Roundtable to give business groups, political and community leaders a platform to distribute information and share successes throughout the South.
The issue in the 2022 elections is who gets to manage the distribution of this unprecedented funding. An allocation of $5 billion to Black farmers was blocked by lawsuits, leading to a re-authorization in the Inflation Reduction Act. During the 2022 elections, African-Americans are running for U.S. Senate, governor or attorney general in Maryland, North Carolina, South Carolina, Florida, Alabama, Arkansas and Kentucky.
As Templeton told the Atlanta Metropolitan Black Chamber in August, “our votes are our venture capital.”