Peterson, Katko, Capito, Cardin Bill to Cut Red Tape Around EDA Funds Heads to President's Desk
October 5, 2020
WASHINGTON, D.C.– U.S. Representatives Collin Peterson (D-Minn.) and John Katko (R-N.Y.) along with Senators Shelley Moore Capito (R-W.Va.) and Ben Cardin (D-Md.), today applauded the House of Representatives’ passage of their bill, the Reinvigorating Lending for the Future (RLF) Act of 2020, legislation to reduce barriers to lending for recipients of capitalization grants through the U.S. Economic Development Administration’s (EDA) Revolving Loan Fund Program. The bill now heads to President Donald J. Trump’s desk for his signature.
“The Reinvigorating Lending for the Future Act is needed now more than ever as communities work to rebuild our rural economies as a result of the COVID-19 pandemic,” said Representative Peterson. “This bipartisan legislation requires no additional funding, it just creates more flexibility for regional economic development. Ultimately this legislation returns decision making to the local units of government, eliminates unnecessary reporting and is just good common sense.”
Access to working capital is critical for small businesses right now, particularly those in rural areas and those recovering from coronavirus. This bipartisan bill works to address that issue and the red tape surrounding dispersing aid,” Senator Capito said. “I’m proud to have joined with Senator Cardin on this legislation, and I appreciate Representatives Peterson and Katko sponsoring it in the House. I look forward to President Trump signing it into law soon.”
“EDA’s revolving loan fund program has been an important resource for supporting business development in communities grappling with economic hardship. I have been pleased to see such bipartisan support for the program,” said Senator Cardin. “Our bill will enhance the revolving loan fund program’s effectiveness by empowering the economic development professionals who manage these RLFs to devote more of their time and expertise assisting the businesses and communities they serve.”
“I’m proud to announce the passage of the Reinvigorating Lending for the Future (RLF) Act of 2020, bipartisan, bicameral legislation that will allow more Central New York businesses to access funding through the EDA’s Revolving Loan Fund Program. At a time when our community continues to face significant financial uncertainty due to the COVID-19 pandemic, this legislation takes important steps to remove red tape that can often hinder a business’s ability to receive loans through this program. Working with both Republicans and Democrats in Congress, I will continue to promote economic development in underserved areas and ensure programs like the Revolving Loan Fund Program are responsive to our community’s evolving needs,” said Representative Katko.
Under current policy, fund recipients must keep up with burdensome reporting requirements that discourage operators from utilizing the Revolving Loan Fund Program to its maximum potential while straining EDA resources. By responsibly vacating the federal interest for those funds made to revolving loan fund operators with a demonstrated track record of success, the RLF Act will promote lending to businesses and create jobs.
Joe McKinney, Executive Director, National Association of Development Organizations: "The U.S. Department of Commerce Economic Development Administration’s Revolving Loan Fund program provides working capital to small businesses and has proven particularly essential during the COVID-19 pandemic. The passage of the Reinvigorating Lending for the Future (RLF) Act of 2020 will further enhance the efficiency and impact of this important regional development lending program, will support COVID-19 economic recovery efforts, and will help small businesses survive and thrive."
Dawn Hegland, Executive Director Upper Minnesota Valley Regional Development Commission: "As a constituent and an economic development professional serving a rural five county area in western Minnesota, I am delighted to hear about the reduction of regulatory burdens associated with the EDA Revolving Loan Fund (RLF) program’s reporting. The Upper Minnesota Valley Regional Development Commission’s RLF was started in 1980. During these forty years, 133 loans totaling over $7.2 million dollars have been lent out to our region’s business and industry. Requiring RLF operators like us to continue reporting long after the lifespan of the loan is an unnecessarily burdensome requirement. In an office of only nine staff, time is a valuable resource at the UMVRDC and the existing reporting in perpetuity uses up valuable time that could be spent working with new borrowers. I am thrilled to see such commonsense legislation that can make a difference throughout our region and across the nation."
Marie Dranttel, Region Nine Development Commission: "As treasurer of the Region Nine Development Commission and a member of the Commission’s Revolving Loan Fund Committee, I can assure you that lifting the perpetual reporting requirement for EDA-funded revolving loans offers several improvements in effectiveness while maintaining the integrity and intent of the program. Specifically, we will be able to focus efforts more pointedly on reaching new business clients instead of on paperwork, which affords more time to build new economic development program. Additionally, lifting this unduly burdensome reporting requirement will accelerate the pace at which we can align lending programs to the unique conditions of our region."
Alexander Weego, Chairperson Region Five Development Commission: "We have revolved our funds at least nine times since the federal government capitalized our RLF. The savings of time spent to meet the EDA reporting protocols offers our Regional Development Commission an opportunity to invest in additional business technical assistance which is at an all-time high need and is a better investment of our quality staff time. The EDA reporting is redundant to our annual audit reporting and limit our lending flexibility. Defederalization would allow us to quickly lend to industries hardest hit by economic shifts. We are proud of our ability to serve Central MN with the needed access to capital and thank you for helping us make the best use of all the resources/tools we have available to serve our region."