▸SECTION 1
Chapter 23G of the General Laws, is hereby amended by adding the following section:-
▸SECTION 50
: Establishing the CDFI loan loss guarantee program
▸SECTION 50
(a) There shall be established within the agency the Massachusetts loan loss guarantee program for community development financial institutions and other nonprofit and non-traditional lenders.
(b) The agency, in partnership with the executive office of economic development, shall establish and administer the Massachusetts Loan Loss Guarantee Program.
(c) The liabilities and obligations of the program shall not extend beyond the monies which are held by the agency and shall not constitute a debt or pledge of the faith and credit of the commonwealth or any political subdivision of the commonwealth.
(c) The program shall:
(i) Provide guarantees covering up to 80% of eligible loan losses incurred by CDFIs;
(ii) Prioritize loans that serve microbusinesses and small businesses that serve low-income communities, Gateway Cities, minority-owned businesses, worker-owned businesses, women-owned businesses, and socially or economically disadvantaged enterprises; and
(iii) Include technical assistance and training for participating CDFIs to improve risk management and lending practices.
(d) The program shall be supported through:
(i) Relevant appropriations;
(ii) fees assessed on community development financial institutions for guarantee services;
(iii) Contributions from private individuals and entities, philanthropic organizations, and federal funding opportunities;
(iv) Subventions, grants, loans, advances and contributions from any source of money, property, labor or other things of value to be held, used and applied in furtherance of this section;
(v) Income earned through equity investments, fees, interest, and other income earned by the agency and its divisions; and
(vi) unspent revenue held by the Transformative Development Fund, growth capital division, or other sources identified by the agency or the executive office of economic development.
(e) To administer the program, the agency shall:
(i) Develop criteria for loan eligibility, guarantee terms, and risk-sharing arrangements;
(ii) Monitor the financial performance of loans guaranteed under the Program; and
(ii) Submit annual reports to the General Court, detailing the Program’s impact, financial performance, and recommended improvements within 90 days of the end of the fiscal year.
(f) The agency, in collaboration with the executive office of economic development, shall convene an advisory board comprising representatives from three leaders of community development financial institutions, three leaders of other nonprofit or non-traditional lending institutions, two leaders of national banks, two leaders of state-chartered banks, two leaders of credit unions, the executive director of the Coalition for an Equitable Economy or their designee, the executive director of the Massachusetts Association of Community Development Corporations or their designee, the executive director of the Black Economic Council of Massachusetts or their designee, the executive director of The Boston Foundation or their designee, the director of the growth capital division or their designee, the director of the transformational development initiative or their designee, the commissioner of banks or their designee, and the house and senate chairs of the joint committee on financial services or their designee.
(i) The secretary of economic development shall serve as chair and the executive director of the agency shall serve as vice chair.
(ii) The advisory board may vote to appoint additional ex officio members.
(iii) Any advisory board member may appoint a designee to serve in their place.
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SECTION 1. Chapter 23G of the General Laws, is hereby amended by adding the following section:-
Section 50: Establishing the CDFI loan loss guarantee program
Section 50. (a) There shall be established within the agency the Massachusetts loan loss guarantee program for community development financial institutions and other nonprofit and non-traditional lenders.
(b) The agency, in partnership with the executive office of economic development, shall establish and administer the Massachusetts Loan Loss Guarantee Program.
(c) The liabilities and obligations of the program shall not extend beyond the monies which are held by the agency and shall not constitute a debt or pledge of the faith and credit of the commonwealth or any political subdivision of the commonwealth.
(c) The program shall:
(i) Provide guarantees covering up to 80% of eligible loan losses incurred by CDFIs;
(ii) Prioritize loans that serve microbusinesses and small businesses that serve low-income communities, Gateway Cities, minority-owned businesses, worker-owned businesses, women-owned businesses, and socially or economically disadvantaged enterprises; and
(iii) Include technical assistance and training for participating CDFIs to improve risk management and lending practices.
(d) The program shall be supported through:
(i) Relevant appropriations;
(ii) fees assessed on community development financial institutions for guarantee services;
(iii) Contributions from private individuals and entities, philanthropic organizations, and federal funding opportunities;
(iv) Subventions, grants, loans, advances and contributions from any source of money, property, labor or other things of value to be held, used and applied in furtherance of this section;
(v) Income earned through equity investments, fees, interest, and other income earned by the agency and its divisions; and
(vi) unspent revenue held by the Transformative Development Fund, growth capital division, or other sources identified by the agency or the executive office of economic development.
(e) To administer the program, the agency shall:
(i) Develop criteria for loan eligibility, guarantee terms, and risk-sharing arrangements;
(ii) Monitor the financial performance of loans guaranteed under the Program; and
(ii) Submit annual reports to the General Court, detailing the Program’s impact, financial performance, and recommended improvements within 90 days of the end of the fiscal year.
(f) The agency, in collaboration with the executive office of economic development, shall convene an advisory board comprising representatives from three leaders of community development financial institutions, three leaders of other nonprofit or non-traditional lending institutions, two leaders of national banks, two leaders of state-chartered banks, two leaders of credit unions, the executive director of the Coalition for an Equitable Economy or their designee, the executive director of the Massachusetts Association of Community Development Corporations or their designee, the executive director of the Black Economic Council of Massachusetts or their designee, the executive director of The Boston Foundation or their designee, the director of the growth capital division or their designee, the director of the transformational development initiative or their designee, the commissioner of banks or their designee, and the house and senate chairs of the joint committee on financial services or their designee.
(i) The secretary of economic development shall serve as chair and the executive director of the agency shall serve as vice chair.
(ii) The advisory board may vote to appoint additional ex officio members.
(iii) Any advisory board member may appoint a designee to serve in their place.