How far we’ve come, yet how much further we need to go
This past weekend, we witnessed all across the nation, commemorations of the 155th anniversary of Juneteenth, Freedom Day for slaves in America. This was a significant marker for how far our nation has come, yet introspection and recent events make evident how much further we need to go.
A notable fact for this day – on June 24th 1950, the Group Areas Act was passed into law in S. Africa, solidifying apartheid as state policy by separating residential and business areas by race. The deplorable government system could not withstand the weight of its injustice, bringing upon it the eyes of the world, and leading to the collapse of the institutionalized system of oppression 41 years later with the end of apartheid, the end of centuries of systemic racist policies, and the toppling of the ruling regime. While S. African apartheid represents a modern-day extreme from American ideals of liberty and justice for all, we may learn from the lessons suffered by others on the long road to attaining that justice and equality.
I’d like to advise the Board of a few items of pending legislation that were posted this week – SB121, SB100 and AB78. The combined legislation may have a profound impact to broaden IBank’s ability to provide necessary financial assistance to our customers and to create new programs to assist small businesses and to address climate change.
In addition to the $50M of emergency funds that we received in April for the Disaster Relief Loan Guarantee Program, SB121 provides an additional $75M to IBank’s Small Business Finance Center. We plan for some of the funds to be used across the existing small business programs to help IBank fill gaps left by federal relief programs and to provide necessary credit support to assist the survival and rebuilding of CA’s small business community in this precarious environment.
We also plan to use the funds and additional authorities to consider new programs where IBank may partner with the private sector to raise lending capital for CDFIs and other mission-based lenders who address CA’s underserved and under-banked small business communities. The bills broaden IBank’s ability to develop new and dynamic financing programs to address dire small business needs. Once these important statutory changes are signed into law, we plan to present the Board with updated Directives and Requirements to launch the new programs.
The legislation also creates a new fund within the IBank Act, the Climate Catalyst Revolving Loan Fund. The existing Act already permits IBank to participate in various green financings through the Infrastructure Bank Fund. However, the new Catalyst Fund would broaden IBank’s mandate and ability to provide financial assistance to an array of parties and projects designed to further California’s climate goals, reduce climate risk, and implement low-carbon technologies. Catalyst intends to collaborate with the multitude of the state’s climate related grant programs and environmental and energy agencies, and will seek capital from non-state sources such as the federal government for green financing activities.
In addition, the legislation would effectively increase IBank’s ability to issue bonds to finance public development facilities. Currently, the Act limits our outstanding bonds for public development facilities to $5B and for rate reduction bonds to $10B. Without this legislation, we would have approached our public development facility cap upon the upcoming issuance of the Virgin Train USA conduit bonds. The legislation combines IBank’s issuance authority for both public development facilities and rate reduction bonds to $15B enabling IBank to continue issuing bonds for important public projects throughout the state.
We’re extremely excited about the pending legislative changes for how it enables IBank to do more and to better serve CA. At the same time, let us all try to do more to advance justice and better serve the disadvantaged in our society.