(Radio Iowa) – Iowa Congressman Zach Nunn is sponsoring legislation to update a federal program that provides capital to banks, credit unions and savings and loans that serve rural areas or low income customers. There are nine Community Development Financial Institutions in Iowa that are certified by the U.S. Treasury Department.

“For every $1 million that they receive in CDFI grant funding, they’re able to lend $20 million, so talk about a return on investment for our local community,” Nunn said during a news conference this week inside a Veridian credit union branch in Des Moines. “For every dollar invested by the feds, $20 gets to go right back into our communities.”

Nunn, a Republican from Bondurant, represents Iowa’s third congressional district. The bill he’s co-sponsoring with a Democrat from North Carolina would require the U.S. Treasury Department to disclose the reasons when financial institutions may be at risk of losing grant funding or when rules for the program change.

“What we’ve seen is that the administration has made some, like, changes that have become very convoluted, that have not been widely publicized and as a result put many of our lenders…in situations where they have to revamp their program totally,” Nunn said, “and that can delay people for months to even years with their ability to find access to it.”

Congressman Zach Nunn (R-Bondurant) speaking at news conference in Des Moines, Iowa. (RI photo)

Nunn’s calling for creation of an ombudsman’s office that would assist lenders that want to apply for the program’s grant. The bill also would forbid financial institutions accused of fraud from seeking arbitration to reduce their obligation to repay what was misspend. “We hold them accountable because at the end of the day, these are taxpayer dollars and we need to know what it’s going for,” Nunn said.

Lenders may use the program’s federal grants in a variety of ways, like investing in non-profits that are building housing as well as providing loans to businesses and individuals. The following Iowa financial institutions are Community Development Financial Institutions in Iowa: Ascentra Credit Union in Bettendorf; Dupaco Community Credit Union; Grow Iowa Foundation in Lenox; Habitat for Humanity Iowa; Mississippi Valley Neighborhood; Neighborhood Finance Corporation in Des Moines and Veridian Credit Union in Waterloo.